Does zerodha sell client details?
im asking because when i hit big loss or profit im getting calls/sms from people if i want loan/great investment plans.
You can share here only, everyone can see that and enlighten themselves. Any one can reproduce that, not necessarily to be a big or profitable trader. With any broker one can reproduce the same. It has to do with algos. In US upto 80% of daily volume is driven by algos and even in India it is picking up rapidly. Algos can implement various strategies to deceive users, that is normal across the globe. Main point here is one should be aware of these things and should prepare themselves to not fall as prey to algos instead like that person who is spreading worthless rumors which are no use to anyone.
No, we donāt.To just let you know there are many other intermediaries involved in trading. Like your dp, exchange, regulator, sms service provider used by exchanges to confirm your trades etc and few more. At any point, any individual can turn rogue. logically also why would we sell our client data to others? if we do we will be at losing end right.
Ok good to know siva. some websites legally share user data. like for example when i signed up for moneycontrol it asked for phone number to verify user, and very next day i got bombared with whats app messages and random trading groups added me to their group. it was very next day so easy to point where my details got out. then went to read their privacy policy and it turned out they will sell every customer data to third parties including phone numbers.
Few Questions remain (not just zerodha but brokerage houses in general):
Trades/orders are visible to a brokerage house in real time. (It should be as Zerodha was offering open trade for āEducation purposeā) ? Yes or no
Brokerage house can do simple analytics to find the profitable trader ? Yes or no
Trading arm of a brokerage house can easily use the star traderās order information to piggy-back along with his trade ? Yes or no
Yes, Algos can be like thatā¦but it can be that a brokerage house owns that algo ? Yes or no
BR
Yes it happen with me also but I thought it is some kind of algorithm or market making involved in this. Also I donāt think it is illegal in any way .
You think there will be someone who can make continuous profits for ever? Also being a retail trader is very easy, one can get in and out quickly without any impact. It is very difficult for big volume traders to do so, all prop desks are big ticket players, their entry and exit will have impact and it is not easy to emulate small traders. Discipline, knowledge and money/risk management are the ones which separate successful traders to unsuccessful ones.
May be you should study more on this. Algo can be owned by anyone, even you can built if you can.
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Right, not illegal and very difficult to pinpoint the end user.
You think there will be someone who can make continuous profits for ever?
No pro-trader(profit making) would claim thisā¦ At the same time if a person is not going to make more money in the positive trades compared to the losing trades consistently, he should leave this game. The point is can a brokerage house peek and tag along a successful trader or not. If so, they would begin with a positive edge already compared to the retail.
Hypothetical question:
Letās say there are 1000 pro and successul traders in a clientele of 5 lac. So, a brokerage house just taggging along their trades (while distributing the capital) across these traders can consistently generate income. Is it not ?
I never questioned the legality !
It is too naive to assume prop desks just dump the money on single trade/algo and so on.
I am not sure how to decide that 1000, what time frame one should consider to give them profitable tag? anyhow I can say at zerodha we donāt do this and canāt comment about others, but individually I believe one should ignore all these hypothetical questions and work on improving their own trading because end of the day thatās what matter. I am not saying not to learn more things about the system but worrying about things which are out of our control is waste of energy.Happy Trading.
āI am not sure how to decide that 1000ā simple check their past performance of 2 yearsā¦ from the set of 60 day competitors, is it difficult to decide a set of profitable tradersā¦ !?
fyiā¦author of https://www.amazon.in/Trading-Nifty-Futures-Living-Chartless-ebook/dp/B06Y1ZFX6N one such guy who is winner of zerodha 60 day challenge for more than 10-15 timesā¦
I think we made some progress hereā¦Is zerodha giving trade/order flow information to outsideā¦definitely it does not seems so. You vehemently deniedā¦ now whether it is being consumed internally ā¦ You did not say it with same intensity and clarity that you do not consume any order information run analytics and tag your trades along with the set of profitable trades. Instead you were talking of legality of the thingsā¦ !
We donāt do this internally.
To all Traders here, give me answer of just 1 question
is there any brokerage firm in india, CEO of which personally reply to your all queries ?
@nithin and his team @siva do it regularly , they are providing you platform to ask your trading and market related queries and you can get answer of all your queries also.
i am customer of zerodha from last 5+ years
sent multiple e-mails to @nithin and venu in past and they always replied me even at 2AM
Rather than promoting conspiracy theories, its better to spend this amount of time in learning about markets or spend time with your trading style like if anyone is TA, spend time with your charts, they will help you in long run rather than these meaningless conspiracy theories.
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Are You a profitable trader from starting and after joining zerodha suddenly you started doing all loosing trades ?
everyone knows truth about there trading.
donāt want to comment to anyone
they know answer very well , how they are performing earlier and current performance.
better to focus on learning and spend this time in improving your trading
make trading journal, find your mistakes and try to donāt repeat them again
your trading performance will automatically improve drastically.
doing discussion on these conspiracy theories will not going to improve your trading performance.
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We really canāt be sure in this but such messages simply do not appear out of nowhere anyway and I think it really needs to be addressed. Do you really know the sure way how to address that issue anyway ? I do not see anything like that being done.
Many Thanks for confirmation. Sorry, for the delays in replies/querries as I check this site only on weekends.
Being a leader of retail broking, Zerodha should/can set a standard by including a voluntary āConfidentiality Clauseā in the agreement. The confidentiality clause that could specify that the data is not getting shared/consumed internally and/or externally. This would boost further, the confidence of the retail clients. This is even more important with gtt orders as order information is available to Zerodha for few days to weeks in advance.
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Good to know about your positive feelings about Zerodha.
I am customer of Zerodha for more than 6+ years and have been victim of most of their Technical glitches!
FYIā¦ go throughā¦
https://en.wikipedia.org/wiki/NSE_co-location_scam If sucheta Dalal(money life) had not understood, what was happening, brokerage houses could be gaining even now.
If a reputed exchange can do thisā¦ why not a brokerage house. All brokerage houses are not clean.
FYIā¦
Among the lot, Zerodha has been most transparentā¦no doubt about it.
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Dear @NithinKamath
I think we have reached a point in this thread wherein only you can take it forward. Please go through the thread if required to get the context.
Brokerage house having a prop desk is fine (nothing illegal) but there is a conflict of interest (common sense says so).
Conflict of interest arises because of the following:
- Brokerage house can see the order flow and can do counter trading by feeding info. to Prop desk.
- Brokerage house can run analytics to find best traders and use that information for trading without their knowledge or consent.
A statement on the social media that Zerodha is not processing or using orderflow data is fine but is not legally binding.
My thinking is there seems to be a systemic gap (may be a flaw)ā¦ that SEBI and exchanges do not specify explicitly that a brokerage house and its prop desk should not process the order flow data in any way. Probably with advent of AI and other mechanisms, it becomes much more easier for a brokerage house to harness the data from the order flow.
Now that Zerodha is offering gtt, the order information is available to zerodha in advance for weeks to months. As Zerodha is biggest retail broker, the order value lying its servers could be very big.
As soon as one becomes a client of zerodha, one would start getting pesky calls from various advisory services based in Indore. If a zerodha as company can not secure the user information as simple as mobile number, how can it secure bigger data.
Today, a Client has to have trust in brokerage house that nothing happens insideā¦ I can trust Nithin but not a company. Now, clients (as a whole set) are at the mercy of brokerage house in this regard.
My thinking is there should be a Confidentiality clause (or similar mechanism) between the client and brokerage house which is legally binding.
Zerodha being the disruptor of this industry has become biggest retail brokerage house as it has been listening to customers and meeting their needs (although many times dealyedā¦ but thatās a diffrent story)!
I feel it should /can introduce this confidentiality clause/mechanism so that it becomes a standard across the board.
thanks and good luck!
PS: Brokerage houses using order information may just be a small drop in a big ocean; there might be even more bigger other sides of a broking business !
So, finally what you expect that brokerages should do? This is the same case with all brokerage houses across the globe.
Every popular brokerage house in this world offer GTC style features, in countries like US order flow is sold to market makers and money is made out of it by brokerages.
Dark pools exits and even orders are not traded on exchanges. Typically in US order can be sent to market maker or a brokerage can be a counter party to itās clients or it can be placed on ECN(Electronic communication networks) or even sent to dark pools. I suggest you to read more about the order flow practices in USA before trying to fix someone for oneās loss, generally only a bad worker blame the tools all the times.
I already answered in this thread about this. I categorically mentioned at Zerodha we donāt sell data or use order flow to counter trade.
Lastly from colo (colocation- offered by all global and domestic exchanges at a cost) one can view entire order book of all clients at exchange level. According to you Broker can see their clientās orders but if one subscribe to colo entire order book( market depth, currently retailers can see only top 5) can be viewed and exchanges are offering it for a price.
@Neostar this is quite possible all the broker has to do is analyze the list of accounts which is consistently losing money but still replenishing the capital in the hopes that they will start having their winning streak, the leverage such traders take and the trades they take and the number of time spent by such traders in lower time frame (like 1 minute & 5 Minute), All these information is readily available for the broker to trade against the losing consensus to make it look normal in front of SEBI & regulators. Another question is we still donāt know who are the liquidity providers for Zerodha? as in does the trade goes to the exchange directly or Zerodha sends to the LPs first to fill the orders or the trades goes to the exchange does it involve STP or ECN is Zerodha an A book broker or B book broker. Because getting the broker license and maintaining it calls for lot of capital and if one has footed that huge a bill upfront then he/she would want to safe guard the capital and think of business growth. Mr. Kamath had given us the analysis last year (2022) that how many people have lost money in percentages and person only knows the percentages if he knows the underlying hard numbers you know what I mean 
So ya, the conclusion is all of this can be quite possible but still a retail trader has to stay under the LPs/FIIs/DIIs/B Book Brokers as these guys are providing opportunity for us to make money through our cellphones right 