How does the pledging work?
When the holdings are pledged, it remains in the demat account but are marked as pledged/collateral holdings. A margin is credited to Bigul’s trading account based on the value and category of the pledged security. The margin can be used for intraday, delivery, or derivatives trading.
While providing the margin towards the pledged/collateral holdings, Exchange will deduct certain percentage which is called as Haircut, for the price fluctuation of the holdings and allow the remaining amount as trading limit for customer.