Liquid Bees

Liquid Bees - ETF for Safe Parking of Funds - Optimize Margins

This article will talk about how to use LiquidBees as an alternative to keeping cash in your transaction portfolio - an ETF that is a place to keep cash in the short term. Let us explain this in detail.

What is LiquidBees?

It is an exchange-traded fund that makes authentic investments in the money market overnight. This gives it a higher degree of protection and a higher degree of fluidity. Security because the money market holds money for a very short period of time (overnight or very short term) and is monitored by the RBI to ensure that there is no challenge in terms of repayment or liquidity.

And you can buy and sell it like stock.

Liquid Bees - ETF for Safe Parking of Funds - Optimize Margins
Liquid Bees - Full Information


Here's how it works:

You buy LiquidBees at Rs.1000 per share. Never place a market order, always place a limit order of Rs 1000 only

It will be bought by market makers at any time - usually within an hour.

The second day after you buy the ETF now comes to your account.

Every day, LiquidBees ETF pays dividends for the amount of interest it receives so that the NAV falls behind to Rs. 1000. So, if they get 0.1% as interest from the money market, the NAV will increase from Rs. 1000 to Rs. 1001 (1% 0.1% of 1000). The NAV will have to be returned at Rs. 1000 rupees they will pay as dividend 1

Now dividends are applicable for distribution tax, so they will pay Rs 2,000. 0.0 (30%) to the government and you Rs. 0.7 as a dividend.

This dividend does not come to you - it is reinvested as a "unit".

If you have 500 units (bought at Rs. 1000 each) then Rs. 500,000 valuable liquid bees to your account. If you get 10,000 rupees. 1 as a dividend, which is post-tax Rs. 0.7, you are paid Rs. 350 as a dividend. Suppose it is reinvested at Rs 1000 per unit, so you get Rs. An additional 0.35 units to your account.

ETFs are mutual funds, so you can have fractional units. However on the exchange, you will only be able to sell the whole unit - so you have to wait until the extra units become 1 unit or more. In our example, within three days of getting 0.35 units you will get an extra unit. (Actually 1.05 units due to math, but you can only sell 1)

Now, why is this good? Because if you save cash with brokerage firms, they pay you no interest. So you can buy liquids to buy your liquid for some interest as well as a very easy way to "park" money with brokerage and also earn interest.


Some brokers like Zerodha charge zero brokerage when you buy a stock - only Rs. 15 When you sell it. With a little bit of entry, while waiting for the opportunity to place cash, you will be able to balance a large amount of LiquidBees.


You can sell liquids when you want to buy stocks and brokers usually allow you to buy on the same day, so you can buy your own stock on that day.


The risk of LiquidBees is very low just because of investing overnight. And with it you can do a lot!


What can you do with LiquidBees?

We talk about cash parking and getting interested in it when you get the opportunity to invest. Post-tax yield is low - so if you get 7% interest then post-tax yield comes to 4.9%. Still, this is better than keeping money in a savings bank account (4% pre-tax yield) and more liquid than a fixed deposit (where if you get out of the initial condition the penalty hits you and there will be 4.9% after tax) Too).


Using LiquidBees for margins

You can also use LiquidBees for margin trading. If you buy a future, you do not have to pay the full amount of the exchange. All you need to do is set the money as "margin". Now you can keep stocks as margins but stocks can form only 50% of the required margin, and the rest should be in cash.


LiquidBees is considered the equivalent of cash. If you keep your LiquidBees holding promise, they give you 90% as standard margin - which is called 10% haircut. Since it is treated as cash, you no longer need cash to set up as a margin in your account.


Why is it useful? Think about alternative trading.

If you purchase an option, you need to have cash in your account. It pays the broker. (Liquids won't help here - if you don't have cash, you can sell enough LiquidBees to pay for the option you bought)

However, if you sell options, the entire margin can be given by LiquidBees.

Suppose you have money. 100,000 (100 units) in LiquidBJ. You promise them and your broker gives you a margin of Rs 10,000. 90,000. (You pay no interest on this margin, it is only available to you)

Say you decide to sell a lot of Nifty 8000 calls and buy Nifty 8100 call calls - price Rs. 100 and Rs. 50. You will get Rs. 100 and pay Rs. 50, so you get Rs. 50 as net premium (for a 75 lot, it got a premium of Rs 3750). However, NSE will ask you for a margin, for which Rs. 30,000 per lot. This money can be supplied to 30,000 through the LiquidBees units promised above, which gives you enough coverage to play that strategy. Rs 90,000 in rupees you can get as a margin against your LiquidBees, Rs. 30,000 people are now blocked for this strategy.


At the end of the month, the Nifty is below 8050, you will have both transactions expired and your margin will be fully open again (Rs 90,000 returned). And you can maintain what you gain. (Anything below 8000 and you can have a profit of Rs 3750 and above that, your profit will be less than 8050).


If the Nifty is above 7050, you will "lose" money, which means you have to pay for this loss, but the maximum loss is ০০100 or more - 3750. On the closing day, you only need to pay this loss in cash, and you All right.


Effectively, you had one month to run the strategy when you were earning interest on LiquidBees Holdings. Say, 0.5% a month, you can earn. LiquidBees itself contains 500


Think of LiquidBees as a buffer against your potential losses.


Can you use LiquidBees in the future?

Yes, even future margins are required and you can mortgage LiquidBees for this margin.

But there is a difference: daily mark-to-market spending. If you buy the Nifty futures at 7900, your margin is Rs. 50,000 (covered by LiquidBees Promise). At the end of the day, the Nifty fell to 78600, you Rs. 100 = Rs. 7500 per a lot of Nifty (today lot size is 75).

You have to pay 7500 in exchange for this money. It must be paid in cash, not as a LiquidBees unit.

Cash can also be found in the mark-to-market if the Nifty goes up in this case! This cash simply goes and sits as a positive cash balance. This will be effective in case of loss of M2M.

Is LiquidBees better than liquid mutual funds?

Okay, you can’t pledge liquid mutual funds to get margins - so margins where LiquidBees are convenient.

However, liquid mutual funds are better for any other use. With LiquidBees you have to pay dividends and deduct taxes every day. With Liquid Mutual Fund you can keep the interest on the fund and you will not be charged this tax until you leave! If you leave within three years, the net tax may be the same, but it gives you the opportunity to take your tax liability to another year.

Also, liquid mutual funds are better than LiquidBeesif your net taxable rate is less than 30%. (Because when you sell these you will pay a lower tax slab rate than the capital gain, on the other hand LiquidBees always pays 30% tax on the daily dividend paid)

What can you do with LiquidBees?

We talk about getting interested in cash parking when you have the opportunity to invest. Post tax yield is low - so if you get %% interest then the tax yield after post will be 4.9%. Still, it's better than keeping money in a savings bank account (4% pre-tax yield) and more liquid than a fixed deposit (where if you get out of the initial condition, the penalty will hit you and be 4.9% after tax)).

Using LiquidBees for margins

You can also use LiquidBees for margin trading. If you buy a future, you do not have to pay the full amount of the exchange. All you have to do is set the amount as "margin". Now you can keep the stocks as margin but the stocks can form only 50% of the required margin, and the rest should be cash.

LiquidBees is considered the equivalent of cash. If you promise to hold your liquidbus, they give you 90% as standard margin - which is 10% haircut. Since it is treated as cash, you will no longer need cash to set up as a margin in your account.

If you purchase an option, you need to have cash in your account. It pays the broker. (Liquids won't help here - if you don't have cash, you can sell enough liquids to pay for the option you bought)

However, if you sell options, the full margin can be paid with LiquidBees.

Suppose you have money. 100,000 (100 units) in LiquidBJ. You promise them and your broker gives you a margin of Rs 10,000. 90,000. (You pay no interest on this margin, it is only available to you)

Say you decided to sell Nifty 8000 call and buy Nifty 8100 call call - price Rs. 100 and Rs. 50. You will get Rs. 100 and pay Rs. 50, so you get Rs. 50 as net premium (for 75 lots it got a premium of Rs 3750). However NSE will ask you for margin for which Rs. 30,000 per lot. This money can be provided up to 30,000 through the above promised LiquidBees units, which gives you enough coverage to play the strategy. At Rs 90,000 you can get it as a margin against your LiquidBees, Rs. 30,000 people have now been blocked for this strategy.


If, at the end of the month, the Nifty is below 8050, both your transactions will expire and your margin will be fully reopened (Rs 90,000 refund). And you can maintain what you achieve. (Anything below 8000 and your profit can be Rs 3750 and above your profit will be less than 8050).

If the Nifty is above 7050, you will "lose" money which means you have to compensate for this loss, but the maximum loss will be ০০ 1000 or more - 3750. On the closing day, you only have to pay this loss in cash, and you There is.

Effectively, you had one month to run the strategy when you were earning interest on LiquidBees Holdings. Say, 0.5% per month, you can earn. 

Can you use LiquidBees for the future?

Yes, even future margins are required and you can mortgage LiquidBees for this margin.


But there is a difference: daily mark-to-market spending. If you buy Nifty Futures at 7900, your margin is Rs. 50,000 (covered by LiquidBees Promise). At the end of the day, the Nifty fell to 78600, you Rs. 100 = Rs. 7500 per a lot of Nifty (lots size 75 today).


In return for this money, you have to pay 7500. It must be paid in cash, not as a liquid bus unit.


Cash can also be found in the mark-to-market if the Nifty goes up in this case! This cash simply goes and sits as a positive cash balance. It will be effective in case of M2M damage.


Is LiquidBees better than Liquid Mutual Fund?

Okay, you can’t keep liquid mutual fund pledges to get margins - so margins where LiquidBees are convenient.


However, liquid mutual funds are good for any other use. With LiquidBees you have to pay dividends every day and get tax deductions. Liquid Mutual Fund allows you to keep interested on the fund and you will not be charged until you leave! If you leave within three years, the net tax may be the same, but it allows you to take your tax liability for another year.


Also, if your net taxable rate is less than 30%, liquid mutual funds are better than LiquidBees. (Because when you sell these you will pay a lower tax slab rate than the capital gain, on the other hand, LiquidBees always pays 30% tax on the daily dividend paid)


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