Zerodha....
- Thread starter bharath.mang
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- Tags bakwaas now cheapest brokerage nest nest plus new broker zerodha zerodha trader
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For now the challenge is on hold ... We are going slow because the concept has to be modified a bit.. 
..
We had a decent number of winners( 22%).. Around 60% of the clients were around breakeven(lower side) and remaining were down on their accounts...A lot of cases in the winners were those of doing a few trades and switching accounts as soon as they are in the money..
As timepass has posted, right now the immediate task on hand is to make our trading platform feature rich and have multi-exchange on one platform... We have learnt a few things from the first challenge and we will make the second one pretty interesting..
Cheers..
.. We had a decent number of winners( 22%).. Around 60% of the clients were around breakeven(lower side) and remaining were down on their accounts...A lot of cases in the winners were those of doing a few trades and switching accounts as soon as they are in the money..
As timepass has posted, right now the immediate task on hand is to make our trading platform feature rich and have multi-exchange on one platform... We have learnt a few things from the first challenge and we will make the second one pretty interesting..
Cheers..
SLB is a very interesting tool if you understand how it works...
We are registered for SLB and a few of our clients are already using this facility...
There are 2 participants in this:
1. People who are sitting on shares with a long term view. Since they are in it for long term, they are looking at any short term opportunities that may arise without exiting the shares...
2. Arbitrageurs, typically guys who are looking for opportunities of reverse arbitrages. Reverse arb is where the future is trading at a discount to the stock price.
Check out the following link on NSE:
http://nseindia.com/live_market/dynaContent/live_analysis/slbs_chain/chainDataBySeries.jsp
SLB watch gives a list of stocks on which there is a reverse arb opportunity. You could make a similar marketwatch on your trading platform also.
Let me give you an example with Suzlon:
1. Stock trading at 21 and futures at 20.7. In ideal circumstance the future should be trading at a premium. This presents an opportunity for the arbitrageur.
2. He finds out from us if there are any lenders of suzlon stock via the SLB mechanism... Assume there is an X person who is sitting on 80000 shares of Suzlon with a long term view on it. That said, he is looking at an opportunity of making any return from this investment during this period and he understands the SLB mechanism also..
3. We have a borrower in the arbitrageur and a lender in X. We broker the deal and transfer the shares in multiples of 8000(lot size of suzlon) from X to the Arb guy..
Because the Arb guy is doing this, 125% of the margin is blocked for this trade.. So if you are borrowing 80000 shares (suzlon @ 20), 125% of 16lks which is Rs 20lks get blocked for this...
4. The lender would charge you a fees over this margin for lending his shares. This would depend on the demand for those stocks at that point of time..
5. The arb guy, borrows these shares and sells it in the market. Same time he takes a long position in the futures, setting up his reverse arb position.
When you sell the shares you have borrowed, you get the proceed from the sale.. So in net, only 25% gets blocked for borrowing the shares(in this case around Rs 4lks)
6. On the expiry day, when both futures and spot is at the same price, the arb guy sells his futures and buys back the stock in the market.
7. This stock is returned back to the lender on the settlement day, which is usually during the first week of the new series.
Does it make sense to be doing this??
a. If you are a guy sitting on **** loads of stock, definitely yes!!! As a lender you have no risk, you are entitled for all corporate benefits plus also make some money lending the shares and also no taxation issue as it is treated as a lend transaction in the depository system.
b. If you are the arb guy looking to borrow!! hmmm.. There are sharks out there trying to make safe money, so if you have got the feel for the spreads and how they move( factor in issues like, lending cost, impact cost , brokerages, statutory taxes), there definitely lies an opportunity.. People have made loads of money when there was huge discount on stocks like Sesa goa, maruti etc... But to make some serious money, you need to be sitting on serious money.....
pheww!!! that was tiring..
We are registered for SLB and a few of our clients are already using this facility...
There are 2 participants in this:
1. People who are sitting on shares with a long term view. Since they are in it for long term, they are looking at any short term opportunities that may arise without exiting the shares...
2. Arbitrageurs, typically guys who are looking for opportunities of reverse arbitrages. Reverse arb is where the future is trading at a discount to the stock price.
Check out the following link on NSE:
http://nseindia.com/live_market/dynaContent/live_analysis/slbs_chain/chainDataBySeries.jsp
SLB watch gives a list of stocks on which there is a reverse arb opportunity. You could make a similar marketwatch on your trading platform also.
Let me give you an example with Suzlon:
1. Stock trading at 21 and futures at 20.7. In ideal circumstance the future should be trading at a premium. This presents an opportunity for the arbitrageur.
2. He finds out from us if there are any lenders of suzlon stock via the SLB mechanism... Assume there is an X person who is sitting on 80000 shares of Suzlon with a long term view on it. That said, he is looking at an opportunity of making any return from this investment during this period and he understands the SLB mechanism also..
3. We have a borrower in the arbitrageur and a lender in X. We broker the deal and transfer the shares in multiples of 8000(lot size of suzlon) from X to the Arb guy..
Because the Arb guy is doing this, 125% of the margin is blocked for this trade.. So if you are borrowing 80000 shares (suzlon @ 20), 125% of 16lks which is Rs 20lks get blocked for this...
4. The lender would charge you a fees over this margin for lending his shares. This would depend on the demand for those stocks at that point of time..
5. The arb guy, borrows these shares and sells it in the market. Same time he takes a long position in the futures, setting up his reverse arb position.
When you sell the shares you have borrowed, you get the proceed from the sale.. So in net, only 25% gets blocked for borrowing the shares(in this case around Rs 4lks)
6. On the expiry day, when both futures and spot is at the same price, the arb guy sells his futures and buys back the stock in the market.
7. This stock is returned back to the lender on the settlement day, which is usually during the first week of the new series.
Does it make sense to be doing this??
a. If you are a guy sitting on **** loads of stock, definitely yes!!! As a lender you have no risk, you are entitled for all corporate benefits plus also make some money lending the shares and also no taxation issue as it is treated as a lend transaction in the depository system.
b. If you are the arb guy looking to borrow!! hmmm.. There are sharks out there trying to make safe money, so if you have got the feel for the spreads and how they move( factor in issues like, lending cost, impact cost , brokerages, statutory taxes), there definitely lies an opportunity.. People have made loads of money when there was huge discount on stocks like Sesa goa, maruti etc... But to make some serious money, you need to be sitting on serious money...
.. pheww!!!
that was tiring..More info on SLB, article in ET. Volumes still low and not practical for the inexperienced but increasing nonetheless.
How is brokerage charged for lending?
How is brokerage charged for lending?
Hey Zerodha,
But that can also be done using futures alone. Using a calendar spread and using much less capital.
But that can also be done using futures alone. Using a calendar spread and using much less capital.
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