According to reports from The Economic Times, Zerodha has revised its brokerage plan, now applying higher charges only to traders whose shortfall in the cash collateral margin requirement exceeds ₹5 lakh, easing an earlier decision to raise trading charges for all clients unable to comply with the norm. The revised fee structure, effective April 1, 2026, will impact less than 1% of its active equity derivative client base, as clarified to clients on Friday. The original fee hike had doubled brokerage rates to ₹40 per order for all derivatives traders failing to maintain at least 50% of collateral in cash or cash equivalents on an intraday basis. As reported by The Economic Times, fewer than 10,000 of the platform's tens of lakhs of active F&O traders will be affected, and even those affected can avoid the higher fee by maintaining sufficient cash in their accounts.
As reported by The Economic Times, SEBI regulations require at least 50% of margin collateral for any F&O position to be in cash or cash equivalents, with the remaining portion allowed from non-cash collateral. Cash equivalents include cash, bank guarantees, fixed deposit receipts, and approved securities. To initiate an F&O trade, clients must bring in margin, which can be either cash or pledged securities like stocks. When stocks are pledged, the usable margin is usually after a haircut. As rules do not permit trades done on pledged stocks alone, brokers have so far stepped in and put up their own money to cover the shortfall with the clearing corporation. According to Zerodha's CEO Nithin Kamath, quoted by The Economic Times, "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 explained that the latest fee hike is intended to nudge traders towards maintaining the ratio themselves, in line with regulatory intent, while also helping Zerodha reduce its capital exposure.
According to The Economic Times, Zerodha's 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. Zerodha stated that it could have gone the percentage-fee route but chose not to because the cost to the customer would have been much higher. The pricing increase comes as derivatives volumes are under pressure from the proposed Securities Transaction Tax (STT) hike from April 1, with the government proposing to raise STT on futures to 0.05% from 0.02% and on options premiums to 0.15% from 0.10% in the Union Budget 2026.
As reported by The Economic Times, the higher fee will not apply to intraday trades in equities. Zerodha's CEO Nithin Kamath highlighted that "the amount of collateral that people have kept with us, on which they take margin to trade, has gone up like bonkers." He added that "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 fee hike represents a significant change for Zerodha, which popularised the zero-brokerage model in India, as it affects only a small fraction of its active F&O trading community while maintaining the zero-brokerage structure for the majority of its user base. The revised approach addresses trader concerns about industry-wide fee increases while maintaining regulatory compliance.
