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
I suppose others have to do ONE BETTER to gain marketshare. Good on them. And I think if Zerodha gets complacent and lets up, others will creep up. All said and done, most people who are on Upstox and Finvasia use those as secondary accounts, Zerodha Trust still matters!
Issue with Finvasia is that they don’t accept mutual funds as collateral till today. That is the only issue I have with them. They don’t charge brokerage or interest for non-maintanance of 50:50 cash.
The whole idea is to find brokers who take mutual fund as collateral with no 50:50 rule and charge per order brokerage (no brokerage is even better). Let’s not revolve around 2,3 brokers. People who use other brokerages shall comment please.
You are correct, There is a rule which says that the BROKER has to maintain a 50:50 Ration but not by the CLIENT.
Since usually broker deposits additional funds to the exchange by way of FDs / cash that will be adjusted by them against this ratio. Some of the clients also do not pledge securities and instead deposit cash which overall gets adjusted in ration of broker exchange ratio.
Last time I checked with them and checked forum on traderji - I found that they don’t require 50:50 …they prefer but not compulsory …if u don’t have 50% cash …they will not charge interest on shortfall.
a) Do you know what the requirement is with Sharekhan? Wanted to pledge shares & use it for FnO…
b) Also, per order brokerage is important for me. What’s the brokerage these brokers usually charge for that? Back in the day, remember ICICI used to have very high charges, but now they have the cheaper neo plan which is at par with the discount brokerages…
Can you please ask them if they charge interest on 50% cash.
It is one thing that they allow you to have position …Even zerodha allows that …they are not stopping you but if you don’t have min. 50% cash …they would charge interest…not sure about Samco
