i am trading in f&o actively from past Apr 1, 2018.
these are the statistics from my p&l statement.
net realised p&l ~= 65k (loss)
in that brokerage without gst ~= 17.3k
that’s huge amount of brokerage.
for my trading style monthly fixed brokerage plans with unlimited trading are perfect.
@nithin@siva will zerodha bring the unlimited trading for fixed brokerage plans ?
your reply will help me decide to whether look out for other brokers providing those plans.
i am happy with zerodha except this huge brokerage. i am ready to pay 800~1000 per month fixed brokerage for unlimited trading and free access to sensibull pro. is it a big ask ?
EDIT(26 March): Looking at various comments i want to mention that from April i was having loss every month until January 31. February and March have been profitable months. So I agree the startergy or poor trade management caused loss for 10 months.
Now if you consoder only last 2 months (Feb and March) i generated a net realised profit of X in which brokerage without gst is 7k.
thats 42k brokerage per year without gst.
if i move to fixed brokerage plan (lowest i came across was 600 per month and max was 900 per month) then i wud be saving 30k per year.
ofcourse there are caveats of new broker like platform stability, tools, hidden charges, poor customer service etc.
The below response is just my personal view and I am not writing this as employee of zerodha.
To start with eq buying is free and zerodha charges for fno and eq intraday, so basically major revenues are from brokerage generated by fno trading. Investing in mutual funds is also free.
Consider for example 1000 rs is fixed plan per month, how many of fno traders are there in India? as of now there are around 85 lakhs of active traders in India, active means at-least traded once in last one year, I believe most of them are equity traders and let’s consider at higher end, 20% of them also traded in fno, so that comes to 17 lakhs, I believe( this is just my wild assumption) not more than 5% of them place 50 orders or more in a month, so that comes to 85k. That 85k involves hnis, retail, institutions and everyone. As zerodha is retail brokerage and having 10% of share consider 8500 clients of above are trading with us. So if they are paying 1000 per month, revenues would be 85 lakhs per month. Zerodha has 1300 plus employees, it has to pay them, it has to pay office rentals, pay for platforms, leased lines, different vendors, etc.
How do you think zerodha can manage these fixed costs alone ?
Also we have costs involved on each and every order irrespective of it’s size and that is the reason we charge on per order basis instead size of order.
Recently we became self clearing member and made clearing charges also as zero for fno.
Keeping this aside, you are trading from last one year, even 1k per month would end up paying 12k by you so your losses would have been 60k instead 65k, so I see problem is with your trading style, may be you should work on that.
Sensibul is third party company and we have nothing to do on what they charge but if everything is offered for free then there will be no motivation for building new things.
I hope you will understand it,this is not just about brokerage but overall environment surrounding it like reporting tool, additional trading tools like smallcase,sentinel,streak,sensibul,stock reports and many more in coming days, educational initiatives like varsity etc reiterating again, this is just my personal opinion.
Brokerage of Zerodha is the lowest considering all the features offered & better customer care than other brokerage houses. I’ve seen full service brokers whose platforms not only hang frequently, they don’t listen to any problems also. At least we can contact top people of Zerodha here. I personally very happy with Zerodha’s brokerage & services. Till today I’ve never faced any problem from their customer care service. In the past I’ve used ICICIDirect, Reliance Cap, SBICap, IndiaBulls, Sharekhan, Motilal Oswal and finally Zerodha. One thing is sure - If you are not happy with Zerodha you can’t be happy with any other brokers in India.
A perfect trader never thinks of the brokerage what he pays. 17 / 12 = 1416.66 on average 64.39 Rs per day (22 trading days in a month) it’s very less i.e 1 full trade per day. By keeping this negative impressions in your mind my lead you to loss in trade’s. Be confident before placing a trade and check many times whether it it correct or wrong. Believe in you and keep moving one day you will see all this charges as very small when compared to your profits.
Adding to what Siva said, businesses have to earn to survive and sustain. It is even more important in businesses like ours where we are custodians of client assets. A fixed monthly fees in a very shallow participation market like ours is not a sustainable business model. If you probably pick up the financials of those who you are referring to, they’d probably be running losses.
How about average revenue you earn per client as one plan. For example if you got 100 clients and you earn 1000 per client average , keep some unlimited plan where you charge 2k or more per month, which you feel comfortable, mostly those who don’t need wont join and you get as usual brokerage and there may be a client you have who averages about 12k per year may give you 24k in a year.There may be few clients who quits in six months after losing in 15k brokerage .Or some client may be with you for ever giving you 48k in 2 years .Definitely this will attract new clients . It is ok to charge like current plan if you have no competitors , below are your competitors .
Kotak securities (Free intraday)
Axis securities (Free intraday for options)
Icici direct (Free brokerage if squared off in 5 mins) or I-gain plan where you pay no brokerage for loss trades.
There are tons of other poor brokers who provide various plan , but recently i can see lots of affiliates started promoting kotak securities.
Bro zerodha has eaten a big chunk of these renowned brokers. So just to survive in broking business they are offering such lucrative offers. Although 20 RS isn’t much zerodha is a pioneer in discount broking. Although they need to look into these technical glitches occouring frequently.
Yupe , one will rise today , another will rise tomorrow . Zerodha is best right now only because of its User Interface , newbie friendly. I am talking about surviving for long term , do you think before 5 years u got brokerage for 20 , In 5 or 6 years market participation will increase and some one will post in forum that once upon a time brokers used to charge 20 rupees per order :o , brokers will fight and ultimately price will come down to survive. Who knows suddenly next year ambani can release something like awesome interface , ultimate security , free plan for 1 year and then just 299 per month retailers dream.
I agree zero dha giving good service with low brokerage(comparatively) for most of retail traders. But in average, min 10 % of profit goes to brokerage. We are paying brokerage for even losing trades also. What about unsuccessful traders . All full time brokers fallen prey in the case of high brokerage. That’s reason they moved to customised brokerage or free day trades for big traders. Now discount brokers enjoying a lot entrant traders. If they survive in market they surely change brokers. At the end discount brokers keep new comers or losers only. and expecting to run the business.
whatever else I am happy with zerodha when i started 2 years back i hear the name zerodha in dubai one of my friend before i trade in icici it’s really more complicated and expensive , zerodha is very easy to trade and manage i made around 12 lakhs profit last year in FnO i am really happy with zerodha , I will never go, but i have one worry about zerodha they still not providing to pledge Liquid mutual Fund , thats the one black dot i have other things are ok…
But some traders say Zerodha is equivalent to Jio in trading world. Because of Zerodha the price war intensified among brokers. Who knows Zerodha might be planning free plan for 1 yr to finish all it’s dying brokerage houses