Zerodha brokerage fee hike for F&O trades
Indian stock broking platform Zerodha has increased its brokerage fees for intraday Futures and Options (F&O) trades to ₹40 per order for accounts that do not comply with the 50% cash margin requirement, effective April 1, 2024.
The company communicated to its users that the increased brokerage fee would apply to intraday F&O trades for accounts with cash and cash-equivalent collateral below 50% of the margin required for the trade. Previously, the brokerage fee was ₹20 per order.
According to Inc42 sources, Zerodha’s terms and conditions already stipulated an additional brokerage fee for accounts in debit, but the company had not implemented this until now. Zerodha cofounder Nithin Kamath explained the rationale behind the move on the platform’s community forum.
Kamath stated that as per SEBI (Securities and Exchange Board of India) norms, 50% of the total margin required for F&O trading must be in cash or cash-equivalent instruments, with the remainder in non-cash collateral like stocks. Zerodha covers the cash shortage when a user fails to maintain the required margin.
Kamath noted the increase in margin trading and the growth of Zerodha’s margin trading facility (MTF) book to over ₹5,000 Cr in a short time, indicating that the company may need to borrow funds to provide collateral. Borrowed funds incur costs, prompting the need to charge additional fees on trades.
This development follows Kamath’s earlier statement about potentially ending Zerodha’s zero-brokerage model due to the government’s increased scrutiny on F&O trading. However, sources indicate that the platform does not plan to introduce charges on equity delivery brokerage.
In the 2026-27 budget speech, Finance Minister Nirmala Sitharaman announced an increase in Securities Transactions Tax (STT) on F&O trading, effective from April 1. The STT on futures was increased to 0.05% from 0.02%, while options premium and exercise of options would attract an STT of 0.15% from 0.1% and 0.125%, respectively.
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