01. Is any collateral required to avail of the BNPL trading facility?
No additional collateral will be required as the stocks purchased through the BNPL trading facility are pledged as collateral.
02. What is the additional amount given by IIFL Securities for BNPL trades?
If your buying power is Rs 1,00,000, IIFL Securities will provide an additional amount of a maximum of Rs 4,00,000. However, leverage may vary for each stock based on IIFL’s risk management policy.
03. Can I sell the Buy Now Pay Later positions on the same day?
Yes, you can. Buy Now Pay Later positions sold on the same day will be treated as intraday transactions.
04. What will happen if I do not give the OTP confirmation till the 2nd trading day?
If you miss the given OTP confirmation till T+2 days, the purchased shares will be auto-squared-off on the T+6th day. To avoid auto-square-off in this scenario, ensure you keep sufficient funds in your account to convert the BNPL stocks into delivery.
05. How does IIFL Securities reduce my initial investment amount to purchase stock through BNPL?
Let’s say that you want to buy a share worth Rs 100. However, you do not have Rs 100 to buy the share. You can execute a BNPL transaction where you have to invest only Rs 20. IIFL Securities will multiply your initial investment amount (Rs 20) by up to 5 times, providing you with an additional Rs 80. With the additional leverage of Rs 80, you will now have Rs 100 to invest (Rs 20 + Rs 80), allowing you to buy the Rs 100 share.
What are the various factors included in the BNPL facility?
The Initial Investment Amount: The fractional amount you must pay while placing a BNPL trade. The Additional Leverage: The amount loaned by IIFL Securities over and above the initial investment amount. The Collateral: The stock purchased using the BNPL facility is pledged as collateral with the stockbroker. Margin Call: You may need to add more funds (margin) to the margin account due to increased stock volatility, decrease in stock value, removal of stock from the exchange and other such factors. IIFL Securities will inform you in case additional funds are required for a margin call.
07. What will happen if I do not add funds based on the margin call by IIFL Securities?
If you fail to add more funds, IIFL Securities will sell the equivalent value of the BNPL stock pledged as collateral.