I think this is an honest and good enough reason to say NO, and you have my respect for that. But you should probably stop there. We don’t expect you to run a charity and leave money on the table. However at some level, both you and @nithin know that it’s not a good enough reason given the perception zerodha has created for itself (deservingly so), hence the urge to come up with another reason to compensate by saying this
And I think bs like this coming from someone I admire so much (Nithin) is irritating. Another bs is Nithin saying:
While the effort can be the same, I assume that the exposure that zerodha takes with fno trades will be directly proportional to the volumes (blackswan events for brokers that Nithin keeps talking about while defending the brokerage fee).
And finally, this line:
or the other variation, “I know this sounds counterintuitive but…”. I feel it’s nice to use it once (I liked it when I first heard Nithin speaking it in some interview), but with everything you do if you start pretending it to be originating from the most altruistic motives, people just see through that.
PS - still a fan of everything you guys do like many others, so no need to be a hypocrite while answering difficult questions; is all I wanted to say.
The conversation about what the business thinks regarding fixed brokerage plans not being viable business wise was fairly clear.
We honestly believe that overtrading is a risky thing to do for a trader (I’ve been a trader myself for good part of 7 years and can vouch for it) and we say this everywhere on a regular basis not just for the sake of saying it - be it on TQnA, twitter, Z-connect or even during interviews and it is not definitely some rhetoric that we try to preach others - We are trying to back it up with our products like nudges, kill-switch, virtual contract note and many other initiatives like Varsity modules like Innerworth.
Will some traders look to move away looking at lower pricing? Definitely possible but our focus as a business will be to try our best to help our clients do better with their money (trading or investing) while improving the overall product and make it the best experience for them.
While black swan event related risk factors are one key thing:
There are also other factors like the efforts that vary in let’s say the backend operations of the business for someone who takes 10 trades per month and 500 per month.
But, you are right and what you said makes sense if we look at the whole point from a client’s perspective in general.
This is quite incorrect as far as people who have edges are concerned. If my edge per trade remains same, then taking more trades (with lower risk per trade ) is much better - to a point. Diversification works, even when there is a lot of correlation.
I have taken thousand+ trades every year in last 3-4 years and that works well for me in stocks. There is a balance to achieve between edge per trade and edge resilience. Too few trades and your calmer gets worse. Too many trades with lower edge and you become vulnerable if markets get tougher and your margin vanishes.
So what is over trading is for trader to figure out for his system. Just taking many trades is not over trading and can definitely be LESS risky.
Probably this is correct for a trader who has no emotional control and trades without edge, but its hard to argue that lower brokerage will be a deciding factor when STT is so high.
I pay a lot in brokerage and a lot more in STT. Maybe its different for option guys and esp low capital guys as your brokerage for small orders is very high and basically impractical for many day traders ( i can also understand why as many orders with low qty might stress test your infra).
Anyway, not saying anything about fixed brokerage plans, just saying that its not that simple wrt overtrading.
I am quite happy with Z - very very stable. Hard to see me moving to any other broker any time soon, but definitely will want a secondary broker if anyone comes close to Z for my use case.
You guys are having a major conversation here. I like to chime in with my request to start showing charges and taxes by trades / orders. You guys show a cumulative charge by EOD. That’s not acceptable. As a trader , I don’t know how much I got charged where and when.
This is concerning when you don’t have fixed brokerage plan for trading.
This is not equivalent. Virtual contract note work only in same day. What if I wanted check a past day.
Nithin sir said , you guys will bring trade wise charges details in console ( reports page ) . Is this the one ? Its better not
The kite holdings page doesn’t account for pledged shares. This is the reason I stopped pledging shares. Please don’t tell me “pledged shares are in different account, so you have to see backend console”. You can still pull data from 2 places and show consolidated view, I don’t see it being a burden.
In console, the “Total account value” and “Account value curve” shown always lag by 2 to 3 days, and they differ sometimes.
Yeah I agree that its not possible to maintain 100% sync, but the reason behind me asking was I missed out on couple of days when my clock on the system was offset by more than a second. I thought if this time was coming from terminal itself, the error would be ideally limited to a margin in the order few ms.
Please think about it with your tech team
Okay, probably you can consider implementing it if you see more people requesting the same. I see some of the other brokers in the industry are providing this information. At the end of the day if the required information is available at a single place, then it makes it easier for the users
Thanks from my side for replying and considering the other 3 points for future enhancements
Kite is their terminal, which means only those which are allowed to buy and sell are shown. Just recently they have enabled instant sell for pledged securities. As per the earlier design it made sense to not show pledged holdings as the users might try to sell pledged holdings
Yeah that’s really annoying. I assume they are running separate batch processes for their backend. Especially on the weekends its mostly broken
It would be really nice if they run the backend process everyday at a fixed time (incl generation of contract notes, ledger entry, updating the console account value, holdings value etc)
After reading through the team’s replies, I see they are having a ton of things to work on no wonder there is a large delay in feature requests. Before they could start something new, some other thing comes up
Backbone of Tech industry. That’s why we enjoy frequently updates and competitions. Zerodha is industry leader. But soon they have to impliment ground breaking setups. This is not 2018. 'Don’t touch what’s not broken ’ may not work all the time.
I keep hearing the revenue and growth will go down during bear market. I don’t find the reason why?
FNO traders shouldn’t be worried about the market trends right?
Be it bullish or bearish, intraday is all it matters. Can you throw some more light?
As you’d guess, F&O trading, or active trading in general, is a high-mortality business. As mentioned earlier, less than 1% make more than bank FD returns in the long run.
Many customers decide to trade risky products with leverage with the wrong expectations that money can be earned easily and quickly. This problem has been accentuated by many claiming to generate large amounts of trading profits on social media. We have used every opportunity to create awareness that in the long run (3-year period), less than 1% of those who actively trade equity futures and options generate returns higher than bank fixed deposits or 7% annually. We will start sharing more granular information in the next few weeks. Generating profits from active trading is as hard as generating profits while running a business, if not harder, given that anyone can start trading and not everyone can start a business. The odds of succeeding when actively trading are very low, similar to any other walk of life, which requires skill, hard work, and some luck to succeed. From running a business to playing sports or music for a living.
So what this means is that the majority of people who trade actively stop trading in 6 to 12 months. So unless new traders join the fold, the industry’s overall trading volumes and revenues can drop significantly. In bull markets, the number of new account openings is much higher, which leads to many of those opening accounts also trying out active trading. The account openings drop in bear markets, so the new traders joining also drop significantly. This is how it has played out historically, not just in India but across different exchanges and markets.
We have not had a good bear market so far. Normally brokers lose business in bear markets because most retail traders are long only. That is why their performance is on the higher side during bull runs.
Even though FnO gives option to play on the short side - mostly individual traders dont play. Also most of them would have ample EQ holdings - so when the portfolio value drops, their mindset to deploy trades will get impacted.
As @nithin said - bear markets will drive down the total trader’s count, but the profitability may not be impacted as high volume traders will still persist.
About MTF, you guys are not being fully honest. Not offering MTF may be your policy choice or necessity , but packaging it in altruistic design is something wrong.
MTF can have many other uses. E.g. - this SEBI 80:20 ratio rule can be overcome using MTF.
20% we can buy using MTF. Then next day we can shift that to CNC. Without MTF, we have to wait for next day and overnight risk is not something traders are willing to take.
Every trader needs to rebalance portfolio. Smallcase always needs rebalancing.
For futures/options we need to shell out cash for margin(for 50% cash portion) even when we have large stock portfolio for collateral. Margin funding can overcome that necessity.
Basically, we can use MTF funding, where we need to bring buffer money or margin money.
We’re planning to extend the new curve to Verified P&L. However, doing it for the Family portfolio level brings different complications as day one tends to be different for everyone, and we’ll have to normalise the curve across accounts at different timeframes. We’ll try to revisit this after the launch.
This is in our todo.
Non-MF updates have always been T-1 since we run the daily process and update the Console reports once a day. The mutual fund NAV displayed on the Console reflects the T-2 day value because the NAV announcement timings vary depending on the type of scheme. More details here. We’re making a few updates in the back end which caused an issue of holdings value missing from the curve, we’re fixing it.
One problem I always face when I need to see ledger is that there is no way to categorise it.
There are various kind of entries -
DP charges,
derivative margins,
Fund addition,
fund withdrawal,
equity settlement,
derivative settlement.
If we only want to see only specified types of ledger entry, there is no way to do it. Download it and then filter in excel, that is the only way to do. If zerodha could provide this category filter, ledger would become more readeable.
This also improves TRANSPARENCY, since now people can see where their money is going. cluttered ledger is difficult to understand. @nithin
no wonder there is a large delay in feature requests. Before they could start something new, some other thing comes up 