What are theoretical risks of trading via Zerodha?


I am curious to know technically what are the risks of trading cash equities via Zerodha. More importantly under what circumstance can the client lose money via zerodha that is not due to their trading strategy? What are the credit risks associated by choosing Zerodha as the broker ? Are there any regulatory requirements on reportin where you report your capital position which can be viewed publicly ?

I dont know the credit rating or capital position of Zerodha.

Also, specific to my trading activity, when I transfer money to Zerodha account, it shows up as margin on my trading screen.

  1. Technically can Zerodha default on this margin?

  2. Once I trade a security and request delivery from Exchange, is this cash transfered to the exchange the moment I trade the security or is it transfered on the day of settlement ?

  3. In who’s account does the cash/margin reside when I trade a security ?

  4. What is the difference of margin when I transfer cash from my bank account to my trading account versus margin recieved from pledging securities

Kindly please answer



Your question is like you visiting a friend’s marriage, enjoying eating all the delicious food at the wedding and then questioning what’s the guarantee that your friends’ wedding will last.


I had answered a similar question earlier. Check this link

Why do I see a downvote on this question ? I cant even see who downvoted it … whats the matter ?

Hi Abhishek
I guess Zerodha is leading brokerage farm for discount brokerage market in India and obviously equity market is highly regulated by Govt. But only one thing where I see little concern is sometimes their systems get down and you might land up in a situation where you loose your money as you can’t exit your trade at correct time. I see similar complaint before and same happened with me last week where I couldn’t exit my trade as their bracket order server was down and Zerodha don’t take that responsibility for any loss. Apart from this I had a smooth ride I must say… cheers.

Wrong example. I am a customer not a guest of Zerodha. It is absolutely within my rights as a client of Zerodha to know what are the risks.