{"id":445190,"date":"2026-03-27T11:12:48","date_gmt":"2026-03-27T05:42:48","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=445190"},"modified":"2026-03-27T11:48:39","modified_gmt":"2026-03-27T06:18:39","slug":"clatification-on-additional-brokerage-fno-trades","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/general\/clatification-on-additional-brokerage-fno-trades","title":{"rendered":"Clarification on additional brokerage for F&O trades"},"content":{"rendered":"

Additional \u20b920 charge is only for traders using collateral margin without the required cash and only if the shortfall exceeds \u20b95 lakhs.<\/p>\n

No, the brokerage for F&O at Zerodha has not gone up to \u20b940. It remains at \u20b920 per order. The only change is an additional \u20b920 per order for customers who trade on collateral margin (by pledging stocks) without maintaining at least 50% of the required margin in cash or cash equivalents, and only if the cash shortfall exceeds \u20b95 lakhs. Fewer than 10,000 of our tens of lakhs of active F&O traders are affected, and even they can avoid it by keeping enough cash in their account.<\/p>\n

For the full context behind this change, read on.<\/p>\n

What is collateral margin?<\/h2>\n

When you take an F&O position, you need to maintain SPAN & exposure margins or pay the option premium. Most traders fund this with cash. But you can also pledge securities to get collateral margin against them. If you hold a stock worth \u20b9100 and pledge it, you get \u20b9100 minus the Value at Risk (VaR) haircut as collateral. At a 10% VaR, that’s \u20b990 in usable margin.<\/p>\n

You can pledge two types of securities: cash equivalents (government securities, liquid\/debt mutual funds, and ETFs) and non-cash securities (stocks and equity mutual funds). Margins from cash equivalents are treated as cash by the Clearing Corporation (CC). Margins from non-cash securities are not. That distinction is what this entire post is about. You can check the list of securities that can be pledged here<\/a>.<\/p>\n

The 50-50 rule<\/h2>\n

Regulations require at least 50% of the margin for any F&O position to be in cash or cash equivalents. The rest can come from non-cash collateral.<\/p>\n

Say you want to buy 1 lot of Nifty Futures, which needs roughly \u20b91,80,000 in total margin (SPAN + exposure). You need at least \u20b990,000 in cash or cash equivalents; the remaining \u20b990,000 can come from pledged stocks.<\/p>\n

Now, if you only have pledged stocks and no cash, you are not meeting the 50-50 requirement. We still let you take the trade, but the CC requires the broker to cover the cash shortfall from its own funds. So we would be blocking \u20b990,000 of our capital with the CC on your behalf, for as long as the position is open.<\/p>\n

In 2022, when SEBI introduced the regulation on segregation of client collateral, we had written about how this would increase working capital requirements for brokers<\/a>. The 50-50 rule is a big part of that. Every time a client uses non-cash collateral without the required cash component, the broker funds the gap from its own capital.<\/p>\n

What we have been doing until now?<\/h2>\n

Until now, we have not charged anything for intraday cash shortfalls against the 50-50 requirement, even though our capital stays blocked with the CC during that time. We are the only major broker that hasn’t. Industry-wide, brokers charge interest between 7% and 18% per annum on such shortfalls. We do charge a nominal 0.035% per day (roughly 12.7% per annum) on overnight shortfalls, but intraday has been free.<\/p>\n

In 2023, we introduced an additional brokerage for margin overutilisation, but only for accounts that went into a negative balance, typically from hedge breaks where the shortfall left no cash or collateral cover at all. We did not extend it to regular non-cash collateral shortfalls.<\/p>\n

As collateral usage has grown, so has intraday utilisation of our funds to cover the 50-50 gap. We want to nudge traders towards maintaining the ratio themselves. It is the regulatory intent, and it reduces our capital exposure.<\/p>\n

The new charge from April 1, 2026<\/h2>\n

From April 1, 2026, orders placed when the 50-50 ratio is not being maintained will attract an additional \u20b920 per order, but only if the cash shortfall exceeds \u20b95 lakhs. Below that, nothing changes. The vast majority of our clients are unaffected.<\/p>\n

To put this in perspective: most brokers would charge interest on the shortfall. At 12% per annum, the interest cost on a \u20b920 lakh shortfall is about \u20b9650 per day. \u20b920 per order is a fraction of that. We could have gone the percentage-fee route, too, but chose not to because the cost to the customer would have been much higher.<\/p>\n

You can check your 50-50 status at any time on the Kite Funds page. If the “Available Cash” field is negative, you are not maintaining the ratio, and this charge would apply once the shortfall crosses \u20b95 lakhs.<\/p>\n

For traders who prefer to keep cash deployed elsewhere and use stock collateral for F&O, this is a small cost. For those willing to maintain even a portion of the required cash, it is easy to avoid entirely.<\/p>\n","protected":false},"excerpt":{"rendered":"

Additional \u20b920 charge is only for traders using collateral margin without the required cash and only if the shortfall exceeds \u20b95 lakhs. No, the brokerage for F&O at Zerodha has not gone up to \u20b940. It remains at \u20b920 per order. The only change is an additional \u20b920 per order for customers who trade on […]<\/p>\n","protected":false},"author":176551,"featured_media":445202,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[577,531],"tags":[],"class_list":["post-445190","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-updates","category-general"],"yoast_head":"\nClarification on additional brokerage for F&O trades – Z-Connect by Zerodha<\/title>\n<meta name=\"description\" content=\"Additional \u20b920 charge is only for traders using collateral margin without the required cash and only if the shortfall exceeds \u20b95 lakhs. 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