Hey readers, I hope you are doing really well, and am sending lots of hugs, and positivity to all of you. Guys, the advancement in technology has changed a lot of things and the way we work. It has also shaped up major industries too, and the rise of the internet has played a major key role in it. With the rise of the internet, there has been a huge that I have noticed in the financial sector. Yes, the financial sector has been shaped up a lot, right from buying insurance to banking and even trading stocks.
One such revolution in the field of stock market brokerage and has changed the way we trade stocks with zero commissions and has recently announced its plans for an IPO, is India’s leading stockbroker, Zerodha. So, how did Zerodha started, and became the number one stock brokerage in India within a span of 10 years? So without further adieu let’s dive deep into the journey of Zerodha right from its origins to the services that they offer.
Zerodha:- Origins
It all roots back to 2010, when two young engineer students and brothers Nithin and Nikhil Kamath were really intrigued by the stock market. So, they started as traders, and then slowly and steadily got into the fundamentals i.e reading annual reports and analyzing them. But the problem was that the brokerage fee was too much as most brokers charged a lot of commissions, which made it difficult for new investors to invest in the stock markets due to high commission.
This is where they noticed this problem and came up with a solution. They wanted to create such a platform that will be commission-free for buying equity and charge a minimum amount of fee for intraday trading.
In 2009, they started working on this commission-free platform, and hired programmers to develop such a platform that’s not at all complicated, and is easy to use for beginner investors too, and hassle-free. In August 2010, they finally kick-started the operations of this brand new stock brokerage called Zerodha. And had its headquarters in Bangalore.
The word Zerodha has a unique meaning, as it’s a combination of Zero and “Rodha”, the Sanskrit word which means barrier. Is it unique readers? They have a disruptive pricing model and in-house technology that makes this platform so unique and easy to use. As of 2020, they have over 5 million+ active users, contributing about 15% of all Indian retail trading volume. Zerodha is referred to as the “Robinhood” of India. Let’s talk about the,
Features of Zerodha:-
Zerodha has great features and tools that really make it one of the best stock brokerages in India, and easy to use not only for beginners but also for amateur traders and investors. I was confused when I embarked into the journey of stock markets and had no idea about which brokerage should I use, as there were people who told me to use so and so brokerage service for buying stocks, and that literally demotivated me, like I was literally demotivated, then I came across this channel called Finnovationz on YouTube, and came across this video called Full-Service Broker V/s Discount Broker to understand the basics about the brokerage services in India, and the guy mentioned Zerodha in it, and I quickly went to their site to check about the fees and it features and I was completely blown away with its services and features. And then I chose Zerodha as my only brokerage and guys I highly recommend you to subscribe to Finnovationz for stock market news, and some pretty good information about businesses, and some basics about stock markets in general. For those who don’t know the difference between Full-Service Broker and Discount Broker, I’ll elaborate it shortly so, basically a,
- Full-Service Brokerage:- Is a type of brokerage service that charges brokerage fees and commission on your equity order and also provides services like personal assistance, research reports, stock tips. You don’t have to do much research and analysis on your own.
- Discount Brokerage:- Its a type of brokerage that charges zero commission on your equity orders and charges minimum on intraday trading and doesn’t provide personal assistance, annual reports, stock tips. You have to do your own research and analysis.
Zerodha is a discount service brokerage, that doesn’t charge commissions and fees on your equity order and doesn’t provide stock tips and research reports. And that’s what makes Zerodha a flexible platform for buying and selling stocks. And that’s what made me intrigued towards the stock market and Zerodha in general. As it provides some really good features and tools like:-
- Zerodha Kite:-
Basically, it an interface or a platform where you can track down your portfolio and also can buy, sell, and hold stocks. It is one of the best interfaces for tracking down your portfolio and placing equity orders. It also consists of a great feature tool called Console, which is just outstanding as it provides you with some great insights about your portfolio right from equity to futures and options. And also maintains a trade book, a report where it tracks down your portfolio returns, profit & loss, taxes, and 60-day challenge, basically a challenge of making out profits in 60 days. You can also trade commodities on Zerodha Kite. And it’s flexible and it gives an easy option to insert funds to buy stocks via Netbanking and UPI.
2. Streak Zerodha:-
This is one of the best features or a platform by Zerodha. So, before we dive deep into this feature, we must understand what Algo Trading is? I consider it as the future of trading or a possibility of trading. Algo trading is a type of trading in which certain algorithms are created with the help of computer programming, which leads to a defined set of instructions that are then programmed for placing a trade to generate profits at a speed and frequency impossible for a human trader. So, this platform called Streak Zerodha is all about algorithm trading, where you can set certain instructions and can program it according to your needs i.e placing an order and can book your profits. Basically, it’s Artificial intelligence and machine learning that is embedded into the system. You don’t have to track and analyze your portfolio manually, as this algorithm trading reduces that burden, and it automatically places the order and analyzes it. And also, algorithm trading might replace human analysts in the future that means you don’t need a financial analyst anymore.
3. GTT in Zerodha:-
Before we dive into this feature let us understand what GTT is? GTT stands for Good till triggered it’s a feature that works in order and is active until the trigger condition is met. This trigger is valid for a year. So anytime if the price condition is met within this period, your order will be placed and executed, provided if there’s enough fund in the trading account, and your limit price order is filled on the exchange.
GTT is triggered only once, so in case if your order is placed and not executed for any reason then the GTT has to be placed again. And yes, Zerodha provides this feature and it can either be placed as a buy GTT or sell GTT. Buy GTT is used to create triggers to buy stocks for deliveries, and the GTT buy order is executed once the trigger price is hit. Sell GTT is used to exit current stock holdings, and it could be either a trade order or both stop loss or target where triggering of one will cancel the order.
4. Zerodha Leverage:-
This another feature where you can take leverage from Zerodha to trade in the stock market. This has been in effect from September 1st, 2020, new guidelines have been issued. So, if you want to trade in the stock market, then all you have to do is pay 20% of the upfront margin of the transaction value to trade in the cash segment. And also you can pledge stocks for margins. Here’s the list of stocks that you can pledge.
5. Coin Zerodha:-
This is an amazing feature or platform by Zerodha if you are looking forward to investing in mutual funds. Before we dive deep into this feature let’s understand what a mutual fund is? Basically, a mutual fund is a type of financial vehicle or a pool of fund in which investors pool money into it, and the portfolio managers working in an asset management company invests that money into securities like stocks, bonds, money market instruments, and other assets.
So, if you can’t research stocks on your own or are skeptical about it, then you can go for mutual funds by comparing their returns with the market and if it has beaten the market with great returns then invest in it. So, here’s where Zerodha comes, Coin by Zerodha is a platform where you can select mutual funds with zero fees and it is one of the largest direct mutual funds platforms that let you buy direct mutual funds online without any commissions, directly from the asset management companies. And not only you can invest in mutual funds, but with the help of Coin Zerodha you can also invest in G-Secs(Government Securities), and Corporate Bonds too.
6. Varsity:-
Varsity is an educational platform by Zerodha, that provides education on topics such as stock markets basics, advance, mutual funds basics, advance, Technical Analysis, Fundamental Analysis, Futures & Options, Currency, and Commodities in an animation manner.
Zerodha Brokerage Charges:-
Zerodha is the best platform when it comes to buying equity, as it doesn’t charge a commission on delivery. It’s zero cost and that’s the reason why I chose Zerodha as my stockbroker platform. Whereas for intraday, Zerodha charges Rs 20 per trade, obviously this is where they make money. Not only Zerodha but every stockbroker charges for intraday trading. Zerodha also charges Rs 20 per trade for futures and options.
Zerodha charges Rs 29.56 per trade for currency futures and Rs 36.49 per trade for currency options. Zerodha is pretty much cheaper as compared to Upstox, as both the stockbrokers charge zero on delivery and charge Rs 20 on intraday trading.
Zerodha charges around Rs 300 for account opening whereas Upstox charges Rs 150 for account opening, and also Zerodha charges Rs 300 per annum as Demat AMC Charge, whereas Upstox charges Rs 150 per annum as Demat AMC Charge. I prefer Zerodha as it’s a brokerage platform that not only provides a Demat a/c and trading a/c but also provides various platforms and features like Coin, Streak, and Varsity that makes investing in the stock market interesting and also makes it more intriguing. Yes, it differs in terms of charges, but Zerodha is worth it.
Zerodha Account Opening Process:-
Opening a Demat A/c on Zerodha is very simple all you need to do is:-
- Go to Zerodha’s website.
- Click on create an account.
- Fill in the details like name, address, email id, bank details, Pan No., etc.
- Then select the type of account you want like cash & delivery & F&O where you can buy and sell stocks and trade in futures and options and another option is a commodity where you can buy commodities like Gold, Silver, Copper, etc.
- Once you selected the type of account that you want, it’ll take you to a page where you have to link your Aadhar number, as your phone number is linked with it and you’ll receive an OTP, so simply enter the OTP and done, your account is ready to use.
- In case if your Aadhar is not linked with your mobile no. then you have the print the documents, with the photocopy of Aadhar card, and a canceled cheque and then courier them to the following address:- Zerodha H.O [No.153/154 4th Cross Dollars Colony, Opp. Clarence Public School, J.P Nagar 4th Phase, Bangalore-560078]. Since it’s an offline process, it might take up to 2 weeks for your account to be ready for use.
- They charge Rs 300 to create an account, which you have to pay online.
It’s very easy to open a brokerage account in today’s time as you don’t have to call the broker or go to the broker’s office to open an account. All you need is a laptop or a mobile phone with an internet connection and then go to the broker’s account and sign up. That’s it, so simple and hassle-free.
Zerodha Customer Care:-
The customer service of Zerodha is pretty awesome. They have maintained status and reputation. So, when I embarked on this journey of creating an account and had to go the offline way, I simply called their customer care and they were very helpful, as they really instructed me very well, and elaborated the entire process to me. And also sent their account opening person to my office and then I submitted the documents for opening the account via offline mode and it was just good, they do value their customer, and when I tried to open an account on Upstox via offline mode, they really disappointed me, and I really didn’t like their customer care service at all. But Zerodha never disappointed me. Just amazing customer service they have.
Conclusion:-
So, that’s it for the day readers. If you really want to start your investing journey and are confused about how to start, and which brokerage service to choose, I would say talk to people who are in the investing business for a long time and then search online for brokerage services and then make a decision according to it. Or better go to Zerodha’s website and see what services they provide, trust me you won’t be disappointed. Time is changing so make the most out of it.