Margin pledge mechanics on Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

The margin pledge framework, introduced by SEBI through its September 2020 circular, fundamentally changed how retail and institutional clients use securities as collateral for futures and options (F&O) trading in India. On Zerodha, margin pledging allows a client to pledge eligible equity holdings held in their demat account as collateral margin, reducing or eliminating the need to transfer cash to meet F&O margin requirements.

Before the 2020 framework, brokers commonly handled securities-as-margin by transferring client shares to pool accounts or directly to the clearing corporation. The new pledge mechanism keeps securities in the client’s demat account while creating a formal charge over them through the CDSL or NSDL depository infrastructure. This distinction protects client ownership rights and reduces systemic risk arising from broker commingling of client assets.

MTF on Zerodha

Mon, 11 May 2026 00:00:00 +0000

The Margin Trading Facility (MTF) on Zerodha allows investors to buy equity shares in the cash segment using leverage, meaning the investor contributes a portion of the trade value (the margin) and borrows the remainder from Zerodha. Unlike intraday MIS positions that must be squared off by the end of the trading session, MTF positions can be held for multiple days, weeks, or months while interest accrues on the funded amount. MTF is governed by SEBI’s Margin Trading Facility Guidelines and is available on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Margin Pledge on WebNotes

Margin pledge mechanics on Zerodha

Overview

MTF on Zerodha