Zerodha will levy higher brokerage on certain intraday futures and options (F&O) trades from April 1, increasing the charge to ₹40 per order for a defined group of users. The change targets traders who do not keep at least 50% of their required margin in cash or cash-equivalent collateral, and is aimed at addressing rising funding costs faced by brokers.
Revised fee structure and applicability
Under the new policy, intraday F&O orders will attract a flat brokerage of ₹40 per order for accounts that rely on pledged securities or other non-cash collateral to meet margin obligations. Traders who maintain a minimum of 50% of their margin in cash or cash-equivalents will continue to be charged the earlier lower cap.
The hike does not extend to equity intraday trades or to clients who meet margin rules through cash. Zerodha has clarified that the additional charge is intended only for situations where the broker must fund a margin shortfall because required cash is not available in the client’s account.
Reasons behind the change
The adjustment reflects regulatory expectations and growing operational costs. SEBI requires brokers to ensure a portion of client margins is held in cash; when clients pledge securities instead, brokers often need to fund the gap, incurring financing costs.
With an increasing share of clients using pledged holdings rather than cash, Zerodha’s funding burden has grown. Rather than introduce complex or tiered penalties, the firm has chosen a simple flat increase for non-compliant intraday F&O trades to pass on part of the incremental cost.
Impact on traders and market behaviour
Retail traders who frequently take leveraged intraday positions using non-cash collateral are likely to see their transaction costs rise, particularly those executing high-frequency trades. The change may reduce the attractiveness of heavily leveraged strategies financed by pledged securities.
Market observers expect the move could nudge traders toward holding more cash margins and practising tighter risk management. Brokers across the industry may also consider similar pricing changes if funding pressures persist.
Practical steps for traders
- Maintain at least 50% of the required margin in cash or cash-equivalent instruments to continue paying the lower brokerage cap.
- Review intraday F&O strategies and trading frequency to assess the impact of the higher per-order fee on overall trading costs.
- Consider alternative margin and collateral practices—such as keeping a cash buffer—to avoid funding-related charges.
As India’s derivatives market grows, traders will need to balance leverage and collateral choices with evolving broker policies and regulatory norms to manage costs effectively.
