How is withdrawable balance calculated after pledging?

When you pledge securities in your demat account to trade F&O, your withdrawable balance changes based on the collateral margin blocked for your F&O positions and the cash in your account.

At least 50% of the margins blocked for F&O positions have to come in the form of cash or cash equivalent collateral. The other 50% of the margin requirement can come in the form of other non-cash equivalent collateral margins.

Example scenario

You initiate an F&O position requiring ₹1,00,000 margin. Before opening this position, you have:

1. Cash: ₹70,000
2. Collateral margin: ₹80,000 from pledged securities (after applying required haircut)
3. Cash equivalent: ₹20,000 from pledged liquidbees

Here's how the system allocates your ₹1,00,000 F&O margin:

This calculation leaves you with a withdrawable balance of ₹40,000.

Withdrawable balance formula

The system calculates your withdrawable balance using this formula:

Withdrawable balance = (Available cash balance - Proceeds from stocks sold today - F&O profits today - Funds added today)

Where:

• Unsettled credits = Today's credits in equity segment + Today's credits in the derivative segment
• Collateral utilised = Total collateral used towards margin requirements from cash and non-cash equivalents

If you don't have enough collateral margins to cover 50% of the blocked margin, the system charges the difference from your available cash balance, which further reduces your withdrawable balance.

Things to keep in mind

• Collateral margin from pledged stocks or liquid mutual funds for F&O trading does not count as part of your withdrawable balance.
• Funds you add during the day become available for trading immediately. However, you can only withdraw these funds after one day due to end-of-day balance reconciliation requirements.
• You can track securities that form part of cash and non-cash components on the approved list by visiting zerodha.com/approved-securities.