Nov 01, 2018 04:09 PM
59236 Views
I have been using Zerodha as my primary broker since 2015. They are very handy if you are looking to trade in stocks or options spreads with the objective of making short-term profits.
However, if you are primarily an investor, who would like to invest long-term, especially in mutual funds, Zerodha is not such a decent choice.
Even if you are dabbling in relatively "safe" options spreads, like Bull Call or Bear Put, you have to make sure that you understand the risk-reward ratio first. Zerodha has some good education material for starting your financial education.
However a trader has to be an astute chart analyst or a technical analyst, as well as skilled in basic data analysis or programming to seek out winning trades.
While Zerodha does provide some analytical tools for technical analysis, those are based on the Freemium model. Hence, even though they have flat brokerages, there are add-on tools, which incidentally help them generate revenues on other fronts. That may be good news for Zerodha, but not so good for retail traders.
Any trader who is also skilled in computer programming, will, however, find an API useful, and Zerodha does have one such API, for a monthly paid subscription. For everyone else, they have to either subscribe to any premium service, or use any alternative API or algo trading tool.
One of the major downsides of Zerodha, especially for investors, is trading in mutual funds. The way I see it, there are mainly two disadvantages as compared to some other full-service brokerages(Zerodha started out as a discount broker).
1.If someone wants to analyze a specific mutual fund scheme, Zerodha only provides a charting tool to view at the past returns of that scheme. What it does not provide, is a detailed breakup of portfolio allocation for that particular scheme. Some other brokerages certainly do that.
2.If a customer wants to start an SIP in any MF scheme, he has to either park his money in his demat account(in which case he does not earn any interest on that money unlike a savings account), or he has to make sure that he regularly buys units in that scheme manually, every month(a tedious process). Zerodha is yet to come up with a mechanism where an automatic SIP mandate debits money from a client's bank account directly.
When it comes to technical charts, Zerodha has an excellent set of tools, web-based, Windows software, Android App, and all of them are absolutely a trader's delight. Zerodha seems to have been created with traders in mind, so the charting tools they provide are definitely top class. They have a Stock Screener as well, which is Freemium, and that is pretty good. They have a basic Black-Scholes calculator, and another premium Options spread analyzer. However, for these purposes, it always best to rely on specific programming languages like R or Python.
Zerodha's customer care is quite helpful and friendly.One good thing about them, is that they never spam a client with marketing calls(at least in my experience), relying instead on their word-of-mouth publicity.
This just about sums up my personal experience about Zerodha. I am open to comments or questions from other Mouthshut.com users. If any of you can provide me any valuable tips or feedback about Zerodha, that will be helpful to me.
