Zerodha's MTF Share

[nithin_kumrr]

We were probably the last broker to launch MTF, very late compared to other big brokers, and the growth in our MTF book since then has been a surprise.

@nithin shared this on X a while ago:

We launched MTF in December 2024, and we’ve quickly gone from 0 to 5% of the MTF market. I’m not sure whether to be happy or worried.

As of now, the net P&L of all positions taken by traders who have used MTF is positive.

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Leverage is like a weapon of mass destruction, and MTF is a leveraged product, so trade with caution. You can read about the risks of MTF here.

[CrownedEagle]

Can you tell us median (if not distribution) P&L of traders instead of net across all traders? It might give an idea of distribution of P&L among traders.

As very few highly profitable traders combined with large number small traders using MTF can still push the net P&L number above Zero.

[pankushri]

Few questions here.

1. 5% of what? Zerodhas users total equity holding?
2. How zerodha is funding at this large?

[siva]

@pankushri

5% of what? Zerodhas users total equity holding?

5% of total MTF book, which is around 90k cr.

@pankushri

How zerodha is funding at this large?

Our funds.

[Jaydip_Ghosh]

Whether collateral fund can be used for MTF?
If yes what is the percentage of Cash and collateral fund in MTF…

[Norton_Fernandes]

@Jaydip_Ghosh

Whether collateral fund can be used for MTF?

Its not allowed now, in their to do list.

[Adarsh_Patil]

@Jaydip_Ghosh

Whether collateral fund can be used for MTF?

As of now, you cannot buy stocks in MTF using collateral, but you can use collateral to maintain the MTM losses in MTF.

[Sanjeev_Sandh]

Just to know the extent of your ‘surprise’, what is the share of MTF of other brokers?

[TradeB2B]

But your interest rate charge is still high , zerodha is one of the largest broker , still you are charging high

kotak and icici is chrging only 9% - when RBI rate also came down , but your rate are still high

[DILIPCHALLANI]

Exactly. The Interest rates of Zerodha is higher on all above. As a largest broker in India - ITs a definite worth to reduce the Interest Rates, this will be an ease to the small traders.

Please.

[craval]

When mtm losses are covered by collateral margin, ledger balance goes negative and delayed payment charges are applied?

[nithin_kumrr]

@nithin shared an update on this again today.

We launched our MTF product a year ago. Despite being one of the last brokers to offer this and without actively promoting it on the order screen or elsewhere, we captured ~5% of the market. But growth has plateaued along with the broader industry.

One surprising thing I have noticed is that customers don’t seem to care about MTF brokerage or know what they’re being charged. Our current brokerage is 0.03% (or ₹20). At a flat 0.1%, our brokerage revenue could be 10x higher. These rates are much higher elsewhere.

We’ve kept the brokerage rate consistent with our other trades and avoided complications like position size limits on MTF trades. All customers get the same rate, making operations simple.