The fee has been increased to Rs 40 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 Rs 5 lakh, Zerodha said. It added that fewer than 10,000 of its tens of lakhs of active F&O traders will be affected, and even they can avoid the higher fee by maintaining sufficient cash in their accounts.Zerodha explained that SEBI rules require at least 50% of the margin for any F&O position to be in cash or cash equivalents. The remaining portion can come from non-cash collateral.
Many investors often hold only pledged stocks and no cash, thereby failing to meet 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 ₹90,000 of our capital with the CC on your behalf for as long as the position is open,” the company said, adding that the latest fee hike is intended to nudge traders towards maintaining the ratio themselves, in line with regulatory intent. This will also help Zerodha reduce its capital exposure.
The brokerage firm highlighted that its peers charge interest between 7% and 18% per annum for covering such shortfalls. “At 12% per annum, the interest cost on a ₹20 lakh shortfall is about ₹650 per day. ₹20 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,” it said.
The higher fee will be effective from April 1. It will not apply to intraday trades in equities.
“The amount of collateral that people have kept with us, on which they take margin to trade, has gone up like bonkers,” Zerodha’s chief executive officer Nithin Kamath wrote on the firm’s website. “We are at a point where we might have to borrow funds in the near future to provide collateral for you all. Borrowed funds come at a cost.”
The pricing increase by Zerodha, which popularised the zero-brokerage model in India, comes as derivatives volumes are under pressure from the proposed Securities Transaction Tax (STT) hike from April 1. In the Union Budget 2026, the government proposed raising STT on futures to 0.05% from 0.02%, and on options premiums to 0.15% from 0.10%.(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of The Economic Times.)