By Zerodha’s own brokerage calculator, executing a trade on NSE leads to more charges than on BSE. So why does Zerodha place orders by default on NSE? Is there any option to change this to BSE?
Yes, I know, I can place orders on BSE myself. However, the question is about why Zerodha prefers NSE by default. When you choose the Add or Exit options from Holdings, Zerodha places the order on NSE (with no option to change to BSE). Also, in the watchlist, the icon showing your existing holdings appears only on the NSE instrument.
The order window doesn’t have an option to switch Exchanges even while placing an order from the marketwatch. When you’re trying to exit holdings, we’ll have to select one of the 2 Exchanges, we’ve selected NSE. If we’d selected BSE, someone could ask why have not NSE?
While we’re Exchange agnostic, we’ve set NSE as default, since like someone said earlier, the liquidity is better.
In the Equity segment, for 1 crore turnover, the savings in terms of transaction charge is Rs.25. One trade in an illiquid counter is enough to wipe you of your transaction fee savings. Plus its not that you don’t have the option of selling on either of the Exchanges.
But for NRI’s there is no choice I understand that interoperability of stock exchanges have come into place but that has restricted our choice is there something that Zerodha can do so that NRI’s have the option to trade on the BSE also sometimes things are much cheaper on the BSE than the NSE?
Thanks
This is because under interoperability if you buy on one exchange and sell on the other, it’s considered an intraday trade which wasn’t the case earlier. NRIs aren’t allowed to do intraday trades. In order to be compliant, if the stock is listed on both exchanges, you can trade on nse. If its a bse listed stock, you can buy it on bse.
Would it not be simple to just block the sell option on a particular scrip when a buy has been initiated on the same ISIN number during the day?
I am not sure about major changes to the backend
Hi @VenuMadhav, I bought shares from BSE and it automatically got switched with NSE shares today even though the market was closed. I understand inoperability but shares at BSE were at 2.66 and NSE at 2.50 so now my holding is already showing 6% loss because of this switch. If the trade happened through NSE then must have been settled at 2.50, so what happened to the 6% I lost?
Once the shares hit your demat account, they become Exchange agnostic. You’d be able to sell them in whichever Exchange you wish to, and as @siva said, the loss is realized upon sale.