Currently in internal testing. Hopefully, it will soon be in beta for everyone.
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Even the ad revenue is an issue, isn’t it? If being loud is what gives you an audience and views and hence ads, everyone has an incentive to be as loud as they can.
By the way, educational content is alright I think, as long as it doesn’t get into the business of advisory or the bit where it is about, “Here is how much money I made and how quickly”.
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Dear @nitin
What is the way out if someone is trading F&o and earning 100% through trading via corporate structure(only family members as directors) but not providing any tips/services. Also not collecting any money from anyone.
What would be the best way to regularise the non compliance made inadvertently.
If you can guide it would be of great help
So, firstly I think the way I look at trading is that it isn’t just trading stocks; it is about trading your time to do what can give you the best risk-reward return. So it is about figuring out your strengths and then doing whatever you are best at. So while I stopped trading stocks when we started Zerodha, I consider Zerodha as the biggest trade of my life. Nikhil, on the other hand, was a much better trader of stocks than I was, hence he continued with it and is maybe one of the best traders I know of.
So yeah, I think everyone should try actively trading the markets as it is the best way to learn about finance and your behaviour under fear and greed. But the most important aspect of trading stocks or trading time is to know when to stop trading. Define a money and time stop.
Coming back to your question, I had written this sometime back.
And this is a post from 10 years ago.
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Hey, not really. Too many regulatory changes are happening, and we go in every day thinking our revenue can drop by 50% due to one regulatory change. If I had to take a bet, I’d say the pricing in the industry over the next few years will go up and not down.
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If you are large enough, setting up Cat 3, AIF, is the best structure for this.
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Sir, i am also in this broking industry and i have a very important question as a part of the otherside as an intermediary that most of our brokerage comes when clients trade a lot and according to data 99% traders loose money. Some of them are financially weak and convinced by fake youtubers showig high pnl and telegram calls or relationship managers and loose their parents hard earned money which is really really a big issue in seen in youth due to youtubers.
So don’t you feel that brokerage you earned from their losses which they can’t afford is a bad profession for us? Like being a owner of casino ?
I have been thinking about this quite a bit and for a long time. As a platform, we have tried hard to educate and also set the right expectations. For many years we have been telling how few people make money in the markets and how the only easy bit about trading is opening a trading account. This is also why we launched Verified P&L and actively supporting what SEBI is trying with their new consultation paper. And as I mentioned, we can’t be the only broker taking a stance and be at the risk of all these influencers jumping on us. Whatever changes have to happen, has to come through a regulatory framework.
By the way, if you think about this deeply, this issue isn’t just in broking, but everywhere. A food app would want you to order as much junk as possible, which can affect your physical health; a telecom player will want you to consume as much data as possible to junk on things that can affect your mental health; an e-commerce player will want to lend you money to buy things that you don’t need and put you in a bad financial spot, and more. While in trading, the result could be a direct loss in money, it could be indirectly in all the other cases.
I think all business owners need to think of these issues. We do, and all the initiatives that we have been working on over the last few years and the future are things that can slow the customer down. Be it the nudges we have launched and the many pending nudges to be launched, the kill switch, the equity curve we will launch soon, and more.
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Dear nitin.
Really appricate your response…our corporate account is with zerodha only.
I ll find out details about AIF cat 3. I myself is CA currently in job and learning about markets as a side hustle.Our size is small now…We have been able to make profit upwards of 1 cr every 6 months based on past history. In this case is it advisable to go forward AIF 3 with this size.
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All arguments in favor of affiliates sound hollow, especially the rural coverage. Do you really want the poorest strata to be doing Options or for that matter penny stocks? Any non SEBI auth person has no business advising anyone about investment…and acceptance of this fact by brokers and fininfluencers is long overdue.
Zerodha should not be creating circumstances for scamsters to flourish and try to hide behind semantics.
Do the right thing, pave the way for safeguarding your customers by removing affiliates that are non SEBI IAs or RAs - in my view both.
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@nithin really appreciate the time and effort you have taken to communicate with us all on these questions thank you so much really appreciate it … also I think you should have some dedicated podcast on this from your end as we can relate so much with small small things you have spoken about …given the new challenges we are facing currently when it comes to day trading would love to hear more from you on this 
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I’m sorry but your post is shallow.
You can’t just undo something if there is no regulatory framework.
Why do poorest of the strata always become an example to make an argument? So you should stop alcohol/smoking for them because they cant foot hospital bills.
They should not attempt to be self-employed because their risk of ruin is high?
As it is, a poor guy wont get a loan because of “net worth”…
Everytime someone wants to eat fatty foods, they should carry BMI certificate like a vehicle PUC?
You should propose or focus on creative thinking, as it is, verified pnl etc has been introduced and more measures/features to help identify frauds.
Brokers do meet and consult with SEBI, so obviously behind the scenes another angle of proactive steps would be discussed.
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I’m sure this post will get deleted but I’d bluntly say, i would have been super happy if 10 years ago you foresaw this problem and prevented it from happening with your great insights from the post.
You would have explained how xyz would’ve been absued and only SEBI auth should get referalls and ppl will edit screenshots etc.
Then we’d never have had any problems.
F&O income is classified as business income and not trading/speculative for taxation purpose. If that’s the case, why is it considered as financial income? Moreover underwriting options is more like running an insurance business with all the settlement obligations taken care by Clearing member unlike the insurance business. Even insurance companies don’t require NBFC registration with RBI. If so, I don’t think NBFC licence is required. RBI 50-50 rule is not applicable here. Please correct me if you think I’m wrong.
Don’t you see a concern since many brokers started to offer fixed packages for intraday/ under 30 age?
Just curious, what will be your approach for JioFinancials if they enter this field?
Hello Nithin,
My question i have been a customer since 2014-2015, Zerodha had Initially grown trough referrals or still is, but Zerodha had stopped referral for a bit in between and when you guys started it again all the old referrals where gone, Why has this happened??
Is it counter intuitive to stop and start the same thing again, and if the reset was done why the old referral where removed?
This is a good update Nitin. The fundamental problem is that everything is addressed as a knee jerk reaction. It’s a person’s freewill on what they choose to believe or not believe.
@nitin. Yes we understand that there are many people who are making a living by this zerodha referal and they help in getting new customers.
But Finfluencers are exploiting that features, and even trading with a fraction of that money is a huge amount to lure retailers into the trap. And it’s only a handful of people doing this.
So, What if this amount is capped to a limit , so that the luring of the customers is limited and doesn’t affect the marketing people who actually work hard to bring in customers.
Like you can cap it to Number of accounts under a person or PAN or you can limit on the amount generated on a monthly basis.
Kind of a win win for both.
This is the only clean regulatory way of doing this.
While option trading is what contributes 80% of exchange volumes, over 80% of the people who trade the markets actively don’t do options trading. Last year ~40lks people traded options, the remaining 2crore+ did equity trading. Affiliate, referral, authorized person, and partner programs help broaden the overall market.
That said, I do get what you are saying and like I explained, there has to be a regulatory framework that enforces everyone to follow the same rule. In my guess, it is coming very soon.
Adding the other comments to the same post as my answer is similar.
All the craziness has been in the last couple of years, especially since Covid. And this was when every broker out there was giving out affiliate links. But if I could go back in time and undo this, given the knowledge I have today of what it turned into, we would have never launched affiliate links. By the way, I am sure, that if we hadn’t launched this, someone else would have as affiliate links are popular across different industries.
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