Leverage Vs SEBI Vs Broker

Hai , as broker always try to reduced leverage , zerodha is providing as low leverage in the industry now every one knows . when come to stock market everybody hands are shrinking about providing leverage , because they are believing loss in leverage will be affect to clients and broker also,

Sebi is always thinking every day about leverage and safety of broker bla bla bla ,…

But where the highly leverage is playing let government and people want to knows , in india most of the leverage are playing in different ways let whatever i know i will share here , rest others can comment

Leverage is part of life and any business…

  1. For buying a car we take a loan, that is a leverage
  2. For building a house we take a loan, that is a leverage
  3. For starting new business we take a loan, that is a leverage
  4. For business expansion we take a loan, that is a leverage
  5. Using credit cards is a form of taking leverage
  6. and many many more…

This all are leverage product , but in stock market if one retail client is taking leverage . all broker and sebi will tell No no no no

without leverage there is no business will run , then why stock market was shouting a leverage in high volume ,

if one guy take a loan of 50 lakhs @ interest 8.5% his principle and interest will come around 1crores , actually the borrower will loss of 50+Lakhs in the form of interest, his life is lost just paying in interest , first reduced those leverage then sebi can consider leveraging in stock market ,
providing leverage in stock market is safer than any other leveraging above , @siva tell me your opinion ,
Zerodha can consider leveraging policy in future i believe


What should we consider about?

Loans are provided to clients who need them. Lender will evaluate the borrowers capacity of repaying after he satisfied only he will give Loan.

Borrowers take a loan for their beneficial (false luxury like house, car or vacation, or Business)

In stock market there is no evaluation of client that he use leverage only for beneficial.

Lot of people who trades did not have knowledge and lose money and to satisfy their ego they say “Stock market trading is gambling”.

In my opinion SEBI must create a system based on the knowledge of client which gives the benefit to client and cap the leverage to some level. By this they can protect the people who trades with out knowledge and will give benefit to the people who knows what they are doing.


I strongly feel that it is person responsibility. Lets not ask SEBi and Govt to interfere in day to day activities. There are fools who borrow money outside the in person for high interest, So should we ask SEBI to do background checks. When a person is not responsible, he will either lose money here or elsewhere.

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I am saying to interfere because SEBI choosing easy task for them to protect innocent people.

They are simply reducing leverage and saying innocent people will not hurt much now.

But due to reduced leverage the person who know what he is doing ( doing trading as a business ) get hurt.

That’s why I am said like that.

exactly! if people want to gamble or take unlimilted risk they will do it anyway, whether be it in market or in lottery.

but this should not be primary reason to limit the ablility to restrict trader whos doing it honestly and as a business. i think this is @Riyas_Ahamed is proposing.

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Leverage in most of the other business / activities is given with a collateral attached to it , which is not necessarily the case in stock market (especially the intraday leverages). Also a proper background check happens in any other kind of loan as @Vamsi pointed out earlier.

Just like what many developed capital marekts do, F&O leverage should nt be provided by default to each an every account whicih is opened. It should have some criteria attached to it (Well, this wont be a popular opinion, but probably the right thing to do)

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