Based on very positive feedback on this forum, I opened the account Only about a week ago and I have already decided to close it. Zerodha is a terrible trader for F&O. The margin for short position carryover is not specified. It is the same when you look at the website under RMS--both for MIS(intraday) and Normal). At the end of the day Zerodha will liquidate your position for insufficient margin. According to Zerodha,client is supposed to calculate margin for carryover,which is 2.5 times of intraday. It is ridiculous. Will the client undertake trade based on the information available or keep calculating. It appears to be rotten software developed in 16th century in some remote village of Africa..
One can lose big money in volatile market with Zerodha in F&O
Do not be carried away with low brokerage. You will lose many time more due to their lousy software.
Best of luck to those who want to do short F&O trades with carryover with ZERODHA.
T
HANK YOU,
Margin required to short options is one of the major reason of confusion amongst most of the brokers in India. Though we are emulating the concept of discount brokerage in the US, technology wise the available choices are quite limited.
By popular demand we give intraday leverage on shorting options and futures trading by default to all our clients. So, if you are placing an order as NRML by default for intraday you will require only 40% of the overnight margins. We educate about the same on our welcome letter that is sent when the account is opened.
Margin required for futures trading is very simple and is available on the span margin file, but most of the trading platforms in India don't have the facility to let you know the exact margin requirements for writing options. Most of the people assume that margin required for writing is very similar to buying options, which is not. Because option writing has unlimited risks, the margin requirement for in the money options can be much higher than margin required to trade futures. As an online discount broker, when there is a short margin we are forced to square off the positions because otherwise there would be an exchange penalty the next day morning.
This said, we are probably the first brokers to have found a fix for this problem. We are migrating to our own trading platform, Zerodha Trader and we have developed a span margin calculator tool . This tool will tell you exact margins required for writing options/futures based on your entire portfolio.
For eg if you write 5400 calls and buy 5500 calls, margin required to write 5400 calls should drop. Drop by how much?? this will be shown on our calculator before you take the position.
Also, we are giving two product types based on how you intend to trade. If you want to trade intraday with leverage, use the product type MIS and if you don't need leverage use NRML. If you use leverage, you will get time till 3.20pm to square off positions, but at 3.20pm all MIS positions would be squared off. This will give you complete control on how you wish to trade and would not require any intervention from our side. All your MIS positions can be converted to NRML and NRML to MIS in a click of a button on the link f11(admin position).
I'd ask you to give it a shot with the new platform, in terms of features, leverage and brokerage, this would be among the best bet in the Indian market scenario.
