I usually trade f&o (mostly writing) and have capital of almost 10 Lakh. Now I want to park this fund and then pledge for collateral and trade using that fund. So what are the best instruments where I can park money? Instruments needs to be debt oriented and I don’t need this money for atleast a year so liquidity is not a problem although I can let go some bps for liquidity
Option 1 : Bharat Bonds
Liquidity is good, Yield is better but can be pledged as non-cash component. being Non-cash, you can’t utilize full pledged value for overnight positions. Intraday you can use full for option selling.
Expense ratio is also vey low, if you are purchasing from secondary market, you can pledge almost immediately. If you are purcahsing directly, say from edelweiss, it may take a week for getting to demat and pledge bla bla bla…
Option 2 : G-Sec or SGBs
Liquidity is very very low, Yield depends on the script. (6.5 to 7% easily), can be pledged as cash equivqlent component so overnight/intraday can be used for full value.
Option 3 : Mutual funds/ETFs/Liquidfunds etc etc
Liquidity is very very good. yeild varies case to case.
Hope it has helped a bit.
I have parked 6L in Gsecs. as i wanted to use for over night positions also.
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Any Gsec to recommend. I also thought about Gsecs, but confused which one to invest it as there are hell lot of Gsecs and I have no idea which one is pladgeable. In which Gsecs you have invested? What about taxation in GSEC?
Refer Approved list of Securities at Zerodha. – Google Sheets
Under Cash component sheet, All pledge able G-Secs are listed.
There are G-Sec available which are going to Expiry in the year 2050+, Depends up on for how long you can wait… you can choose…
Every Tuesday RBI calls for auction of already issued G-sec. You can apply in COIN or you can directly buy from secondary market like Kite, Indiabonds, bonds india etc etc…
I have invested in 738GS2027-GS and purchased in kite at premium of 103.45. Effectively i am getting yield of almost 7%. i don’t wanted go for more than 5 years. so i choose that.
I purcahsed in kite as i dont wated to wait for 1 week for pledge.
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Almost 75% hikes are already done(as per estimates market cycles) can invest in medium,long term ,gilt mutual funds
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But have to pay tax on interest received in Gsecs, right? As I am already in highest tax bracket, that will eat a lot in interest alone. Anything more efficient tax wise so that I can have good return post tax