Pledging shares for margin trading means using your existing shares as collateral to get extra money or buying power from your broker. You don’t need to sell your shares. The broker gives you funds based on the value of pledged shares, which you can use to trade more in the market. You can unpledge the shares later when the margin is not needed.
What Does Pledging Shares Mean in Trading?
Pledging shares means you give permission to your broker to use your shares as security. These shares stay in your demat account but are marked as pledged. In return, the broker gives you a margin amount that you can use for trading in stocks, derivatives, or intraday segments without selling your holdings.
How to Pledge Shares for Margin Trading?
The process is simple:
1. Log in to your broker’s trading platform.
2. Go to the “Pledge Shares” or “Margin Pledge” section.
3. Select the shares you want to pledge.
4. Submit the request. You’ll get a CDSL/NSDL approval link.
5. Authorize it using OTP sent to your registered mobile/email.
Once done, your shares are pledged and margin is added to your account for trading.
What Are the Benefits of Pledging Shares?
Pledging shares helps traders:
– Get extra margin to trade more.
– Avoid selling long-term investments.
– Use idle shares to generate profits in short-term trades.
It gives flexibility without losing ownership of your shares. Also, once trading is done, you can unpledge the shares anytime.
Are There Any Risks or Charges in Pledging?
Yes, there are a few things to remember:
– If the market value of your shares drops, your margin also reduces.
– Brokers may charge a small pledging/unpledging fee.
– If you can't maintain margin, your broker may square off your position.
So, it’s important to use pledging wisely and keep an eye on your positions.
How to Unpledge Shares After Trading?
Once you no longer need the margin or want to sell your pledged shares:
1. Go to the “Unpledge” section on your broker’s platform.
2. Select the shares to unpledge.
3. Submit the request.
After processing, the shares are released and become free for use or sale. It may take 1 working day.
Contact Angel One Support at 7748000080 or 7771000860 for mutual fund investments, demat account opening, or trading queries.
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