@siva rules are there , SEBI also told don’t misuse client securities , KARVY and Bima wealth are looted the client money and they give trouble to client and their own company also ,
good also there , currently there is no cash colleterial requirement in motilal oswal , if you have doubt about this just call motilal oswal customer care
i am holding 10 lakhs worth of stock and mutual fund in motilal , there is no liquid or money market funds in motilal oswal in my portfolio , i am trading option segment equivalent to 7 lakhs every month n motilal , there is no problem at all
if you have any doubt just call motilal customer care
A broker is required to keep 50% of whatever position is taken in cash. If a broker is not taking cash from you, it means they are putting their own cash or funding it. There are two ways to recover this funding cost, either charge higher brokerage or recover the cost of funding.
In our pricing model, we recover the cost of funding by charging interest. Traditional brokers charge a % brokerage, so they can recover this cost from the value of your trade. There is no way around this. You either pay flat brokerage and funding cost, or you pay % or per lot brokerage and no funding cost.
I personally dont trust MOSF. They have some very public and scary fraud ‘allegations’ levelled. This one I noticed early on. Like they pick on individual accounts.
It had a big impact on me. Every time I see or hear their name, a quiet shiver runs down my spine.
Brokers are largely dishonest, black sheep of society, very little humanity, most don’t have the fear of God(or the law) you could say. But mosf spook me more than others somehow.
Given that multiple audits of brokers are done by various exchanges, why aren’t these brokers penalized by the exchanges for such practices? Is it due to their smaller client size, they are given some leeway?
Do you mean to say that you charge interest on shortcoming of cash limit during billing? Do you mean if I trade for 1,00,000 and I have 30,000 in cash and enough collateral in non-cash segment; you charge interest on 20,000? If so, what is the interest rate you charge?
I understand that there is a need to have 50% cash for all the trades done from a broker. Some brokers say this cash limit is not per client. So they say cumulatively they can manage with cash from other clients.
Zebu charges per lot and not per order. The platform of Zerodha is better than Zebu. The customer support is good in Zebu. Zebu provides NEST trading terminal for trading.
Zebu doesn’t allow buying direct mutual funds. Zerodha coin is a very good platform for buying mutual funds. But there are ways to buy mutual funds in any demat account (like using MFU platform).
In summary, if you trade less number of lots per order and need convinience, choose Zerodha over Zebu. If you are an high networth individual wanting to deploy all of your money into mutual funds, pledge them and get margin for trading in large quantities, choose Zebu over Zerodha.
Zerodha users also have free cash lying in their accounts on which they get 0% interest. Don’t you use that free float as well free of cost but charge 18% pa to other users who have less than 50% cash for their margin trades?
So you earn 18% pa free of cost without even putting you own capital. And in previous posts you yourself have admitted that zerodha does earn money on the free float and this contributes a good chunk around 15-25% to your business income.
Its not that I am saying that you are doing anything wrong, but just wanted to share a more comprehensive picture.
That was earlier but currently other client funds can’t be used to fund shortage for different client.
Broker only will fund shortage with his own funds and charge interest or collect it from charging high brokerage.
The link you provided Requirement for 50:50 Cash & Collateral points to Effective deposits in https://www1.nseindia.com/products/content/derivatives/equities/margins.htm which talks about CM’s requirement with the exchange of 50:50 rule but not about client’s 50:50 rule with a broker. So, I think Zerodha can also remove this client’s 50:50 requirement (which doesn’t exist) like Motilal because it is a very good feature of Motilal as mentioned by others. Otherwise, why would Motilal break rules?
Yes to my understanding 50:50 cash to collateral is required at CM (clearing member level) not at broker or client level. To understanding steps in the ladder are 1. Client 2. broker 3. clearing member 4. clearing corporation (which is part of NSE) 5. NSE itself 6. SEBI 7. Finance ministry 8. Govt of India
To my latest knowledge, Finvasia, Motilal Oswal and Samco allow you to use full collateral margin without cash requirement. Like Siva or Nithin said - with Motilal there might be additional brokerage cost compared to Zerodha but Finvasia is free and for Samco they charge interest on 50% cash margin they provide to clients. @TradeB2B@Vij
Thanks for the information. Do you also know how Finvasia manages to give 100 % non-cash component to clients? Motilal Oswal provides by charging extra brokerage charge as you mentioned and Samco and Zerodha do it by charging interest. How is Finvasia providing without charging anything? I am sure it is not paying from its own pocket?
I also believe - its not paying from its own pocket. But at the moment I don’t know how it works. I will find out soon because I am highly curious. One thing I do know – Finvasia itself is a clearing member and I am sure NSE mandates 50:50 ratio at clearing member level not at broker level.
Another thing I also know that cash component does not mean CASH only …it includes, bank guarantee, fixed deposit receipts, T-bills and dated government securities. So I am guessing Finvasia or any clearing member(I think Zerodha is also a clearing member) have to keep some FD or Bank guarantee with clearing corporation as deposit any way, so they don’t need to pay out of their own pocket. @TradeB2B@Vij@rupeshmandal@Prayag
