A broker firm is the one that facilitates security trading between the sellers and the buyers. A stock broker is liable for doing the requisite research and ensuring that proper recommendation is provided to his/her client. When people were still skeptical of stock markets, the brokerage firms charged high premiums for offering recommendations. The myth has now been broken with the entry of many discount broker firms, the pioneer of which was Zerodha.
From the time of inception in 2009, Zerodha has been one of the leading firms for discount brokers in India. In fact they were the first such firm to be opened in the country. Apart from offering low cost brokerage services, the team at Zerodha also strives to implement and initiate technological improvements which have gained them a favorable reputation in the market. Their transparent processing and pricing has also gained them the name of being a reliable broker firm in the market.
With headquarters in Bengaluru, the company has presence in many major cities of the country and has been continually expanding. The firm was the first of its kind to introduce online assistance. Zerodha currently offers three type of trading software namely,
- Desktop based trading: It was in the year 2015, when the clients of Zerodha were first introduced to the awesome platform called ‘Pi’. This is a desktop based application and is advanced software for charting. It is absolutely free of cost to all the clients of Zerodha and has different chart types, more than 70 indicators, option to create strategies or view inbuilt strategies, trading from the chart and much more.
- Trading on browser: NEST is the option for those who want to use a trading application from their online browsers. Of course, even KITE, the mobile app can be used through the browser. The integration between the platforms is done so seamlessly that you will never see any blip between the website and your mobile app.
- Mobile trading / mobile based trading: Referred to as the KITE, the app has definitely given wings to those who want to trade in stock market. This can be downloaded like any other app from your play store (Google or Apple). You can either use it on your mobile or through your browser on the system. Slightly different from other trading applications, it is immensely helpful once you understand the basics.
How does the pricing work?
The structure for pricing is quite simple with Zerodha that even the amateurs can easily make sense of. As for equity delivery, they offer free trades and charge approximately Rs.20 for every intraday equity trade, trading in commodities and for F&O. Their website features a brokerage calculator which you can use to calculate the charges applicable for your trade. This is yet another innovative concept introduced by the company in the country.
Given that there are no charges with free equity trading, quite a few beginners drift towards Zerodha for their initial stock market entry. And the pricing on other trading is also reasonable attracting even the seasoned and experienced traders. Whether you trade on your mobile or you are an amateur or you are a veteran, you will find that the pricing with Zerodha doesn’t bite into your budget.
What is the margin you can get on trading?
20X is the margin for F&O stocks and 2X for others when you trade on intraday equity with Zerodha. The intraday futures, shorting options also derive the same 2X margin along with the trading in commodities. For cover orders, bracket and MIS intraday, they offer a margin of 1X.
The margins are provided only for the intraday trades and not for overnight placements or equity delivery. This is the same practice followed by other discount brokers in the country as well. The news is that they are working on introducing margin funding in the near future.
The margin calculator that they offer can easily give you a glimpse on what is the margin you will derive for each of your intraday tradings.
Other platforms from Zerodha
Known for their innovation in technology, Zerodha have been constantly introducing new platforms to enable easy trading and analytics for its customers.
- Quant is one of their most successful and best platforms so far. The tool works as your personal tool for analyzing your trading so that you can get a snapshot view on your successful and bad trades in a day or over a particular period.
- Coin is their platform for mutual funds where you can invest in various mutual funds and enjoy a commission free investment. You can perform analysis of your historical transactions, compare various funds or start a SIP (Systematic Investment Plan) and more using this platform. There are also options to have a Flexible SIP where you can stop the SIP in between and continue later.
What Zerodha can do better?
Being a leading discount broker firm in India, they do not have many shortcomings. The kind of benefits and cost efficiency they offer has always been appreciated. However there are a few things that can be done better to improve their performance more.
- No margin funding option currently available. However, the talk of the town is that they are working on it already.
- The back office system of the company is not quite efficient and is constantly crashing as per customer complaints. Again the CEO of Zerodha has already started an initiative to have it replaced/upgraded.
- In case of IPO, one cannot apply through Zerodha but has to visit the bank or through ASBA only.
There is no doubt that Zerodha is the leading discount broker firm in the country and they are certainly a step ahead of their competition in terms of innovation. With well designed innovative platform, learning initiatives to spread investor awareness and user friendly tools have gained them the top spot. The few downsides are also being worked on and once that are taken care of, there will be no competition for Zerodha in any channel.