BO/CO have less leverage than MIS?


#1

Can anyone please explain why BO/CO has less leverage than MIS?


#2

Yes. Only zerodha has this problem.
Upstox gives 20x for cash segment co/bo while zerodha gives only 15x
Every time it gives reason for volatility or sebi restrictions.


#3

If something has been recommended by SEBI , does it apply only to Zerodha ? I thought it applies to all the brokers.


#4

Today I checked it was giving only 8x for tatasteel.


#5

You can expect BO/CO to be lesser leveraged than CNC/NRML in the coming days as the Zerodha systems are in Beta mode and they don’t want you to lose money.
They generally care.


#6

Yes I can see their care and affection for us. Sometimes it cares little beyond than necessary, specially on days like yesterday when orders don’t go through. Anyways thanks.


#7

for which stock/contract is this?


#8

This is for all the stocks with MIS margin greater than 10x. How does that makes sense even from risk point of view ? Giving less margin in BO compared to MIS. @nithin Please help if possible.


#9

Yeah Shit happens sometimes but Zerodha still better than all the rest out there and better too in terms of pricing.


#10

I agree. However, I am not able to understand that if I am getting 13.2x leverage in MIS, why is that Zerodha is offering only 8x in BO/CO for the same stock(Tatasteel). I am neither complaining about the services of zerodha nor am I comparing it to its competitors. That is not my job. Here if you say that zerodha cares about us and hence it has taken such a step then that is beyond any logical explanation as MIS is already providing 13x.

I just asked about it that’s all. As far as the services are concerned(which you mentioned), it is subjective and debatable and there is no point of wasting our time in such things which doesn’t bear any fruit. :slight_smile:


#11

I agree. However, I am not able to understand that if I am getting 13.2x leverage in MIS, why is that Zerodha is offering only 8x in BO/CO for the same stock(Tatasteel). I am neither complaining about the services of zerodha nor am I comparing it to its competitors. That is not my job. Here if you say that zerodha cares about us and hence it has taken such a step then that is beyond any logical explanation as MIS is already providing 13x.

I just asked about it that’s all. As far as the services are concerned(which you mentioned), it is subjective and debatable and there is no point of wasting our time in such things which doesn’t bear any fruit. :slight_smile:


#12

@nithin @Bhuvanesh @siva


#13

The issue with BO/CO is that on some stocks, a single order can traded in many smaller trades. Each trade will have its own set of target and SL. This adds incredible amounts of load on our systems. So on some of these stocks we might have reduced the leverages. @siva can you check on these anyways.


#14

Will update here tomorrow.


#15

@nithin that’s the case only with BO. Why CO is affected if that’s the only reason to reduce the margin?

I understand other issue with BO that both SL and target could be executed in volatility days. But that’s not case with CO as we have only SL trigger in CO.

When it comes to reduce margin, you treat both BO and CO as same.
I had raised this issue mutliple times in past(where MIS has more leverage than CO). Could you please personally look into this issue. I think we are doing something wrong here


#16

Will let you know tomorrow but the rules we set are different to mis and bo/co, will give you exact rational for the difference tomorrow.


#17

@siva


#18

Can you check today and let me know if still you are getting more leverage for MIS than BO/CO.


#19

I couldn’t find issue today


#20

Ya, it is sorted on calculator, anyhow on terminal it is always correct. Thanks for pointing out.