Zerodha : Working and Strategy

 Zerodha : Working and Strategy
Zerodha is a platform providing low and cheap brokerage rates for future. It is primarily an Indian financial services company which is quite prominent among the stock brokers. It offers retail and institutional broking, commodities and currencies trading, bonds and mutual funds. It was founded by Nithin Kamath in 2010. It has over 1100+ employees and its revenue is approximately 1,093.64 crores or US $150 million.

The headquarters of this Zerodha is situated in Bengaluru. It marks its presence in several other cities of the country. It is considered to be one of the largest stock broker of India. It has over 5+ million of clients for its services. The company contributes to over 15% to all retail order volumes in India. It offers services related to trading and investment in many arenas. Some of them are commodity and currency derivatives, options and futures, direct mutual funds, stocks and IPOs, bonds and government securities.

Zerodha follows a concept of discount broking and price transparency. There are no hidden charges and includes flat fees. Rs 0 is required equity delivery and direct mutual funds. Rs 20 is required for intraday and F&O. It offers a massive open market education which includes basic to advanced trading. One can open a demat and trading account online and start the investment for free. It has also entered the unicorn club with a self assessed valuation of about $1 billion.

  • WORKING OF ZERODHA

Online trading services are offered to the customers through this platform. It primarily works on an online discount brokerage model. It is completely technology driven and hence, does not have much of offices for the same. Reduction and scaling of the operational cost is done with the help of ever growing technology. It helps to maintain huge profits despite offering low cost trading. For investment purposes, three types of accounts are required namely trading, demat and bank account. The trading account offered by Zerodha helps in placing, buying and selling orders.

It also offers trading in Forex. Currency derivatives trading can be done at BSE and NSE exchanges. Do not forget to enable the Currency Trading Segment prior starting. It has proved to be beneficial for long term investors because of its favourable services. It brings down the trading cost by offering free equity delivery brokerage. It does not accept personal fixed deposits for as margin for trading. It does not provide interest on the money held.

  • STRATEGY FOR ZERODHA

If you are someone opting for intraday trading, you can choose momentum trading strategy. One has to keep an eye on the stocks which are on move. Stock scanners can be beneficial for this purpose. They have potential momentum along with no close resistance and high relative volume. Momentums are caused by several factors. It can be due to fundamental catalyst like earnings. It mostly works during the starting of the trading hours.

Reversal Trading Strategy is yet another strategy to work with. It provides a chance to enter the security very close to support. It keeps the bar low and and success rates high. It takes a short position to capitalise on the downward price movement.

Try to stick with the trend as much as possible. Usually people sell stocks which turn expensive and buy those whose prices have reduced. Stock prices often trend in certain directions for long periods of time. Do not buy more stocks to fix a trading mistake that you have made previously. Leverage can prove to be very dangerous for people who do not know how to handle it. Get proper information regarding and then move on with it.

Do remember that all of this involves market risks. Think and carry out proper analysis before getting into investment. One should be ready for any losses that may be faced during the process.

Chetna Singh

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