What Is Stock Pledging?

What Is Stock Pledging?

Stock pledging is securing a loan by lending your shares to a broker, while retaining ownership, based on their market value.

How Does Pledging Work?

Pledging shares involves offering them as collateral for a loan, usually 50-70% of their value, without selling but restricting their sale.

How To Pledge Shares?

To pledge shares with Alice Blue: Log in, navigate to "Portfolio" → "Holding" → "Pledge," select shares, enter quantity, and submit. Fee: 15 + GST per scrip.

Haircut In Stock Market

A 'haircut' in finance is the difference between an asset's market value and the loan amount, reflecting collateral risk.

Features Of Pledging Shares

Pledging shares involves using them as collateral for a loan, facing margin calls if value drops, while retaining ownership and benefits.