India’s leading discount brokerage firm Zerodha has revised its pricing structure, increasing brokerage charges for certain intraday futures and options (F&O) trades. The new rule, effective from April 1, is expected to impact a specific segment of active traders and reflects changing dynamics in India’s broking industry.
New Brokerage Structure Explained
Under the updated pricing, Zerodha will charge ₹40 per order for intraday F&O trades, up from the earlier ₹20 cap. However, this hike is not applicable to all traders. The increased fee will only apply to users who do not maintain at least 50% of their margin in cash or cash-equivalent collateral.
Earlier, Zerodha used to absorb the funding cost for such margin shortfalls. Going forward, traders relying on non-cash collateral will bear this additional cost. Notably, traders who comply with margin requirements or those trading in equity intraday segments will not be affected by this change.
Why Zerodha Made This Move
The decision is largely driven by regulatory and cost pressures. As per guidelines from the Securities and Exchange Board of India, traders must maintain a minimum portion of margin in cash. When users fail to meet this requirement, brokers need to fund the gap, increasing operational costs.
With a growing number of traders using pledged securities instead of cash, Zerodha’s funding burden has risen significantly. Instead of introducing complex penalty structures, the company has opted for a simple flat fee increase for non-compliant trades.
Impact on Traders
This move is likely to impact retail traders who frequently take leveraged intraday positions using non-cash collateral. For such traders, trading costs will rise, especially for high-frequency trades.
At the same time, the change may encourage better compliance with margin rules and more disciplined trading practices. Industry experts also believe that this could influence other brokers to adopt similar pricing models in the near future.
What Traders Should Do
To avoid higher charges, traders should maintain at least 50% of their margin in cash or cash equivalents. This ensures they continue paying the lower brokerage fee.
As India’s trading ecosystem evolves, managing costs and understanding regulatory requirements will be crucial for long-term success in the derivatives market.