Delay Payment Interest Charge

Hello @nithin ,

Delayed Payment Interest Charge is something which is related to positional trading. SEBI has directed broker to keep 50% margin 50% cash to exchange. This is for client’s fund safety, avoiding overtrading and reduce leverage.

But I see like other broker Zerodha also pass this to client instead of restricting client to maintain exact 50-50 ratio for their positional trade. I can understand it’s broker internal decision & if any client fail to maintain 50-50 ratio broker place the margin to exchange on behalf of client and charge a fee (Delay Payment Charges) to client.

My question is here, why DPC (Delay Payment Charges) is put on weekend or non trading days.
For ex - Saturday, Sunday also there are fund deduction in my ledger.

Can you please share your thoughts here or I am missing some concepts here?

Thank you in anticipation.

Regards,
Anirban Chatterjee

Hmmm… No. The cash gets used from our prop book if you don’t have the cash.

Selectively, for clients who want and don’t want to use it, it is tough to offer this feature.

@MohammedFaisal @Prayag, maybe something that can be attempted now in Veto?

You borrow money; you have to pay interest every day, right? Same here.

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Hi @nithin,

Completely agree with you on your Reply 1 and Reply 2.

But for Reply 3 , my point is -

  1. Are broker maintaining this 50-50 ratio to exchange on holidays or weekends? If yes, then it’s perfectly okay to pass the cost to client. If NO, then may be you can have a look in this or may be one step ahead have a discussion with exchange/regulator. Your justification is right - that client had borrowed but client has no option to use it or get benefit from it. It has 0 usability for client if it is a non-trading day.

  2. Also the charge is 0.05% which is 18.25% per year.
    I know many trader don’t bother about it either due to less awareness or due to “No Paper Work” & get easy loan model, but in Future when more retail will be in Option Trading & for obvious reason they will eventually understand the “Positional Trading” is ultimate (Actual Hedging) then they might start thinking about it.
    (Point 2 is just a feedback from my end)

Of course, on holidays and weekends. As long as you hold the positions, weekdays or weekends don’t matter.

If exchange is blocking broker’s money on weekend then this is something regulator needs to be looked upon.

If SEBI is working towards T+2 to T+1 and then Same day settlement for maximum utilization of client money, then may be in near future they must have to look into this.

This cost/charges are huge hit of ROI for any trader. Stating 89% loss making trader is not enough while creating an environment which goes mostly against retail trader. If trading has to be full time profession in large scale, then below stuff must have to taken in account for regulator. Now the penetration in stock market is low, but once it’s reach saturation, may be then they will think about it. Till then we have to take the hit.

Thank You @nithin for your input and quick reply. Wish you & your family good health ahead.

No, this doesn’t need any regulation change. This is like a working capital loan; you can’t say I am not using it on a holiday. :slight_smile:

T+1 or whatever won’t change life.

This 50: 50 is something you can maintain anytime and not pay an interest.

:+1:

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Dear @nithin ,

Can we have the one liner logic statement here in DPC table. It will be helpful to user for quick access, understand how the figure is coming & make them aware and disciplined.

The logic is known to me via support ticket but for quick access it can be better to be placed here, as per my view.

Hope you will agree on the same.


Regards,
Anirban

@TheGouda @Ruchi_Porwal + +

Thanks for the feedback @Anirban_Chatterje. We’ll add it.

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