Module 1 Introduction to Stock Markets

Chapter 1

The Need to Invest

514
Ch 1 Need to Invest

Investing money is necessary to survive the increasing cost of living.

1.1 Why should one Invest?

Before we address the above question, let us understand what would happen if one choose not to invest. Let us assume you earn Rs.50,000/- per month and you spend Rs.30,000/-towards your cost of living which includes housing, food, transport, shopping, medical etc. The balance of Rs.20,000/- is your monthly surplus. For the sake of simplicity, let us just ignore the effect of personal income tax in this discussion.

To drive the point across, let us make few simple assumptions..

  1. The employer is kind enough to give you a 10% salary hike every year
  2. The cost of living is likely to go up by 8% year on year
  3. You are 30 years old and plan to retire at 50. This leaves you with 20 more years to earn
  4. You don’t intend to work after you retire
  5. Your expenses are fixed and don’t foresee any other expense
  6.  The balance cash of Rs.20,000/- per month is retained in the form of hard cash

Going by these assumptions, here is how the cash balance will look like in 20 years.

Years Yearly Income Yearly Expense Cash Retained
1 600,000 360,000 240,000
2 6,60,000 3,88,800 2,71,200
3 7,26,000 4,19,904 3,06,096
4 7,98,600 4,53,496 3,45,104
5 8,78,460 4,89,776 3,88,684
6 9,66,306 5,28,958 4,37,348
7 10,62,937 5,71,275 4,91,662
8 11,69,230 6,16,977 5,52,254
9 12,86,153 6,66,335 6,19,818
10 14,14,769 7,19,642 6,95,127
11 15,56,245 7,77,213 7,79,032
12 17,11,870 8,39,390 8,72,480
13 18,83,057 9,06,541 9,76,516
14 20,71,363 9,79,065 10,92,298
15 22,78,499 10,57,390 12,21,109
16 25,06,349 11,41,981 13,64,368
17 27,56,984 12,33,339 15,23,644
18 30,32,682 13,32,006 17,00,676
19 33,35,950 14,38,567 18,97,383
20 36,69,545 15,53,652 21,15,893
Total Income 17,890,693

If one were to analyze these numbers, you would soon realize this is a scary situation to be in. Few things are quite startling from the above calculations:

  1. After 20 years of hard work you have accumulated Rs.1.7Crs.
  2. Since your expenses are fixed, your lifestyle has not changed over the years, you probably even suppressed your lifelong aspirations – better home, better car, vacations etc
  3. After you retire, assuming the expenses will continue to grow at 8%, Rs.1.7Crs is good enough to sail you through roughly for about 8 years of post retirement life. 8th year onwards you will be in a very tight spot with literally no savings left to back you up.

What would you do after you run out of all the money in 8 years time? How do you fund your life? Is there a way to ensure that you collect a larger sum at the end of 20 years?

Let’s consider another scenario where instead of keeping the cash idle, you choose to invest the cash in an investment option that grows at let’s say 12% per annum. For example – in the first year you retained Rs.240,000/- which when invested at 12% per annum for 20 years yields Rs.2,067,063/- at the end of 20th year.

Years Yearly Income Yearly Expense Cash Retained Retained Cash Invested @12%
1 600,000 360,000 240,000  20,67,063
2 6,60,000 3,88,800 2,71,200  20,85,519
3 7,26,000 4,19,904 3,06,096  21,01,668
4 7,98,600 4,53,496 3,45,104  21,15,621
5 8,78,460 4,89,776 3,88,684  21,27,487
6 9,66,306 5,28,958 4,37,348  21,37,368
7 10,62,937 5,71,275 4,91,662  21,45,363
8 11,69,230 6,16,977 5,52,254  21,51,566
9 12,86,153 6,66,335 6,19,818  21,56,069
10 14,14,769 7,19,642 6,95,127  21,58,959
11 15,56,245 7,77,213 7,79,032  21,60,318
12 17,11,870 8,39,390 8,72,480  21,60,228
13 18,83,057 9,06,541 9,76,516  21,58,765
14 20,71,363 9,79,065 10,92,298  21,56,003
15 22,78,499 10,57,390 12,21,109  21,52,012
16 25,06,349 11,41,981 13,64,368  21,46,859
17 27,56,984 12,33,339 15,23,644  21,40,611
18 30,32,682 13,32,006 17,00,676  21,33,328
19 33,35,950 14,38,567 18,97,383  21,25,069
20 36,69,545 15,53,652 21,15,893  21,15,893
Total cash after 20 years  4,26,95,771

With the decision to invest the surplus cash, your cash balance has increased significantly. The cash balance has grown to Rs.4.26Crs from Rs.1.7Crs. This is a staggering 2.4x times the regular amount. This translates to you being in a much better situation to deal with your post retirement life.
Now, going back to the initial question of why invest? There are few compelling reasons for one to invest..

  1. Fight Inflation – By investing one can deal better with the inevitable – growing cost of living – generally referred to as Inflation
  2. Create Wealth – By investing one can aim to have a better corpus by the end of the defined time period. In the above example the time period was upto retirement but it can be anything – children’s education, marriage, house purchase, retirement holidays etc
  3. To meet life’s financial aspiration

1.2 Where to invest?

Having figured out the reasons to invest, the next obvious question would be – Where would one invest, and what are the returns one could expect by investing.

When it comes to investing one has to choose an asset class that suits the individual’s risk and return temperament.

An asset class is a category of investment with particular risk and return characteristics. The following are some of the popular assets class…

  1. Fixed income instruments
  2. Equity
  3. Real estate
  4. Commodities (precious metals)

fixed-inst-icon Fixed Income Instruments

These are investable instruments with very limited risk to the principle and the return is paid as an interest to the investor based on the particular fixed income instrument. The interest paid, could be quarterly, semi-annual or annual intervals. At the end of the term of deposit, (also known as maturity period) the capital is returned to the investor.

Typical fixed income investment includes:

  1. Fixed deposits offered by banks
  2. Bonds issued by the Government of India
  3. Bonds issued by Government related agencies such as HUDCO, NHAI etc
  4. Bonds issued by corporate’s

As of June 2014, the typical return from a fixed income instrument varies between 8% and 11%.

 equity-icon1Equity

Investment in Equities involves buying shares of publicly listed companies. The shares are traded both on the Bombay Stock Exchange (BSE), and the National Stock Exchange (NSE).

When an investor invests in equity, unlike a fixed income instrument there is no capital guarantee. However as a trade-off, the returns from equity investment can be extremely attractive. Indian Equities have generated returns close to 14% – 15% CAGR (compound annual growth rate) over the past 15 years.

Investing in some of the best and well run Indian companies has yielded over 20% CAGR in the long-term. Identifying such investments opportunities requires skill, hard work and patience.

Taxation on Equity investments held for more than 365 days is taxed at 10%, if the gains are more than Rs 1 lakh starting from 1st April 2018(previously such investments were tax free). This is comparatively a lower rate of tax than the other asset classes

real-estate-icon

Real Estate

Real Estate investment involves transacting (buying and selling) commercial and non commercial land. Typical examples would include transacting in sites, apartments and commercial buildings. There are two sources of income from real estate investments namely – Rental income, and Capital appreciation of the investment amount.

The transaction procedure can be quite complex involving legal verification of documents. The cash outlay in real estate investment is usually quite large. There is no official metric to measure the returns generated by real estate, hence it would be hard to comment on this.

commodity-icon

Commodity – Bullion

Investments in gold and silver are considered one of the most popular investment avenues. Gold and silver over a long-term period has appreciated in value. Investments in these metals have yielded a CAGR return of approximately 8% over the last 20 years. There are several ways to invest in gold and silver. One can choose to invest in the form of jewelry or Exchange Traded Funds (ETF).

Going back to our initial example of investing the surplus cash it would be interesting to see how much one would have saved by the end of 20 years considering he has the option of investing in any one – fixed income, equity or bullion.

  1. By investing in fixed income at an average rate of 9% per annum, the corpus would have grown to Rs.3.3Crs
  2. Investing in equities at an average rate of 15% per annum, the corpus would have grown to Rs.5.4Crs
  3. Investing in bullion at an average rate of 8% per annum, the corpus would have grown to Rs.3.09Crs

Clearly, equities tend to give you the best returns especially when you have a multi – year investment perspective.

A note on investments
Investments optimally should have a strong mix of all asset classes. It is smart to diversify your investment among the various asset classes. The technique of allocating money across assets classes is termed as ‘Asset Allocation’.

For instance, a young professional may be able take a higher amount of risk given his age and years of investment available to him. Typically investor should allocate around 70% of his investable amount in Equity, 20% in Precious metals, and the rest in Fixed income investments.

Alongside the same rationale, a retired person could invest 80 percent of his saving in fixed income, 10 percent in equity markets and a 10 percent in precious metals. The ratio in which one allocates investments across asset classes is dependent on the risk appetite of the investor.

1.3 What are the things to know before investing

Investing is a great option, but before you venture into investments it is good to be aware of the following…

  1. Risk and Return go hand in hand. Higher the risk, higher the return. Lower the risk, lower is the return.
  2. Investment in fixed income is a good option if you want to protect your principal amount. It is relatively less risky. However you have the risk of losing money when you adjust the return for inflation. Example – A fixed deposit which gives you 9% when the inflation is 10% means you are net losing 1% per annum. Fixed income investment is best suited for ultra risk averse investors
  3. Investment in Equities is a great option. It is known to beat the inflation over long period of times. Historically equity investment has generated returns close to 14-15%. However, equity investments can be risky
  4. Real Estate investment requires a large outlay of cash and cannot be done with smaller amounts. Liquidity is another issue with real estate investment – you cannot buy or sell whenever you want. You always have to wait for the right time and the right buyer or seller to transact with you.
  5. Gold and silver are known to be a relatively safer but the historical return on such investment has not been very encouraging.

 


Key takeaways from this chapter

  1. Invest to secure your future
  2. The corpus that you intend to build at the end of the defined period is sensitive to the rate of return the investment generates. A small variation to rate can have a big impact on the corpus
  3. Choose an instrument that best suits your risk and return appetite
  4. Equity should be a part of your investment if you want to beat the inflation in the long run

514 comments

  1. Pedro says:

    wrong commas throughout the table like
    xx, xx, xxx

  2. lian says:

    Sorry, but I didn’t understand why, in the second table, at the Retained Cash Invested @12% column, the values start decreasing after the 12th year. Look at the image:

    • Karthik Rangappa says:

      Lian, that is because even though the guy has a higher amount to invest, he is investing for a shorter duration. Hence lesser time for the money to compound and grow.

      • Kaushal Singh says:

        still why do we consider compound interest rate @ 12% ?
        Is it ideal? or do we have any graphical value? or do we have any calculation method?

        • Karthik Rangappa says:

          That is roughly the long term average CAGR of the top 20 – 25 mutual funds in India. You can find plenty of research on this online.

  3. Chandra Sekhar says:

    This site is unique and useful for investors.
    I am an investor. I am in Canada and I invest in NYSE and in TSX Mkts.
    As I have business interest in India, would be looking for opportunities there.
    You may keep me in your mailing list

  4. RP1256 says:

    This would be really helpful for all who want to understand and invest. 🙂

  5. R K verma says:

    What is the good ratio to invest in the age of 25. How much in equity and how in other instruments.

  6. vishvendra89 says:

    Line 14 in the first image is wrongly printed, please correct it. income and expenses mentioned are same. thanks

  7. Sridhar says:

    Line 14 in the Second Image too is wrongly printed, please correct it (as per the first image). income and expenses mentioned are same . thanks

  8. Jagmohan Singh Ahluwalia says:

    Sir Income tax rate charged on long term capital gain is 20%

    • Karthik Rangappa says:

      True, however shares and mutual funds are exempted from this.

    • akshaysharma2810 says:

      Long term capital gains on which Securities Transaction Tax (STT) are exempt from tax. STT is generally paid when securities are traded through a recognized stock exchange. Hence, sale of equity shares held for more than 12 months is exempt under section 10(38) of the Income Tax Act, 1962.

      • Sai Sreedhar says:

        Supposing I BUY a particular share lots (varied numbers) every month in FY (eg. April, May…. till March), how do I ensure that when I SELL, the first lot (bought in April) to be used and not the one I bought less than 12months (say month of Jan or March) – because we don’t have such option when opting in SELL.

        • Karthik Rangappa says:

          This works on FIFO basis – first in, first out.

          • Sai Sreedhar says:

            Thanks Karthik.
            Does the Broker ensures this?

          • Karthik Rangappa says:

            Its implied.

          • vinod vaddi says:

            How does this matter? If I bought 20 shares last month at INR 100 each and 10 shares this month at INR 200 each, the buying price for me averages to INR 133. Now when I sell it I make profit if the selling price is above 133. If not, loss.

          • Karthik Rangappa says:

            Yes, in terms of profitability it will be 133, however, when you consider taxation, FIFO is applicable.

          • Maha says:

            Team,
            The article is so informative for beginners like me. Kudos team!!
            I have a question on
            “vinod vaddi says:
            June 19, 2017 at 6:48 pm
            How does this matter? If I bought 20 shares last month at INR 100 each and 10 shares this month at INR 200 each, the buying price for me averages to INR 133. Now when I sell it I make profit if the selling price is above 133. If not, loss.”

            How is the buying price averaged to INR 133. Please can you explain on this

          • Karthik Rangappa says:

            The average works like this –

            Buy 20 @ 100 = 2000
            Buy 10 @ 200 = 2000

            Total investment = 2000 + 2000 = 4000
            Total Quantity = 20 + 10 = 30

            Average = 4000/30
            =133.333

  9. sushil 12 says:

    hold long term investment in capital gain for more than >3 year ..tax fully exempted

  10. prateekbagri says:

    Hi, could you please explain me how did you calculate the retained cash invested [email protected] 12% table? I cannot seem to get it.

    • Karthik Rangappa says:

      Firs year cash retain is Rs.240,000 which will be invest for 20 year @ 12%. To figure out how much this will grow to after 20 years, we need to apply the CAGR formula which is –

      Amount after ‘n’ year = Amount Invested *(1 + Growth Rate ) raised to the power of ‘n’ years.

      = 240000*(1+12%)^20
      =Rs.20,67,063/-

      Likewise the next year retain cash is Rs.271,200/- which will be invested for 19 years –
      =271200*(1+12%)^19
      =Rs.20,85,515/-

      So on and so forth.

      • Shankar says:

        Please review your calculation for cagr. I guess its 2315110 not 2067063.

        • Karthik Rangappa says:

          Shankar, the calculation assumes that the money is accumulated at the end of every year and gets invested over the 20 year period. Hence for the first year the accumulated money gets invested for 19 years, not 20. Likewise for the 2nd year it gets invested for 18 years. So on and so forth. I guess this is where the difference is coming about. Of course, I have not conveyed this point across in the discussion above, will make the necessary edits. Thanks for pointing this.

      • chaitanya says:

        Hello, can you explain me with out formula. How can this come explain me clearly please

      • Jessica says:

        I Didnot understand the calculation after we multiply the cash retained by( growth rate +1)

  11. Shankar says:

    Please review your calculation for cagr. I guess its 2315110 not 2067063.

  12. Nandhaa says:

    Kindly provide a link to download all these files in .pdf format. I am feeling difficult to read sitting in front of the laptop.

    • Karthik Rangappa says:

      We do not have the PDF version now..but may soon consider the same. Request you to kindly bear with us in this regard.

  13. sudip ray says:

    very informative and explained clearly with examples. should encourage the readers to invest for securing the future of self and his/her family.

  14. […] You are not wrong if you think of answers like to create wealth / to generate secondary income/ to be financially free/ to increase your social status by becoming rich etc. But even though you are not interested in all the reasons mentioned here, you still need invest. Let me tell you why. There is something called “inflation“. Simply defined as “The raise or fall of prices of goods“. If the price of the commodities increases, it means that  the inflation has increased. If the price of the commodities fall, it means that  the inflation has fallen. It is the job of Central Bank (RBI in India) to keep the inflation in control. Our day job salaries remaining the same and the inflation keeps on increasing year by year, so it is utterly necessary to protect ourselves from inflation. That cannot be done by keeping your hard earned money in Savings Bank account. Even the money deposited in Fixed Deposit accounts cannot save you from this inflation beast. So you must let you grow your money to take control of this inflation to fulfill your future financial goals. If you want to learn more about the need to invest, i recommend you to refer this link http://zerodha.com/varsity/chapter/the-need-to-invest/ . […]

  15. girish says:

    dear karthik sir..
    Thank you for doing rock work study material easy way, it’ll will help to all investors & traders who is interesting to learn !….
    I am rocking in market sir…. very fun. I Glad to share you sir.. sir shall you make quiz about technical indicators…? it’s interesting joy, fun more…
    thank you sir..

  16. mayur.popade says:

    Thank you very much for sharing your knowledge.

  17. Arun Manikandan says:

    The post was awesome..Would like to get more details and knowledge on the same.Share it in future :)Thanks a ton

  18. […] You are not wrong if you think of answers like to create wealth / to generate secondary income/ to be financially free/ to increase your social status by becoming rich etc. But even though you are not interested in all the reasons mentioned here, you still need to invest. Let me tell you why. There is something called “inflation“. Simply defined as “The raise or fall of prices of goods“. If the price of the commodities increases, it means that  the inflation has increased. If the price of the commodities fall, it means that  the inflation has relatively decreased It is the job of Central Bank (RBI in India) to keep the inflation in control. Our day job salaries remaining the same and the inflation keeps on increasing year by year, so it is utterly necessary to protect ourselves from inflation. That cannot be done by keeping your hard earned money in Savings Bank account. Even the money deposited in Fixed Deposit accounts cannot save you from this inflation beast. So you must let grow your money to take control of this inflation to fulfill your future financial goals. If you want to read more about the need to invest, i recommend you to refer this link http://zerodha.com/varsity/chapter/the-need-to-invest/ . […]

  19. Ravichandran Dhaya says:

    Excellent info karthik bro…. keep up the good work… as mentioned earlier by one of our friend, it will be helpful if u make it in a pdf to read these info….

  20. Saravana Perumal Durai Pandiyan says:

    Extremely good and hard work. Hats off your effort for the creation of this awareness education system. God bless you.

  21. Shreeharsha says:

    Dear sir I have 5000 thousands rupees. By using this money can I enter share market???

    • Karthik Rangappa says:

      Of course you can. I would suggest you choose a nice company and buy their shares..and stay invested. Please do not attempt F&O trades with the initial money you have.

      • surya says:

        What is the reason sir? Why should one not invest in F&O trades, isn’t the easy one for a newbie?

        • Karthik Rangappa says:

          F&O is fairly advanced, Surya, especially options. There are many factors which influence the price of options. If you are a newbie, I’d suggest you get familiar with the basics and then move to F&O.

  22. Shreeharsha says:

    Thank u sir

  23. Vinod Prasad says:

    I am not doing trading & having Zero knowledge about it, but I am interested for learning this.. From where should I learn..

  24. Vijayinani says:

    I want to make career in stock market .. right now I am pursuing degree final year, I belong to commerce field, can i know what should i start with to get jobs at stock exchange!

  25. girijanms says:

    Sir,
    Appreciate your effort and time to educate. Zerodha varsity was recommended by one of our members of investment advisory services; the greatgems.blogspot. So useful, for new entrants into the stock market. Thank you.

  26. geetanjali nath says:

    One of best methods to generate income is through stock market, Of course, it goes without saying , as in any other successful profession, it requires constant learning and learning and learning.
    Thankyou Karthik for initiating this education, looking forward to learn the art and science of stock market.

  27. Meer says:

    Hello,
    I am a beginner, an engineer trying to learn equity. Thanks!! Material is useful for people like us. Just started learning. Don’t know if my question is sensible. I would like to know whether the profit earned from investments in equity is taxable?

  28. suresh says:

    thank you very much I am a beginner…language used is very simple and easily understandable …i want to make my career in stock market field …what are the paths and courses exams etc.
    and please tell me how to download pdf files of these lessons

  29. Dev Bhansali says:

    Hello Sir.

    I am qualified CA, I am looking future in capital market and money market. i need suggestion of your, which Course i should join of NSE or other?

    Thanks & Regards

  30. Humayun says:

    I dont agree on average monthly salary of a person is 50 Thousand this days.
    Only 10 to 15 thousand is the average salary and if you are very very lucky you will get 20 Thousand there will be only one manager and CEO in a company so they can earn 50 K or more but all the employees are not getting more then 20 K month in any good companies.

  31. Roshan says:

    Thank you whoever has prepared this, Its really important in today’s time to invest for a better future. Kudos to all who put in the effort god bless.

  32. Chidu says:

    Please cross check the Cash Retained column, it seems you have appended a extra Zero at the end.

  33. sushildjoshi says:

    Hi Karthik,
    First of all I would like to THANK YOU for this wonderful website with all the incredible information!
    I am right now in New Jersey USA and working as full time Software professional. I have started going through from module 1. I want to understand when I will come to India how can I full time employee like me trade in options where there is need to continuously monitor NSE website to get good profit and it will be bit difficult during working hours in Office. Looking for some suggestions in this scenario.

  34. Prabir says:

    You are awesome sir, you explained it like it can not be easier than this. thank you so much sir.

  35. shri31565 says:

    Nice way of explaining, thank you so much sir,

  36. sriram says:

    Higher risk does not mean higher return. Higher return means higher risk.

  37. Sai says:

    can some one correct the comma(,) in Total Income 17,890,693.

  38. Vadhana says:

    Hello Sir, your teaching and service is of great help to learners like me. Have a question to you?
    In some sites i have seen people giving a tips for on stock and options etc…
    for example Buy Arvind 330 ce Sep @ 5.75 SL 4 and target is 8-10. How is this predicted or said. What is the analysis behind this. Can you please help me understand this?

    • Karthik Rangappa says:

      Thanks Vandhana.

      Most people do simple Technical Analysis and give out these calls. But here is my suggestion – please do your own analysis, this is when you will really pick up the art of trading/investing.

      • Vadhana says:

        Thank sir. Yes am doing analysis and learning by googling a lot. when we speak technical other than RSI, MACD, EMA what all i need to look into can you please guide me with the level?

        • Karthik Rangappa says:

          The more number of things you add, the more complex the system gets. So my suggestion, know few indicators but know them really well.

  39. Nirnoy Nimesh says:

    I read the article but I have few questions to ask:
    1) In the first table it is mentioned that the total income is 17,890,693. From where this value came ?
    2)In the second table the Total cash after 20 years is mentioned as 4,26,95,771 , how is it calculated ?

  40. Ashutosh Gautam says:

    1.3 first bullet point, where it says “Higher the risk, higher the return.” This is not correct.
    Actually the reverse is correct. “Higher the return, Higher the risk.”

  41. pravin says:

    hello kartik sir …i just want to ask one quest …can we invest in venture capital fund .like mutual funds …….??

  42. pravin says:

    so ..there is no way to invest in flipkart..uber ..ola …zomata…redbus …bookmyshow …etc …or other startups company..

  43. it is very much educative and in this society everybody must know it. Then only he will get a goal of his life and get independence of financial life. its name zerodha university is very much suitable.

  44. vishal wadekar says:

    i wann to learn basics of commodity trading,plz take some initiative towards it.

    • Karthik Rangappa says:

      Well, you have to take the initiative 🙂

      We already have 9 chapters in the commodities module, have you check them out yet?

  45. Roshan Vishal says:

    Very well written. I was looking for something like Zerodha varsity since ages. This is great for beginners like me.

  46. Nehasri says:

    Very Nicely Compiled & great initiative from well talented people who proves that knowledge is open for all.
    So nicely explained everything that no one can leave the forum without saying a BIG THANK YOU!!!

  47. humptydumpty says:

    Hi,
    I am totally new to shares.
    So i understood from this chapter that I should invest 70% in shares.
    Now out of those 70% in which company sector i should subdivide is there any guideline on that.
    Example Banks , Real estate , etc

    1) How many different sectors to invest in
    2) What ratio ?
    3) How many companies one should invest it ?

    As user who is having day job , tracking many companies and sectors is difficult.

    • Karthik Rangappa says:

      Firstly, when you invest, invest for long term. In this case, you need not have to track the prices daily. As far as diversification is concerned…you can consider a portfolio of 12-15 stocks..with not more than 2 stocks from the same sector.

  48. sir, please translate it in hindi because allmost person of up and bihar could not undrerstand english. if you do it various custmour will join to you and your strangth will grow. please care it bicause custmur can give advice better.

  49. Sir.really helpful ur module and ur suggestions..my question is
    1)on what basis should we pick up best mutual fund amongst all except NAV.
    2)how would be icic prudential diversifed fund to invest for 20 yrs.

    • Karthik Rangappa says:

      1) Some of the things I can think of – buy it based on the fund manager (his track record), expense ratio, kind of fund (avoid sector specific fund)

      2) Its quite good.

  50. Agarwal says:

    Hi Karthik,

    A great initiative, its exactly what i was looking for as a beginner.
    Knowledge is meant to be shared – you are actually practicing that others only preach.

    I have one suggestion – In the first table throughout Indian comma system is used for the values, but for total column western system is used.
    Please regularize the same for ease of reading.

    Thanks for the Modules.

  51. Satish rao chavan says:

    Kya ye study material hindi me mil sakta he… me hindi medium me sikhna chahta hu.

  52. santhosh kumar v says:

    do we have xl sheets of these calculations

  53. Santhosh says:

    Simple and crisp. Hope it stays same through the modules, thanks a ton.

  54. surbhi agrawal says:

    i am a b.com graduate pursuing CA as well, i am seeking some knowledge about stock exchange and other commodities as i want to invest. can you help me how can i gain information about it and from where should i start to invest??

    • Karthik Rangappa says:

      You have come to the right place. I’d suggest you start from Module 1, chapter 1 and read through everything one by one. Good luck.

  55. Vikas says:

    Can u pls explain first row last column of second table…..how it has got 20lakhs in just first yeae

  56. priti says:

    HII my father is having some shares in physical form..and he is having an accout with zerodha..could you please let me know the detailed process of how to transfer the physical share into my fathers demat account via zerodha..thankyou

  57. Mani says:

    How did you calculated “Retained Cash Invested @12%” I quite dont understand, please share the formulae

  58. jyadeep says:

    What is the margin used in Zerodha? Why is it negative in my case? What does it mean?

  59. Biswadeep poudyal says:

    i do not have any collage degree and as you know i can’t get any job.. Is this Stock investment good for me ? With this i have to have some running income too. will this help me out?

  60. Jaydeep says:

    Can i hold equity intraday for one overnight?

  61. ajay says:

    does equity auto square off intraday trading have any extra charges apart from brokerage?
    beacause i have read somewhere that zerodha charges 20rs for auto square off intraday(equity)?

  62. Naresh says:

    Dear Nithin, I have 2 accounts with Zerodha and I congratulate the entire Z team for great service of high quality and sensitivity. I need to open an account/dmat in my daughter’s maiden name because she has turned 18 and now carries a PAN card. I have the following Q (a) Post her marriage and subsequent to name change, I assume ( as told by your sales team ) that her PAN number will undergo name change and possibly the linked bank account as well. The PAN number itself will remain the same. So, does it mean that her stock savings will automatically get allocated to new name once we provide the new details. This will not force us to write to different registrars etc. and there will be no questions of capital gain etc. (b) Additionally, can we have nomination to her trading and dmat accounts ? Thanks in advance

    • Venu Madhav says:

      Hi Naresh,
      (a) Post wedding, you can get the names updated in our records by submitting a copy of the new PAN card. This will have no effect on your holdings whatsoever or the corporate actions your daughter is entitled to receive.

      (b) Yes, if you look at the demat form, you’ll find the nomination sheet there, you’ll have to fill the data and submit the form to us.

      • Naresh says:

        Thanks Venu , Can I assume that an account like Kotak 811 launched today would be good enough to open a demat/trading account with Zerodha !

  63. Biswadeep poudyal says:

    can stocks be the only way to earn?

  64. Dillip Kumar Satpathy says:

    Hi Sir, I am doing Home based Medical Transcription job and maximum time I am sitting in front of my computer with good internet facility. So 2-3 months back I decided to do online share market trading (Actually it was my dream from 2-3 years back) to invest my extra money and earn more. So from that time I am studying about this from internet and I am doing some researches. Now I have decided to open an account with Zerodha. But before that I want to know some thing. Actually I have known very less in this field till now except some basic things. My question is: Is this necessary to be from Commerce background (in graduation as I am from Science) and is it necessary to have MBA for this because I did MCA (I am not telling about the qualification, I am telling about knowledge like about Economy or Economics, other business related terms and share market related terms and definition)???

    Actually I am reading your VARSITY and getting knowledge, also studying through other websites and youtube. Is it okay to start trading like this??? I can continue my knowledge gathering simultaneously with trading.

    I want to know am I eligible for this ? Can I start with small amount now? I want to know the eligibility for trading??? OR I have to know some other things before start trading with Zerodha….

    Please reply me and HELP me out……

    • Karthik Rangappa says:

      No it is certainly not required. In fact, I come from a non commerce, non MBA, non economic background. You just need the will and desire to learn to get started with trading and investing.

      Good luck.

  65. ZT3451 says:

    Hello Karthik sir,
    I am Masud Parveze (Client ID : ZT3451)recently opened account with Zerodha. I appreciate Zerodha’s initiative to spread Trading literacy via Zerodha Varsity. It is very very useful for traders.
    Thank you.
    Masud Parveze

  66. Dillip Kumar Satpathy says:

    Hi Sir,
    I have another doubt. Actually I am studying in this Varsity and till now I have not covered all the things. My question is, what the the important topics or chapters one must know to start trading. I mean to say, is it possible to start trading without covering everything here or one must to have all the knowledge before starting……OR what are the main things one must know before opening account and start trading?
    It is right that one must study these things and market for whole life to gain knowledge and to be good in trading and investing.
    Actually I want to start immediately but I don’t know I am eligible or not. I want to know the eligibility from the point of knowledge to start trading with Zerodha….

    Please help me out…

  67. VISHNU T says:

    I’ve read about the fund transfer options to Demat account, I want to know, Is there a minimum amount that can be transferred to the account using IMPS/RTGS or any other mode. Also Is there a minimum amount that can be withdrawn from Zerodha and Is there any service charges or taxes applicable?
    Thank you

  68. Chiranjeev says:

    I heard a lot abt zerodha and it’s a safe and good trading platform. But there is one drawback as there is no RM facility provided to the customer and also zerodha should provide atleast one or two months trading for better growth in trading carrier . May be they will charge as they are discount broker

  69. Shyam says:

    Hi Kartik,

    I have some idle money lying around and I would like to invest in Liquid funds . The reason being that I can remove them if there is some contigency. Would be great if you could guide me further. What would be the returns if I park the money for a day or a month? Can I invest it through zerodha?

  70. Sarika says:

    Hi…i am new to trading…i hav done Mtech and did lecturer job but now at home for my kids..i want to start trading as a career instead of doing my lacturer job..can i earn decent amount in it and can i grow in it…plz suggest

    • Karthik Rangappa says:

      It really depends on how you trade. It can be a quite challenging if you are new to trading. Keep your exposure low, so that you risk lower amounts in your initial days. Increase the capital after you get more confident. Usually, it takes about 3-4 years and constant reading to gain some confidence in the market.

      Good luck.

  71. vikash says:

    Sir, Is zerodha platform provides pre market session data????

  72. ravi says:

    need help with buying commodity and kite functions such as…cnc,mis,co lmt..and all.
    i already went through your manuals and google too.. but couldnt get it.
    if you could explain it in simple words.

  73. CHANDRA SEKHAR says:

    Hi sir,
    I am new to this stock market Field. I have Demat account with DP 5 paisa capital Ltd. Can I change this account to zerodha or can I trade with zerodha with this Demat account. I can invest 2000 monthly . please guide me which shares to buy and when to sell to get good profits.as new to this field where and when to invest in which one like shares,mutual funds, Intraday Trading, SIP or Multi bigger shares.how to place orders and sell.if I send money to Ur accountant through NEFT would U place orders on behalf of me and also to sell because I don’t know how and when to select and place orders and resell to get good amounts.

  74. Nareen says:

    starter want to learn basic to start trading.

  75. ARPIT says:

    I seriously wish to apply in IPOs and hope zerodha provides an access to it.
    I have been a client for a year now and have missed many good IPO opportunities.

  76. Subhankar sadhukhan says:

    I have a kotak 811 account .can i open a trading account in zerodha witg this account?

    • Karthik Rangappa says:

      Yes, you can always open a Zerodha trading account. However, I’d suggest you open a Zerodha demat itself, its a lot more convenient from an operational perspective.

  77. rjazz says:

    whats the difference between a zerodha trading account and zerodha demat ?

    • Karthik Rangappa says:

      You need a trading account to buy or sell shares whereas a demat account is required to store the shares bought. Demat account is like a bank account, instead of money, you save shares.

  78. Kudos Karthik, nithin and Nikhil. I have been following your business model from quit sometime. One thing that sets you apart from other brokers is passion that you guys have and the art of sharing knowledge and creating awareness.

  79. Sahil Hajiyani says:

    Nithin/ zerodha team..lot of people including me have a thing that once they make what they reach their daily profit/loss goal they tend to become more overconfident and then at the end of the day lose their money including what they’ve had made.. i wanna recommend this..or is there if anyway you can make an alert or something so we can just stop ! Dont know if im talking stupid it or not but it Will be very helful for begineers like me please thanks

  80. sahil hajiyani says:

    hey can i buy equity future lots and hold for few days or until i want or until the expiry?????

  81. Thakur says:

    When are we gonna have LEVEL II screens??

  82. Vinod Kedare says:

    Hi thanks for all the simplified information
    Are all materials available in Hindi?
    If yes, wots the link
    If NO can it be provided in Hindi?

  83. Ramakant says:

    Lot of efforts have been put together to simplify the content.. Appreciate the work, Zerodha content team has taken.

  84. Jikariya says:

    Hi sir
    I science background .
    I have open account with zerodha and with the help of my friend started trading in equity cash but i lossed nearly 1 lack .due to wrong calls given by experts providing tips to my friend all calls are gone reverse .
    Since i fed up can u tell me how can i trade with safely in equity as well as commodty

    • Karthik Rangappa says:

      I’d suggest you read up the stuff on Varsity before getting started. Improve your knowledge and take a more informed decision and stop relying on tips to create wealth for yourself. Good luck.

  85. nishu says:

    sir, Where is pdf file of all module? please tell me……..

  86. Shanmukha says:

    Where do we get the pdf for the complete any of the module?

  87. Rajib garai says:

    It’s really a very good work to spread the fragrance of knowledge. I appreciate you and your team. For a long time I want to trade in commodity through MCX . But I am confused a little bit with taxation . I’m a salaried person and want to know how I show my profit in my return file if I do . Actually I do file from itr 1. If I do the trade then do I have to fill the other form and I am to treat as Businessman . I have to audit my account by a chartered accountant . This is the confusion and help me please . Thanks..

  88. Subhankar Paul says:

    Hello Sir,

    Thanks a lot for such a informative and educational content of trading.
    We are a group of 4 trusted friend (all resident of India), and pooled some amount (minimal amount to start off < 40k ) for investing in share market to share the risk. Can you please suggest how can we open Zerodha account and invest as a group, complying with trading laws or taxation laws.

    Thanks in advance!

  89. Aditya says:

    Please put comma properly in total income from 1st table. I read it wrong while in 2nd table it showed properly. other people might read and understand it wrongly.

  90. Sasank says:

    Sure varsity is one of the best sources available to learn about trading. But I’m one of those guys who prefer to read it on a paper. Can you please provide the pdf or some kind of offline version, so it will be very helpful for people like me. Thank you

    • Karthik Rangappa says:

      We have updated the PDFs for all modules except 5 and 9. 5 will be done next week, and 9 when the module is completed.

  91. Aditya says:

    Hello Sir,

    Great insight. I have a small query, how did you calculate the retained earnings over there with 12%? I am not able to understand that part, so please could you explain it to me once more. Your guidance would be appreciable.

    Thank you

    • Karthik Rangappa says:

      I’ve just assumed that the savings is growing at a rate of 12%. This can be any growth rate actually. The growth rate formula assuming 12% growth and 100 as amount would be –

      100*(1+12%)

      • Aditya says:

        Thank you for reply sir. I’m still not clear here, I mean if i take 240,00*(1+12%) or even 100*(1+12%), its still not correct the way you have got. So, please could you give me another 5 mins of your time and explain me this concept sir?

        Thank you. I really appreciate it.

        • Karthik Rangappa says:

          Sorry, I missed this –

          Its 240,000 growing at 12% year on year for 20 years. So the formula would be –

          240,000 * ( 1+ 12% ) ^20

          Check section 6.7 in this chapter – https://zerodha.com/varsity/chapter/the-stock-markets/ to figure out how to calculate returns.

          • Aditya says:

            Hello sir,

            Thank you for your guidance. I got the answer for the first year but then what about the rest calculation after that for the 2nd and 3rd year retained cash invested and so on because i tried to calculate again and again with different methods and formula i am not getting the same answers as above. Should i take =271200*(1+12%)^18 or =240000*(1+12%)*18. Please do let me know about your method here. Lastly, I did have a look at the link o provided me and I understood about the interest rate calculation over there so thank you about that as well.

            Sincere apologies for your taking your time and bothering you again and again. I’m just keen to understand it perfectly thats all.

            Thank you again

          • Karthik Rangappa says:

            Yes, the amount increases year on year and the time reduces by 1 year. So, 271200*(1+12%)^19 seems correct.

  92. RAKESH KUMAR SHARMA says:

    ZERODHA VARSITY, YOU ARE DOING GREAT JOB, KEEP IT. THANK YOU VERY MUCH.

  93. KUMAR MAYANK says:

    happy Teacher’s Day sir!

  94. simran says:

    sir i m security law student….thank you so much for providing info about security law…i fount this side too good and easy to learn…but sir u have provided info regarding to investor point of view. plz provide more detail info about capital and security law in more elaborate so that i can cover more topics through your side by reading practical example .

  95. simran says:

    ohk sir…

  96. Soorya Subramanian says:

    Hi Karthik,
    I just started off with Varsity Module 1 and it really good ,would like to know is there a book available on all the Modules.

  97. Syam says:

    Hi Karthik,

    I remember few days back seeing a topic called Quantitative Analysis. But looks like not able to find it now. Can you please provide link to that topic.

    Thanks

  98. Syam says:

    Hi Karthik,

    I recently started using coin platform for Mutual funds. Do you have any learning material for Mutual funds as well similar to here.

    Thanks.

  99. Abdul Muheeth says:

    Hi Karthik,

    Kindly share the PDF URL for the above.

    Thanks

  100. Tanmay Mondal says:

    Hey Kartik,

    Is there any way we can invest in cryptocurrency like Bitcoin/Ethereum/Litecoin from India. Is Zerodha flexing it’s arms to help us invest in cryptocurrency or is there any other platform in India we can turn to for investing in cryptocurrency.
    Please guide.

    Thank You

    • Karthik Rangappa says:

      Not through Zerodha, Tanmay. There are quite a few platforms in India – like Unocoin. However, RBI’s stance on Bitcoin/Crypto is not too clear yet.

  101. Romita Keswani says:

    Just loved the way you have explained everything!! It makes studying stock market interesting!!
    Thaankyou so much for sharing your wisdom!

  102. siddharth betala says:

    where can i learn about the bond markets?

  103. Manoj Kumar says:

    To
    Nithin Kamath
    Dear sir
    I am a engineering student. I know about trading.
    Dear sir, I urgently need a job. I know about a stock broker. Please give me any job. I need help. Please sir, listen me.
    I am very thankful to you.

  104. Pratik says:

    Hi Karthik,

    Your tutorials have been best. Got to learn a lot from them (still learning). After getting to learn stock market with proper information and investing, I feel stock market is the safest investment contrary to the notion that we have in India. Due to the large scale misconception people distance themselves from stock market, specially the women , the housewives. Your tutorials can really be helpful to them.
    I wish to teach my mom the basics of stock market. She does not understand much of English. It would be really great if sometime in near future your team at Zerodha can bring up this varsity chapters in Hindi. That will be very helpful for my mom and other Indians whose understanding in English is less compare to Hindi.
    Will be always grateful to you for sharing your knowledge and experience in stock market.
    “An investment in knowledge always pays the best interest.” — Benjamin Franklin

    • Karthik Rangappa says:

      Pratik, thanks for the kind words. I’m really glad you liked the content on Varsity 🙂
      Hindi and other regional languages will be a challenge as it requires translation and proofreading. I’m afraid we may not have that bandwidth now. But yes, will certainly keep this on the list things to do. Thanks.

  105. Yashwant says:

    Karthik,
    You are Great !!!
    Wonderful, Awesome ………Speechless !!!
    Your knowledge and writing skills definitely helpful.
    I have already read hundreds of articles for the last few years but could not find such a great one.
    Thank you so much for writing such unique articles.

  106. Arun says:

    Hi Karthik,

    I am Arun from Bangalore and starting preschool from January and also started my business into Life Coach with name as Gurukul, I wanted to promote the Book that is published to my school children parents and few of my friends, please advice how to go about getting the bulk quantity and also if possible let me know if you are interested in giving me opportunity to introduce my participant to Zerodha and word of Stock marketing investment (something like sub broker in and around HRBR Layout, Bangalore) If you want this to be discussed offline you can reach me at [email protected].

    regards
    Arun
    [email protected]

    • Karthik Rangappa says:

      Arun, thanks for reaching out and willing to help us in promote the book. I’ll connect you with a colleague of mine. Thanks.

  107. Zinnia says:

    In case of first table where money is not invested, earnings at the end of 20 years is 1.7 crores while expenses in 20th year is Rs.1553652. Now in the discussion it is mentioned that the earnings will last for 8 years. Isnt the calculation wrong? If not please explain how answer is 8 years. I have calculated as following:

    1553652(1 + 8/100)raised to the power n = 1.7 cr approx

  108. Shanmugha Priya says:

    Captivating beginning :). Hoping to invest in stock market after gaining a little knowledge in it .
    Karthik sir and team – Thank you for making the process simplified for people like us!

  109. Sachin Singh says:

    Bit off-topic, but what’s your honest opinion on Bitcoins (or cryptocurrencies in general) ?

  110. Dhiresh K says:

    I am not able to download into PDF. The link seems like an old one. Can you check please.

  111. brij says:

    Hi buddy ,

    I am a private job worker and recently permanently came back to India from KSA and now I don’t want to work, I have some extra money 300k.

    I want to make trading my next career.

    Please suggest ..

  112. Rohit says:

    Hi Karthik,

    This is an amazing initiative. However I couldnt find thelink to the excel for the calculations on interest. Can you help me with the same??

  113. Mayuresh says:

    That information was really helpful Kartik Sir! Thanks a lot!

  114. Riyaz says:

    Very good and helpful …

  115. Swetcha says:

    I’m very new to this but got good intro from this article.
    Great effort….!!
    Thanks

  116. Pawan Verma says:

    will Zerodta charge me if i will sell CNC stock on the same day of buying????

  117. Brijesh says:

    Treasure is here but i can not use it.

    Sir.. please think about pepole, who hungry for getting knowledge but not well in ENGLISH.

  118. vikalp says:

    long terms Capital Gains clause needs to be updated.

  119. Akhil Sharma says:

    “You may also be interested to know that the returns generated over a long term period (above 365 days, also called long term capital gain) are completely exempted from personal income tax.”

    I believe this statement might need to be updated, now that the (2018 budget proposal) is out:
    “””To tax Long-term capital Gains on sale of Equity shares / units of Equity oriented Fund if more than Rs 1 lakh at @ 10% without the benefit of indexation from AY 2019-20 i.e. from 1st April 2018.”””

  120. Jinal says:

    Hello,

    Love the content here. Amazing work!
    Eagerly waiting for content and chapters on Mutual Funds.

    Thanks

  121. Nidarshana says:

    Dear sir ,
    I try to register for demat account @ Zerodha but it shows mobile number already exist. This is first time i try to login. so please help me to open demat account and provide accurate information about offers ,annual Fees & commission etc . I wrote feedback so many times through mail but till today i cont able get proper information . I hope this time surely resolve my issue …….
    THANKING YOU

    • Nidarshana, can you call up 080-49132020 and provide the executive with your mobile number? They will provide you with all the necessary information and have your account reset to enable you to continue with the signing up process

  122. Rajesh says:

    Hi,

    Can any of your executive please look into the ticket 963955.
    I have raised this ticket 1 week back and still it is open.
    My funds have not been added and no one is replying.
    Can you please raise this issue to concerned team?

    Thanks
    Rajesh

  123. Duvvada Harish says:

    Thank you

  124. Sumant says:

    At one point it says “As of June 2014, the typical return from a fixed income instrument varies between 8% and 11%.”
    I’m new to investing and so requesting you to please update the data. What return can i expect as on March 2018?
    Thank you.

  125. Arpit says:

    Team:I don’t if this is the right place for this or not, but I have a feature request to make.
    So is there a way to place an order on an illiquid stock, and forget about it. The order gets cancelled at the end of the day.
    But, it would be great if the order persists. So that that stock is purchased as soon as it becomes available.
    That would be a useful addition to Kite.

    Thanks!

  126. […] having minimum 6 months your income in savings will protect your Investment […]

  127. xavier das says:

    i really want to invest but dont know how to start reading all those comments find equity is good but no idea..

    • Karthik Rangappa says:

      Read through the main content, Xavier. Also, no amount of reading will compensate the actual market experience. So go ahead and make your first investment (with an amount which is comfortable for you). Good luck and keep learning!

  128. Vedant Chanani says:

    Is, zerodha shut.

    Application not working
    Customer care not working
    Support email not replying

    Vedant chanani
    9930052883

    • balu says:

      kite zerodha not working , i have lost more then 10000. what service you giving ?

      • Karthik Rangappa says:

        Balu, unfortunately, we had a temporary connectivity issue during the day, which was later fixed. I sincerely regret any inconvenience caused due to this.

    • Karthik Rangappa says:

      Vedant, unfortunately, we had a temporary connectivity issue during the day, which was later fixed. I sincierly regret any inconvinience caused due to this.

      • Mohit says:

        Sir is this still happening in 2018, its been quite a time for your company to fix such inconvenience, how can you guys win the trust, because of your such “inconveniences” people are losing money. Don’t you have the money to buy good resources.

  129. Devendra Mishra says:

    I have recently started earning and I asked a few people about mutual funds. A colleague suggested, Zerodha should have all the answers to my financial queries. Turns out, he was not wrong. These chapters are to the point and not at all confusing. Zerodha is more like Coursera.org for financial literacy. Thanks a lot and appreciate your work.

    • Karthik Rangappa says:

      Devendra, thanks for the kind words, although we don’t have material for MFs yet. Will try and put that up soon, thanks 🙂

  130. Arpit says:

    Zerodha is pathetic.
    Every other day, there service is down.
    Customer care was unreachable.

    Busy making new customers to fool.
    Moving out of zerodha.
    Ppl should do there research, and instead of going for discount brokerage, should go for more reliable ones.
    Zerodha is 3rd biggest, but 3rd class.

    • Karthik Rangappa says:

      Arpit, please don’t say that. The service is not down every day. Y’day, unfortunately, there was an outage and we deeply regret it. Things are back to normal now.

      • Arpit says:

        Sorry, for the harsh words, but my account in particular has been facing continuous issues since some time.
        If possible see my support tickets.
        Holdings data shows 0 for avg price for atleast 3 scrips, since last 2 months. Customer care mentioned that new kite system will solve this problem.
        But it is still there, check my holdings data if possible. Check La Tim Metal. I brought this scrip from kite platform. How can the avg. price be 0 for that.

  131. Arpit says:

    I can’t post screenshot here.

  132. Ravisankar says:

    I am investing through mutual funds from last 6 years, I am thinking to start investing in Shares directly. As a first thing i have started to understand the share market through various resources, someone on Quora suggested to go through Zerodha Varsity. You guys are really awesome and keep it up.

  133. Ranjeet C says:

    Hey Karthik,
    You have done extremely good work 🙂
    I would like to give one suggestion regarding comment section – Can it be in more readable format? Means the UI like question and answers which will not include lot of space and having smaller scroll.

  134. Deepak Birajdar says:

    Hi Karthik Rangappa,
    Please give some more details about Long term capital gain (LTGC) ??

  135. Arpit says:

    Avg. Price for stocks is still zero.
    This is really frustrating, all my related support tickets are closed even before the issue is fixed.
    But the issue is not yet resolved.
    Karthik, you mentioned to check with support. But that’s not helping. And I have no other way, but to raise this here on a public forum.

    I have been reporting this issue since January.
    I request you to please look into this on priority. I have wasted a lot of time following up with your customer support. Enough of that. Let me know if it can be fixed or not, Ill stop wasting my time on this issue.

    Additionally, explain it to me, how it is OK to close the support tickets before fixing the issue.

  136. Kamlesh says:

    Your page background id offwhite and font are light gray , it makes reading very diffcult , god knows, why such odd colour combination is selected, If read u r tutorial for long my reading power glass will increase,

    • Karthik Rangappa says:

      Sorry to hear that, Kamlesh. Perhaps its the theme of your device, request you to kindly check that. The content is presented on a white background with black text.

      • KAMLESH KUMAR says:

        No my comment are about the kite application ,there the font color is very light gray , it is not black. it take lot more effort compare to other Demat account provide to read your script details.

  137. KAMLESH KUMAR says:

    people may not be complaining because their focus is more of discount broking , but as as application design the objective should be ease of application usage and user friendly mess , not technology demonstration. over all you color are very light the kind of contrast it creates make it diffcult and put lot more effort on eyes to read.
    Off cource I am also continue due to discount broking , but GUI look n feel , no it is not easy for user

    • Karthik Rangappa says:

      We have so far not received any complaint on the UI part, in fact, most of the clients seem to love it. Nevertheless, I will pass on your feedback to the team.

  138. VIJAY MISHRA says:

    grate calculation , but how we select beneficial stock .

  139. VIJAY MISHRA says:

    grate calculation ,
    but how we select beneficial stock .

  140. VIJAY MISHRA says:

    grate calculation ,

  141. Aditya says:

    Hi,

    Would like to know why standard 4% SB Account interest hasn’t been applied to calculation of “Savings without investment”. Also, what is the source of your assumption of 12% rate of return for amount that is invested. Is there a risk-free investment option that provides 12% rate of return?

    Thanks!

    • Karthik Rangappa says:

      I think the 4% SB account return gets eaten away by the inflation. Moreso, a conservative approach is always better 🙂
      12% is the average market return of any decent MF over 5-10 years period.

  142. Dr Ashok Katare says:

    Excellent effort by Zerodha towards spread of financial literacy and nation building. Keep it up… And all the best for your future services, activities and projects. Thanks a lot.

  143. Arpit says:

    NO RESPONSE FROM YOUR STUPID CUSTOMER CARE.
    AVG PRICE FOR 4 STOCKS IS 0 (ZERO). WHAT THE HELL IS WRONG WITH YOUR SYSTEM.
    6 MONTHS I AM TRYING TO GET THIS ISSUE FIXED.
    WHY CAN’T YOU FIX THIS SMALL ISSUE.
    (INTSTOIL, CILSEC, SRPML, LATIMMETAL) all are zero. Get out of business you idiots if you can’t fix this small issue even after 6 months.

    DAMN YOU ZERODHA. WHAT A LAME COMPANY YOU IDIOTS ARE RUNNING.
    Here is the complaint id with consumerhelpline.gov.in India: 803166

    • Karthik Rangappa says:

      Arpit, you have stocks which are delisted. What buy average do you expect us to show? By the way, I’m deleting all your other comments to keep this forum clean and focused towards education.

  144. Arpit says:

    Who told you that these stocks are delisted.
    Cilsec today’s volm is 6047.

  145. Lokesh says:

    Karthik/Nithin/Nikhil:

    I am having to post here as I do not have a way to escalate Zerodha support.

    My need is (at least it appears to be) very simple — I need to update my (KYC) contact details (email and phone) with Zerodha. I was forced to raise multiple tickets in the past couple of months because every time the ticket was claimed to have been resolved, I would receive an email or notification on my old contact details, which continues till date. The only response I get is that the details have been updated with Zerodha and sometimes receive a screenshot as proof of it.

    However, the fact that I continue to receive notifications (from AMCs) on my older email and phone tells me that the KYC details were never updated by Zerodha despite paying the required fees for the update. The response I received today says the following: “If you want to change your registered phone number or email address with the AMC for Coin, you have to send a letter to the RTA or the AMC” and goes on to list the 4 RTAs — to which I would need to presumably send letters — and closes the email with a “If you need further help changing your registered email address, phone no. contact the respective RTA or AMC.”

    Is this the de facto method to get this done?

    The convenience of having all the investments in one place is moot, if the communication regarding each one is spreading across multiple contact channels, especially if the older contact channels are rendered inaccessible. It is hard for me to believe that Zerodha will not participate in helping rectify the situation. While I have been satisfied with the platform(s), this little thing is turning out to be a point of great frustration and Zerodha Support has thus far proved very ineffective at helping resolve the issue.

    Would appreciate any help from you.

    Thanks!

  146. Syedzaidahmed says:

    How to add money community ?

  147. Rahul Jha says:

    Principal spelled as principle. Correct it!

  148. Shobhit says:

    Hi,

    Can you please explain what are Class A , Class B , Class E shares etc ? I have tried reading about it at various places on the internet but couldn’t understand it fully ?

  149. Manas says:

    Hey Karthik,

    Unrealted to the post but “REALLY” important.

    About the investor margin cap based on net worth/ITR, seriously worried.

    What is the likelihood of this happening according to you and the team?

    How bad are guys like me, straight out of college with no net worth/ITR, going to get f***ed?

    • Karthik Rangappa says:

      Manas, there is a lot of speculative talks around this. Some of it does not make sense, I’d suggest we wait for what SEBI has to say about this.

      • Manas says:

        Thanks for taking the time to reply,

        Many full time traders are in panic mode because of this.

        Still, the likelihood of this happening? according to you personally?

  150. Manas says:

    Can’t the brokers’ lobby do anything about this?

    I’m sure they’ll have full support of traders across the country.

  151. Pardeep Kumar says:

    What is the record of maximum CAGR in 5 to 10 years sir?

    • Karthik Rangappa says:

      Well, there is no such thing as a maximum. But if your investments can maintain a consistent 12% for a long period, then you are largely on the right track.

  152. Ashutosh says:

    Do not open any account here. It’s been 20 days since I started this process and they still don’t know why my account hasn’t been created and my “designated sales manager” knows nothing. It’s like talking to a new guy everytime I call him about the delay in the account opening process. I don’t trust them and I don’t think they’ll be helpful if you ever need help after you’ve opened your account there because if they are so lazy for such an important part of account opening then I am sure they will help you for nothing after that.

  153. Prakash Kumar says:

    I m new to investing.
    How can I invest in debt and
    Bonds issued by GOI ex- NHAI.

  154. Manas says:

    Hey Karthik,

    Back again? as you may know, no decision about the net worth thing in today’s board meet.

    The most recent hurdle in the news was brokers not wanting to verify client net worth.

    Question is, can SEBI make you guys do it, despite the unwillingness? Does it have the power?

    a ‘yes’ or ‘no’ would suffice?

  155. test says:

    karthiksirrr u are awesome sirr

  156. Manas says:

    Hey Karthik,

    2 Questions:

    1 – With increasing margin requirements for FnO for positional and MIS trades,
    BO/CO margin requirements will still be the same right?

    2 – Under what scenario will you guys have to disable BO/CO orders?

  157. Bhavana says:

    Excellent…!!! varsity …!!! is awesome …!! tq so much for all your efforts.. behind this..

  158. Hey Bro says:

    • 1 Since Intraday Trading is income as a Speculation/ Non Speculation Business, so do i require to registered or get License like Gomasta or anything ?

    • 2 Will Accounting/ Maintainence of books in Tally will work ?
    • 3 Where a small trader can learn journal entries him for fno and all?

    • Karthik Rangappa says:

      1) No, there is no special license for this
      2) I’m not sure about this, best to speak to your auditor about this
      3) Yes, why not.

      • Bro says:

        Sorry actually 3rd question was any website or any information based pdf like Varsity to learn accounting by myself ?

        And The VARSITY IS GREAT. Thanks for providing such great knowledge. I have read all Modules in around 4-6 months. Liked it alot.

        • Karthik Rangappa says:

          Thanks for the kind words!

          I’m not sure about the accounting material. If you find something good, maybe you should share it with all of us here. Thanks 🙂

  159. Abhijeet Gupta says:

    Great articles sir

  160. omi says:

    To safeguard the investor’s money, do mutual funds in India hedge their portfolio against index derivatives? Are they allowed to do by the SEBI? If they do, then why is there a free fall of NAVs of all equity-based MFs?

    • Karthik Rangappa says:

      Yes, MFs are allowed to hedge their portfolios. But please remember, hedging is an outcome of the market timing of the fund manager. In my opinion, this is the hardest thing to do.

  161. Akib says:

    Can anyone explain me the second table, calculation part in detail way?

    • Karthik Rangappa says:

      1) Yearly income – this is the amount of money you earn in a year, maybe via salary. Increases by 10% year on year
      2) Yearly expense – yearly spends, increases by 8% (y0y)
      3) Cash retained – income – expense
      4) Investment – cash retained invested in an instrument growing at 12% yoy.

  162. Anchal Agrawal says:

    I literally feel I am interested in stock market but unable to see any proper direction in it as a career. Can you please help me with the career options I can exploit in stock market field and till what extent and level I can grow my career here (basically asking top and best careers in this field) ?

    • Karthik Rangappa says:

      Anchal, I’d suggest you try and get yourself a CFA certification and look for opportunities in Asset Management companies. This is your best option. Good luck!

  163. Aaliya Maheshwari says:

    Hi Mr. Karthik! I do keep interest in Stock Market but how to know whether I am really passionate for this? Please give some words of advice as I am really confused about this and it’s my peak time going on to decide the field of my career.

    • Karthik Rangappa says:

      Asliya, there is no way I can figure out if you are really passionate about markets! However, if you really are, I’d suggest you try and get yourself a CFA certification and look for opportunities in Asset Management companies. This is your best option. Good luck!

  164. Karthick S says:

    Hi,
    Could you please eloborate “Taxation on Equity investments held for more than 365 days is taxed at 10%, if the gains are more than Rs 1 lakh starting from 1st April 2018”. My understanding is that, this will be taxed when I realize the money and not before that. Could you please confirm?

  165. Paresh says:

    Hi
    I am 33 yrs old and these are my investments:
    EPF- 1800 p.m
    PPF- 2000 p.m
    LIC – 1760 p.m
    SSY – 2000 p.m (This is Sukanya Samridhi Yojna)
    ELSS – 1500 p.m

    Almost Investing 7560 p/m in debt instruments which is for my kids higher education and marriage.
    Only 1500 p/m in equity.
    Total Investment is 9060 p/m.
    I can increase it upto 20000 p/m,This increased investment would be for my retirement corpus of 5cr and intermediate liquid requirements.

    Can you suggest me some mutual funds diversification to make a portfolio to achieve this target for retirement.

  166. Dhiraj says:

    If i want to know the amount after n years, i can also use future annuity formula to figure out the investment of retained earnings at 12% for 20 years. How do i figure out when to use CAGR or Future Annuity ?

  167. thanush says:

    First of all thanks for helping normal people and teaching them about financial literacy.
    My question is: In the after investing column, How did you calculate the Retained cash @ 12%. Im sorry if the question is basic as im trying to understand.
    Thanks

  168. Manasa Ranjan pradhan says:

    What is minimum amount to invest in equity…

  169. Manas says:

    ”With regards to F&O – most contracts are already leverage 4 to 8 times (higher in currency/commodity). That is the nature of derivative contracts. If a broker is offering leverage intraday, it would be getting blocked from his capital

    *(btw, with all the new regulations coming in, I don’t think brokers will be allowed to offer intraday leverage in F&O soon)*

    I am guessing u telling x8, x10 is basis brokers who block between 25% to 50% of overnight margin requirement for option writing for intraday trades”

    From nithin’s reply to a thread on TradingQnA, the part between the asterisks, is that true?

    Thread: https://tradingqna.com/t/discount-brokers-and-high-leverage/50864/3

  170. Anchal Agrawal says:

    Which is better option to invest for a decent earning person- PPF or SIP?

    • Karthik Rangappa says:

      Both are super long-term products, given this, I’d opt for SIP any day.

    • Arun says:

      Sir,
      PPF –
      Pros:
      -fixed income say 8.x % (varies on govt announcements slightly )
      -Income Tax Exempt, exempt, exempt
      -Safety – Central Govt
      -Loan is possible
      Cons:
      -Lock in 15 yrs( 5 yrs if urgent)

      SIP
      REturns depends on which Scrip/Stock/company u select (thorough study and invest)
      High risk /high Gain- possibilty of loosing more
      depends on Market /Economics of company and Macro
      No fixed return

  171. SIDDHANT KUNDU says:

    Isn’t forex trading also one form of investment, I felt that also could be added in the types of asset.

  172. Arun says:

    Sir,
    We can have more such mutual funds–> Debt funds, Equity,hybrid , Ncd,P2p etc in investment section apart from equity,fd, gold,silver,real estate
    Thanks

  173. Manas says:

    Hey Karthik, back again 😅

    IF the ‘brokers won’t be allowed to give additional intraday leverage for FnO’ happens, would BO/CO leverage also not be allowed?

  174. Kiran says:

    Hi Karthik,
    I see that intraday leverage for all the companies are reduced. Previously icici bank was 14 times of the amount which we have in our account. i mean if i have 1lakh, i could have used 14lakh for intraday and now its only 6.5lakh. Even yes bank was 8 times and now its only 3.5 times. Why it is reduced? is it because of sebi rules?

  175. Aditya says:

    Hey, I can’t understand how ETFs could trade at discount or premium to NAV, as if this were there the case one could make risk free money guaranteed return, assuming I could sell the ETF in pieces, as individually each share it constitutes.

    • Karthik Rangappa says:

      There is something called as ‘tracking error’, Aditya. Tracking error is the difference between the actual ETF value and the index its following. The difference arises from taxes, slippages etc.

  176. Dhiraj Chandra says:

    Why can’t zerodha make varsity available on amazon and flipkart in book format in color print version.
    There is no enjoyment in studying around 1000(around 100 pages *10 modules) pages on computer or tablet screen,If i download in PDF format and get its hard copy in color print then for 1 module price will be 100 pages*10 rupees/page=1000 rupees which is too much expensive.
    I started googling from what is share,what is stock etc,i watched many videos on YouTube to get the concept from beginning since i am a beginner ,i downloaded many books based on investment but none helped me really.I have wasted 1 year in doing so because none of the material was so systematic
    Finally I came to know about Zerodha Varsity and yes this is the material every beginners needs to get into stock market.
    As per my effort on researching the best material to learn about stock market ,i am damn sure Zerodha Varsity is the best material.
    So please make it available in color print on amazon and flipkart.

  177. Aniket says:

    how did you calculated the fixed ? can you tell the formula? I’m noob

  178. Bhashkaranand Joshi says:

    I’m new in stock market & want to invest but I want to know how is zerodha as I found many review website at paisowala or as mouthshut & another website so I need more review about Zerodha so it helps me to find the best out of it.

    Does Zerodha provide any platform where we can find a review about Zerodha, If yes Please help me?

    Thank You.

  179. SUJIT KUMAR PAL says:

    How can I choose profitable share…what should be learn to gain profit from market.

  180. Aman says:

    Can anyone here explain to me… as to why the 2nd example of investing in an ‘investment option’ starts with Rs.2,067,063/-? instead of taking it like depicted in the first example from Rs.240,000/-?
    Is the average individual supposed to first invest in FD for 20 years and then getting started with ‘Investment Options’?

    • Karthik Rangappa says:

      Rs.240,000 grows to Rs.2,067,063/ in 20 years at a growth rate of 12%. So in a sense, this is the amount of money at the end of the tenure, in this its retirement.

  181. srikanth says:

    hello karthik sir,

    i have some knowledge about stock market. but i am government employee in telangana.
    can i invest in stockmarket directly. is it legal?

  182. Manas says:

    Hey Karthik,

    Any clue when the BO leverage for Equity cash will go up back to 25x+ from the current 15x?

    Asked on tradingqna too but got vague non answers

  183. Vijayant says:

    As written if we invest in equity, it gives profit of at most 20% and if we subtract tax then net will be 10%( at most ). So taking higher risk for lower returns??

  184. Aqil says:

    Hi,

    When is the iOS app expected to release?

  185. Dhiraj Chandra says:

    Hi
    I have done my B.tech from Information Technology in 2015 and after that I was working in IT industry. From my matriculation itself I was highly passionate about stock market but because of lack of awareness about stock I continued my career as others were doing in surrounding,but now since i became aware about stock and I did trading as a client of Zerodha as well and I want to quit everything related to IT Industry and want to deep dive into stock market field only so how Zerodha can provide us opportunity to work with Zerodha.
    As I have realized Stock market is a very challenging field so if someone tries to make this as a secondary field in his career share market can’t return good to them. And Once I got into trading I don’t find any work interesting other than trading so I can’t think to continue the it job parallel.
    I am ready to compromise with my salary also since I will be a newbie in investment field.
    Only Studying Zerodha Varsity theoretically is not enough as i have realized,Environment where I want to listen see speak know do everything about markets only.
    So can you please guide me how i should proceed with Zerodha for the growth of organization and personal as well.

  186. Akshay says:

    Sir can you tell me how small case earn a profit ? This question is different from the topic I will be more happy if you answer this question

  187. Akshay says:

    when you buy a small case broker gets commission for buying the small case how small case company earn a profit by when customer buy the small case? Please answer

  188. BPS Bais says:

    In Table #2
    The Last Column named “Retained Cash Invested” is Totally Wrong.
    The Correct Value should be as follow.

    6,00,000 3,60,000 2,40,000 2,68,800
    6,60,000 3,88,800 2,71,200 3,03,744
    7,26,000 4,19,904 3,06,096 3,42,828
    7,98,600 4,53,496 3,45,104 3,86,516
    8,78,460 4,89,776 3,88,684 4,35,326
    9,66,306 5,28,958 4,37,348 4,89,830
    10,62,937 5,71,275 4,91,662 5,50,661
    11,69,230 6,16,977 5,52,254 6,18,524
    12,86,153 6,66,335 6,19,818 6,94,196
    14,14,769 7,19,642 6,95,127 7,78,542
    15,56,245 7,77,213 7,79,032 8,72,516
    17,11,870 8,39,390 8,72,480 9,77,178
    18,83,057 9,06,541 9,76,516 10,93,698
    20,71,363 9,79,065 10,92,298 12,23,374
    22,78,499 10,57,390 12,21,109 13,67,642
    25,06,349 11,41,981 13,64,368 15,28,092
    27,56,984 12,33,339 15,23,644 17,06,481
    30,32,682 13,32,006 17,00,676 19,04,757
    33,35,950 14,38,567 18,97,383 21,25,069
    36,69,545 15,53,652 21,15,893 23,69,800
    3,43,64,999 1,64,74,307 1,78,90,692 2,00,37,575

  189. Chandra says:

    I am a beginner , now i want basics knowledge to start the stock buying. can i believe it is a good start

    • Karthik Rangappa says:

      Yes, indeed. Please read through, the more you do, the more confident you’ll get to start the transactions in the market.

  190. Wahid says:

    Dear Zerodha,
    Would it be an opportunity to make the money signs just in dollars $,
    because from International view it is ease to understand. It is just a suggestion and I think it is more clearly understandble to an international audience.
    I do understand that from the perspective of Indian investors audience, is in Rs.
    But in my opinion would be more clearly for an international audience if you could explain it from the dollar perspective.

    Thank you again for the great platform that you made.
    Best regards,
    Wahid

    • Karthik Rangappa says:

      Wahid, that is a valid concern. But I think I’ve used Rs.everywhere on Varsity and would be a task to change that value now. However, I’d suggest you kindly ignore the currency here and just work with the numbers. Thanks.

  191. KARN says:

    Hello Karthik sir first of all heartily thanks to you for making this varsity for people like me who want to learn stock market. Dir my question is i want to learn technical analysis and be a good trader for that what should i do??

  192. KARN says:

    Thanks sir for guiding so sir only that module can help me to reach my goal?? After reading how to implement what you say in varsity??

  193. K Bhaskar Reddy says:

    First, I thank you Karthik Rangappa & Zerodha for your initiative to spread financial literacy through zerodha varsity that too free of cost, each and every chapter in this varsity is very use full for a beginner. I have 4 years of experience in stock market having a little bit knowledge of stocks market. I basically belong to AP state in AP many people (beginners) are trying to invest in stock market but they don’t know much about stock market and you don’t believe you will find hardly 1 book in telugu about stock market written by Mr. Kiran Kumar long days back. After reading your Zerodha Varsity chapter and examples I’m impressed. I request your highness if you allow me to use your varsity material to translate the same to my local language “Telugu” and publish in my telugu blog. Not all the content only basic knowledge data of the stocks market. And I recommend to all my viewers those who are good in English to read all the chapters from your Zerodha Varsity. I will proudly say in my blog that the content is taken from Zerodha Varsity and translated to Telugu for your better understanding.
    Waiting for a positive reply.
    Regards
    K.Bhaskar

    • Karthik Rangappa says:

      Thanks for the kind words, Bhaskar. Please feel free to translate the same, we have no issues as long as you give us some credit 🙂

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