Zerodha CEO Nithin Kamath Confirms No Changes In Brokerage Fees, Announces Free Equity Delivery; Check

Zerodha, India's largest brokerage firm, has announced that there will be no changes to its equity delivery charges, continuing to offer this service free of cost. However, starting October 1, 2024, notable adjustments will be implemented in the charges for options and futures trading, reflecting broader changes in the Indian stock market as the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) update their transaction fee structures.

Changes in Options and Futures Trading Charges

For options trading, the Securities Transaction Tax (STT) has increased from 0.0625% to 0.1%. Simultaneously, the transaction charge has decreased from 0.0495% to 0.035%. Zerodha CEO Nithin Kamath highlighted this adjustment, stating, "Currently, we are not making any changes to our brokerage. For options, the STT has increased to 0.1% from 0.0625%, while the transaction charge has decreased to 0.035% from 0.0495%."

He further explained that this results in a net increase of 0.02303%, or Rs 2,303 per crore of premium on the NSE, and 0.0205%, or Rs 2,050 per crore on the BSE. Kamath's clarification provides a clear picture of how these changes will affect options traders, showing a slightly higher cost despite the reduction in transaction charges.

For futures trading, the STT has increased from 0.0125% to 0.02%, and the transaction charge has seen a minor decrease from 0.00183% to 0.00173%. Kamath elaborated, "This leads to a net increase of 0.00735%, or Rs 735 per crore of futures turnover." He emphasized that since STT applies to the entire contract value for futures, the impact on futures traders will be more significant than on those dealing in options.

Broader Changes in the Stock Market Effective October 1

The Indian stock markets are undergoing several significant changes, as both the NSE and BSE implement new transaction fee structures that impact multiple segments.

Increase in STT for F&O Traders

Starting October 1, 2024, the Securities Transaction Tax (STT) for futures and options (F&O) has been raised. The STT on the sale of options has gone up from 0.0625% to 0.1% of the premium, while the STT on the sale of futures has increased from 0.0125% to 0.02% of the trade price. These changes mean that F&O traders will see an increase in trading costs.

Standardised Transaction Fees for Brokers

From October 1, the NSE and BSE introduced standardized transaction fee structures for brokers in the cash and derivatives segments. This move is expected to bring more transparency and uniformity in trading costs across different market segments.

In the cash market, the NSE will now charge a transaction fee of Rs 2.97 per lakh of traded value on each side. This fee structure will impact all traders operating within the cash market segment.

For equity futures, the transaction fee has been set at Rs 1.73 per lakh on each side. Equity options trading will incur a transaction fee of Rs 35.03 per lakh of premium value. These adjustments aim to standardize costs for trading.

The changes in STT and transaction fees indicate a significant shift in trading costs for both retail and institutional investors. Options traders will now pay slightly more due to the increased STT, while the reduction in transaction charges provides some relief. Futures traders, on the other hand, will experience a greater impact due to the higher STT applied to the entire contract value.