Uses of pledging in stock market
Stock market is a place we can investing
and Trading in this place. An example we have
10 lakhs. We can trade and invest using the
Same capital. That is pledging of shares is
An arrangement in which the promoters
Of a company uses their shares as collateral
to fulfill their financial requirements.pledg
ing of shares is common for companies
that have high shares owned by investors.
the borrowers of pledged shares retains
ownership of the assets and continues to
earn intrests and capital gain of those
shares
Promoters can pledge their shares to avoid
trade opportunities due to low cash margin.
they can get a loan after haircut deduction.
the collateral margin received from these
pledged shares can used for equity trading,
futures and option writing