Well you are very keen to knew about pledge Are you thinking to pledge your Stocks and take Collateral Margin from broker and trade Intraday from that. So you are at a right place.
Lets Discuss Pledging
Basically Pledging is nothing but giving your stocks to broker and take money from them understand it like you want to take some Loan from bank. Banks will ask you for some collateral deposits you will give them any house papers etc etc.
Same condition is here you are taking money from the broker and asking for the margin here you will give your stocks to broker and broker will give you margin against that stock which you will pledge. For this broker will charge some charges while you pledge stocks or when you exit that pledge.
If from that margin you make losses then you had to add money in demat account and give full money back to broker this is simple how pledge works.
Benefit’s of pledging are for those who are experienced traders they can pledge and use that money for their trading.
It is HIGHLY suggested to new traders to avoid pledging your stocks because you have less knowledge and it is not beneficial for you to pledge and take margin from broker.
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