Why zerodha has reduced BO/CO leverage?


#1

Hi,

I just noticed that zerodha has reduced BO/CO leverage from 20.8x to 16.7x for Nifty50 stocks (cash)

Just want to know the reason, Is it because recent increase in market volatility? Or other reason @siva @nithin


#2

Yes because of increase in volatility not just past, but considering all news item pending on NBFC, expecting more of it in the near term.


#3

I could understand for BO, because BO is more risker than CO being a broker.
Can’t understand why reduced leverage for CO?


#4

Risk is the same for BO and CO. An existing stoploss order doesn’t guarantee price of execution if there is a huge movement in price.


#5

It would be greatful if the revised leverage is mentioned in the margin calculator (or if the change is for a short period of time, its OK.)


#6

Understand. But why is the same reduction not applicable for Futures. The leverage is almost twice for most of the stocks in futures as compared to cash.


#7

It will be updated.


#8

For which stock you are referring to?


#9

Futures leverage for SBIN is 37x. If I see cash for 3000 quantities of SBIN (same as the lot size), I find 16.7x. This is for BO.


#10

@siva can you pls help respond to this.


#11

Futures itself are leveraged products hence the difference.