If you have pledged certain quantities and place a sell order for free quantities (unpledged quantities) of the same security, your collateral margin will be reduced. This happens because pledged quantities are considered for selling first, even if you intend to sell from your free holdings. However, Zerodha will debit the quantities from your free holdings at the end of the day, and your collateral margin and pledged quantities will be restored the next day.
Example scenario
- You have 200 shares of Reliance, out of which 120 are pledged for collateral margin.
- You sell 80 shares of Reliance from your free holdings.
- Your collateral margin will reduce to the extent of 80 shares, as pledged quantities are considered first when stocks are sold.
- Zerodha will debit 80 shares from your free holdings instead of your pledged holdings during the end-of-the-day process.
- Your collateral margin is restored the next day, and you won't need to place the pledge request again.