Why does Zerodha use NSE by default when BSE is cheaper?

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.

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NSE has Liquidity and monopoly

The Charges are negligible when you compare NSE and BSE, for about one crore worth of transaction the difference wouldn’t be greater than 100 Rs Max. If you have limited quantity to sell/buy you could chose the one where you get better price but for more quantity the same can’t be said about BSE, though for the top 50-100 highly liquid shares the story is quite same but for the thousand others NSE should be preferred.

NSE overall has better liquidity. BSE may have more listed companies but when it comes to overall liquidity and participation NSE has an upper hand. BSE, F&O are DUD while NFO on the other hand has great liquidity.

The question is not whether I can choose BSE or NSE. The question is why Zerodha uses NSE by default, with no option to change it. I don’t do intraday gambling and I don’t transact in dubious stocks with low liquidity, so the liquidity of NSE is not really important for me. Whether the difference is 100 rupees or 1000 rupees, there’s no reason to waste money.

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?

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.

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does zerodha started allowing the interoperability trades intraday ?


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What is the reason not starting the same ?

pls reply

It requires major changes in frontend and backend which may be not be possible in near time.

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

This is circular reasoning, and doesn’t explain anything. You are essentially saying there’s no option to choose BSE because we have not given the option to choose BSE.

You are again making an assumption that you have to choose only one. Why not provide both, and let the user decide? You can, of course, keep NSE as the default, but provide an option in Profile to change it to BSE.

The issue is not whether the difference is Rs. 25 or Rs. 25 lakhs. The issue is the inflexibility. It is not for Zerodha to decide whether Rs. 25 is “big” or “small” for me.

Like I already said, “I don’t do intraday gambling and I don’t transact in dubious stocks with low liquidity”, so this again doesn’t answer my question. You have even quoted my statement! I find your reason given quite strange because this is exactly the reason why I don’t trade in such dubious stocks.

Also said already in my starting post “Yes, I know, I can place orders on BSE myself.” But I have to jump through additional hoops to sell on BSE, that is the issue here.

Instead of trying to push the ball back into the customer’s court, you could have just said that the additional coding effort was not worth the benefits, so Zerodha decided not to put that effort.

PS: I’m not concerned about the “savings” per se, I was more puzzled by the faulty design, because I’m a design engineer myself.


I’ll pass on your feedback to the tech team. We’ll do our best.

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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?

That is not realized till you sell it, you can sell it on exchange which has better quotes.

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.