Discount Broker Comparison

In a any given trading day, anybody knows what would be approximate retailer contribute to cash market turnover...?

For example, if cash market turnover is 1000 cr, 25% goes to delivery so there is no impact of 250 cr..

Out of 750 cr , i feel around 80% should come from FII/DII, HNI etc etc..means 600 cr is also no issues..

So balance 150 cr is retail participation..as likes of zerotha reduced margin already, and many pro retail traders using no margin , can we safely assume 50% of retail volume only leveraged transaction?

If so only 7.5 % of volumes only will have impact ?
 

TracerBullet

Well-Known Member
Generally true. Some exceptions are surgical strike day or us election day. Bid ask goes so wide that over leveraged positions can put whole system at risk. Less leverage makes a healthy environment and less chance of any broker going broke.
If stocks are liquid, you wont have that much issue although there is always risk. I have seen stops give me slippage increasing my loss to 2.5X intraday. Still well within limits.
One case can be if someone takes a concentrated bet on 1 illiquid stock with very high leverage and uses margin to the limit.
But there is much more risk for overnight positions, crude going negative is recent example, pharma stocks in us have made many 50%+ gaps.
Broking business has to manage risk by being well capitalized to absorb such shocks. But there is no case for intraday leverage/risk to be seen as same as overnight risk ( stock/index futures).
Otherwise we can all just just trade with 0 leverage and ban short selling/ option selling where in theory you can loose unlimited amount.

Anyway, no amount of argument from us will change regulation. When rules get made, we will have to adapt.
 
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Schatz

Well-Known Member
If stocks are liquid, you wont have that much issue although there is always risk. I have seen stops give me slippage increasing my loss to 2.5X intraday. Still well within limits.
One case can be if someone takes a concentrated bet on 1 illiquid stock with very high leverage and uses margin to the limit.
But there is much more risk for overnight positions, crude going negative is recent example, pharma stocks in us have made many 50%+ gaps.
Broking business has to manage risk by being well capitalized to absorb such shocks. But there is no case for intraday leverage/risk to be seen as same as overnight risk ( stock/index futures).
Otherwise we can all just just trade with 0 leverage and ban short selling/ option selling where in theory you can loose unlimited amount.

Anyway, no amount of argument from us will change regulation. When rules get made, we will have to adapt.
its not argument.. discussion helps build more clarity for all of us ..

If u had trading one of such days u would know that even BN options go highly illiquid and bid-ask can be as wide as 100 pts instead of usual couple of pt .. so u can leave aside stocks which are anyways riskier than indices .. for overnight positions they have risk models and circuits which takes care of big moves ... where as in leveraged intraday position ur margin of safety is not that much (a fraction of that) ...

Coming to crude .. negative prices were anticipated in US mkts and they provisioned for neg prices .. We did nt do that .. its missed from our side i would say ... Crude was a very very special case anyways ..
 

TracerBullet

Well-Known Member
its not argument.. discussion helps build more clarity for all of us ..

If u had trading one of such days u would know that even BN options go highly illiquid and bid-ask can be as wide as 100 pts instead of usual couple of pt .. so u can leave aside stocks which are anyways riskier than indices .. for overnight positions they have risk models and circuits which takes care of big moves ... where as in leveraged intraday position ur margin of safety is not that much (a fraction of that) ...

Coming to crude .. negative prices were anticipated in US mkts and they provisioned for neg prices .. We did nt do that .. its missed from our side i would say ... Crude was a very very special case anyways ..
A 100 point slippage should not bankrupt system. A 200 point slippage in NF should not bankrupt system else there is bad risk control. Its a hit but should not be fatal.
So someone being able to trade NF position taking margin to the limit with margin not being able to cover say 75 * 500 = 37k per lot - that is risky for the broker. But here we have a margin of 1.5L which will be same for intraday and overnight and that makes little sense. Overnight gaps are certainly bigger and more violent than intraday spikes.
Circuits will only help for incorrect spikes, we can have real new info which moves fair price beyond the bands. IF there is no liquidity, price will move beyond circuit too.
Crude - Inspite of that, IB took a hit - their software was not ready. A lot of these issues are special cases and some are unavoidable and hence you need brokers with good cash balance and risk control.
 
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bpr

Well-Known Member
In a any given trading day, anybody knows what would be approximate retailer contribute to cash market turnover...?

For example, if cash market turnover is 1000 cr, 25% goes to delivery so there is no impact of 250 cr..

Out of 750 cr , i feel around 80% should come from FII/DII, HNI etc etc..means 600 cr is also no issues..

So balance 150 cr is retail participation..as likes of zerotha reduced margin already, and many pro retail traders using no margin , can we safely assume 50% of retail volume only leveraged transaction?

If so only 7.5 % of volumes only will have impact ?
intresting but I wonder if FII/DII engage in intraday trading if yes they will be affected too ...
I know proprietry trading by various rokers definetly use intraday leveradge(in fact they can trade at much higher leveradge than what we can) so they will be affected
Also option sellers I know for a fact their big pay day is on expiry where they go ham with intrday leveradge ...so they will be affected ...
what I am saying it is not just retail traders everyody is affected by this
 
intresting but I wonder if FII/DII engage in intraday trading if yes they will be affected too ...
I know proprietry trading by various rokers definetly use intraday leveradge(in fact they can trade at much higher leveradge than what we can) so they will be affected
Also option sellers I know for a fact their big pay day is on expiry where they go ham with intrday leveradge ...so they will be affected ...
what I am saying it is not just retail traders everyody is affected by this
Maybe the registered FII/DII have different rules preventing them from trading intraday officially.
 

bpr

Well-Known Member
zerodha planning to launch their loan product for traders
zerodha had a nbfc license for some time now but for some reason they were reluctant to offer loans ...now that sebi killed the intraday leverage perfect time to launch their product ...
this is huge plus for zerodha ...small brokers I don't think can compete with zerodha ...getting nbfc license is not cheap
this will be the new normal ...don't forget to thank sebi now you get paid leverage instead of free leverage ..
 
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lemondew

Well-Known Member
Its loan against securities if i read it correctly from mint article.

zerodha planning to launch their loan product for traders
zerodha had a nbfc license for some time now but for some reason they were reluctant to offer loans ...now that sebi killed the intraday leverage perfect time to launch their product ...
this is huge plus for zerodha ...small brokers I don't think can compete with zerodha ...getting nbfc license is not cheap
this will be the new normal ...don't forget to thank sebi now you get paid leverage instead of free leverage ..
 
Any views between Angel, upstox, iifl, 5 paisa? Reliability (safe) and customer support wise.
I have used Angel, Upstox and 5 paisa. However, I find Upstox more seamless and easier to use. They have a decent support team and are quick with any query resolutions comparatively. Like the other two, Upstox also offers a free demat and trading account. But the user interface and ease of use is way better in Upstox.