Zerodha, a prominent stock broking platform, has announced a significant increase in brokerage fees for intraday futures and options (F&O) trades. Starting April 1, the fee will rise to ₹40 per order for accounts that do not meet the 50% cash margin requirement.
This change was communicated to select users, indicating that accounts with cash and cash-equivalent collateral below the mandated 50% will incur the higher fee. Previously, the charge was set at ₹20.
While Zerodha's terms already stipulated additional fees for accounts in debit, the company had not enforced this until now. Sources suggest that Zerodha was considering whether to implement interest or extra brokerage for such cases.
Nithin Kamath, cofounder of Zerodha, addressed the rationale for this decision on the platform's community forum. He explained that according to SEBI regulations, at least half of the total margin required for F&O trading must be in cash or cash-equivalent forms, with the remainder allowed to be in non-cash collateral.
Kamath elaborated, stating, "If you pledge a stock for collateral of ₹1 Lakh without providing any funds, you are effectively using the broker's capital for ₹50K. If we are funding you that amount without earning from it, we incur losses. Hence, we need to impose charges on these trades."
He also noted the surge in margin trading activity, mentioning that since the introduction of the margin trading facility (MTF), the book value has skyrocketed to over ₹5,000 crore. Kamath indicated that Zerodha might soon need to borrow funds to support its clients, which would come with associated costs.
This announcement follows earlier comments from Kamath regarding the potential end of Zerodha's zero-brokerage model due to ongoing government regulations affecting F&O trading. However, sources confirm that there are no plans to implement charges on equity delivery brokerage.
Additionally, during the Budget speech for 2026-27, Finance Minister Nirmala Sitharaman revealed an increase in Securities Transactions Tax (STT) on F&O trading, effective from April 1. The STT on futures will rise to 0.05% from 0.02%, while options premiums and exercises will see increases to 0.15% from 0.1% and 0.125%, respectively.
