With a different business model, Zerodha trading has only become a unique way of trading that is changing the face of the traditional stock world. Recently, the company has been christened as ‘India’s best retail brokerage firm for 2018′ by National Stock Exchange (NSE).
Zerodha is an online stockbroking startup based in Bengaluru and working its way up for the last 8 years. The platform witnesses over 2 million trades per day which makes it the largest retail brokerage firm in the world. The technology deployed by Zerodha is huge and backed by the operations team comprising of 1000 to serve 1 million clients.
Zerodha operates unlike any other firm and has no revenue targets for their employees, do not differentiate client based on net worth and follow the conservative path for risk management (RMS). They have been growing their ecosystem with education initiatives like Varsity, Zconnect and Tradingqna.
Zerodha trading has been talks for many years with numerous rumors about their business model. Still, apart from being awarded by NSE, the online stockbroking firm has also been recognized by Ernst & Young and ET after the completing financial audits, as mentioned on their official website.
With this different business model of trading online, unlike the traditional way, Zerodha has come across many challenges. One recently being a case where the company has been asked to pay a client 37 lakhs to make for the good losses he had incurred while undertaking futures trading on the Zerodha platform.
CEO of Zerodha Nithin Kamath retorted to this and claimed that the action was not made in haste but in favor of the said client. He further explained that in future trades there is a margin hat a client has to maintain, and if the stock tanks and the client’s margin depletes, then the brokers sell off the stocks at the current price to prevent further losses, as published on the Economic Times.
“A broker is entitled to design and implement its risk management policy the way it deems fit in line with its business model,” Chairman of Bombay Stock Exchange Brokers Forum Uttam Bagri said. Zerodha trading being an online scenario where companies do not personally interact with the clients need to lay down the rules and follow them vigilantly.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]