Why zerodha has reduced BO/CO leverage?

[siva-reddy]

@vikas1989

do u guys have ny plan to set leverage back 16x or 20x? Please answer. If yes then When?
I understand reducing leverage for derivative products but why for equity stocks from 20.8x to 13.2x?

We will be setting around up to 15 times, soon.

[vikas1989]

Why not setting it original state 20.8x for TCS, SBIN, HDFC and other biggies? I don’t see high volatility in these stocks

[siva-reddy]

@vikas1989

Why not setting it original state 20.8x for TCS, SBIN, HDFC and other biggies? I don’t see high volatility in these stocks

Our RMS team perceive other way,we see volatility is going to stay here for few more months, so we have reduced a little. Also just an update for you, SEBI may come out soon with a mandate where leverages also need to be regulated, if that happens 9 to 10 may be max irrespective of product type used.

[Keyur_Beladiya]

Today I tried MIS and BO on SBIN for below

MIS Order - Qty: 500, BUY Price: 284 - margin blocked 9940 Rs.
BO - Qty 500, BUY Price: 284 - margin blocked 10735 Rs

Don’t you think something wrong here? BO margin should be less than MIS margin here?

[vikas1989]

Hi @nithin
Currently zerodha provides 15.2x leverage for cash CO/BO
Are you guys planning to change this in near future or it will remain constant?
Asking so that I can arrange funds in my trading account accordingly in future.

[Raz]

Sebi plans uniform leverage norms

[vikas1989]

This article talks about FNO. Here I am asking about cash segment

[vikas1989]

@nithin

[nithin]

@vikas1989

Currently zerodha provides 15.2x leverage for cash CO/BO
Are you guys planning to change this in near future or it will remain constant?
Asking so that I can arrange funds in my trading account accordingly in future.

@vikas1989 currently no regulation around this from SEBI, only on F&O. We might increase it though when markets become volatile, like we normally do.

[vikas1989]

Any chance to make it 20x after volatility decrease or election results? @nithin

[siva-reddy]

@vikas1989

Any chance to make it 20x after volatility decrease or election results?

No plans as of now. Volatility is one thing which we don’t know until it hit us. Also rumor is that SEBI may come out with uniform leverages that can be provided across segments across brokers, if that comes out one can’t provide extra leverage and has to charge VAR( value at risk) and ELM( extreme loss margin), in that case it may come out max 10x, so better don’t build your system on leverages and be prepared for it.