Comment on Online pledging of stocks for trading F&O
commented on
07 Sep 2016, 03:53 PM
1. It is like a pool. Yes exchanges know individual client margin, positions, holdings etc.
2/3. The capital deployed for funding the shortfall is less than 10% of Zerodha’s own liquidity. So it is a very small portion. Also as you know we allow positions only if there is atleast 50% in collateral (after haircut which is quite high on Indian exchanges). So the risk is extremely low, and even if something were to go wrong, it is just a fraction of Zerodha’s personal funds being used.
Of course we distinguish between high and low risk guys. You don’t get to see it in the front end, but our risk team at every point knows who is highest risk on the system. We are one of the few brokers in India who auto square off positions if risk goes beyond what we are comfortable with. We don’t make a phone call etc, we send a SMS and square off.
We are privately held, can’t share detailed financials. I have publicly spoken about our revenue and profitability.