RISKS with the new brokers?

[interceptor47]

Great to see new brokers entering the arena with attractive brokerages plans (viz. RSKV/Zerodha/SMT etc.). Exactly what was needed in the trading world!

Was wondering what are the possible risks in trading with these new entrants, in the event any one of them decides to shut down shop/ go bankrupt? What happens to the cash parked in the demat account with them (e.g. for delivery-based trading)? Is they any govt. backing?

 

[soft_trader]

Great to see new brokers entering the arena with attractive brokerages plans (viz. RSKV/Zerodha/SMT etc.). Exactly what was needed in the trading world!

Was wondering what are the possible risks in trading with these new entrants, in the event any one of them decides to shut down shop/ go bankrupt? What happens to the cash parked in the demat account with them (e.g. for delivery-based trading)? Is they any govt. backing?

Nothing will happen to your shares even your broker goes bankrupt
Because Shares doesn't lies with brokers it is centrally stored in NSDL/CDSL.

 

[interceptor47]

I agree that shares would be safe.

I had asked what about the cash - which is held in the demat account of the broker, till it is transferred to the linked savings account? (or at least that is how I understand it is).

 

[interceptor47]

Never said that they had any intentions and would run away with money. It was more of any unintentional possible exists. I'm all for new entrants and am glad that finally we are entering into the low-cost brokerage era! Competition is an effective way for economic growth... and in the end customers are the winners.

At the same time it helps to know and plan for any possible risks. After all risk minimization/mitigation is a part of any investment/trading strategy!. Thus the question.

 

[Creep]

Great to see new brokers entering the arena with attractive brokerages plans (viz. RSKV/Zerodha/SMT etc.). Exactly what was needed in the trading world!

Was wondering what are the possible risks in trading with these new entrants, in the event any one of them decides to shut down shop/ go bankrupt? What happens to the cash parked in the demat account with them (e.g. for delivery-based trading)? Is they any govt. backing?

It is risky as hell, so use only a fraction of your capital and be ready to jump off the bus as soon as you see a problem, problem with payout and etc..

Some of the new guys, some on traderji and others which are not are trying to jump on the bandwagon based on NOW.. The pricing offered is almost similar, so don't try to worry about a penny, it is best to choose the one who has had a track record..

The little I have studied balance sheets, Zerodha and RKSV are the best bets.. They both have a management which understands business, but Zerodha probably more because they have their own platform which works pretty well and they have been doing buisness for much longer..

I'd say stay away from the others, there are dime a dozen that have come up, some of them seem like they are setup on the pretext of swindling money... They will say yes to everything you want, you know there is nothing like a sweet deal in life..

 

[interceptor47]

It is risky as hell, so use only a fraction of your capital and be ready to jump off the bus as soon as you see a problem, problem with payout and etc..

Some of the new guys, some on traderji and others which are not are trying to jump on the bandwagon based on NOW.. The pricing offered is almost similar, so don't try to worry about a penny, it is best to choose the one who has had a track record..

The little I have studied balance sheets, Zerodha and RKSV are the best bets.. They both have a management which understands business, but Zerodha probably more because they have their own platform which works pretty well and they have been doing buisness for much longer..

I'd say stay away from the others, there are dime a dozen that have come up, some of them seem like they are setup on the pretext of swindling money... They will say yes to everything you want, you know there is nothing like a sweet deal in life..

Thanks for your response. That helps!

 

[Mihir Bijur]

Interceptor is right. We need more discussion like this. If SEBI can't protect Investor community, Traderji sure can! Seniors, please share your knowledge.