Thread by @theBuoyantMan

Zerodha fucks up at the most unfortunate moments that many people end up with huge losses. I have been seeing this since 2017 ever since I signed up with @zerodhaonline
@Nithin0dha also has a funny way of justifying things.

This will be a #thread on brokers for #Trading.

I signed up with Zerodha in Jan 2017. Ever since then, high volatility days, days when ppl can make good profits or huge losses depending on minutes difference of action, they almost ALWAYS find a way to mess up - prevent logins, bad gateway, charts won't load, no price refresh

Zerodha is a self proclaimed, billion-dollar valued (private valuations are a joke, take it with a pinch of salt), most importantly PROFITABLE company. Sure they did change the landscape of brokerage as a business and has brought down costs. Good for everyone.

For those who don't know, Zerodha is a ditto-copy of @Robinhood. I have to give hands down - Zerodha Kite has the best User Experience among brokers EVER. No other broker even comes close.

The first time I started noticing glitches in Zerodha was in 2017 - around august. I wasn't allowed to come out of a position that was going into loss, wasn't allowed to sell for 15 mins, and by the time I could, I'd lost close to 10k.

I decided I'd keep only long term investments on Zerodha and not use it for trading then and there. I asked zerodha to give me NSE NOW terminal - and wow. It was nimble, fast, no lag - and seeing kite price updates lag behind NSE NOW was an eye opener.

I learnt about price lags, latency, etc., from that point. Two three times more such instances happened while trying to buy/sell stocks, buy/sell index futures/options during high volatility days. Decided to not use Zerodha for any purpose as much as possible. Liquidated evrythng

Then I have moved to Fyers, from Fyers to Finvasia and now Interactive Brokers. Right now I have Finvasia and Interactive Brokers. NEST for Finvasia works pretty well, and zero brokerage doesn't hurt. Interactive brokers - the best hands down.

Nithin may call it all conspiracy theories that Zerodha fucks up during high volatility days, but are you saying that a multi-billion dollar valued company making multi-million dollar profit can't take care of their core tech and execution infrastructure?

A bunch of baloney I'd say if he says technical issues arise at times and that they can't promise 100% reliability or availability or whatever. I have been using IBKR for three months now. It's fucked up ZERO times. Jet speed, nimble, fastest price quotes and 0dha lags like hell.

How can IBKR - which is a broker having access to 90+ exchanges, serving so many hedge funds, HNI clients, etc., - equally multi-billion dollar valuation, multi-million dollar profits - make sure of such robust architecture & infrastructure and Zerodha can't?

Now whether Zerodha is trading against client positions, or selling order flow, or selling data of the users, or whatever theories there are - don't care about those. They are definitely doing something shady - coz technical issues would have to have some randomness.

How come they fuck up during high volatility? That too, pretty damn consistently? Well, that's a question to ponder. That said, I urge you all to consider one thing. The money you save in brokerage, you will lose in fuck ups like this. Period.

So, what should one do?

1. If you have a capital size of < 10L, sign up with Interactive Brokers (the only good broker I know) - you have no business using excess leverage, first build your account without any leverage (other than exchange guided margins).

2. Sign up with a back up broker - smaller size maybe - with Finvasia or Fyers. They are both pretty good. Fyers fucks up too, but not as vigorously and not as frequently as Zerodha. Finvasia wise, your only issue is whatever issue would be there with NEST software.

3. Don't keep idle cash with broker. Always have a liquid fund of sorts all your idle cash. If broker goes bust, you won't be sucking thumb waiting for SEBI to get you your money back after 4 years.

4. If your capital size is >10L and you trade with good leverage, and you have been pretty consistent - open an account with a full service broker like ICICI or Sharekhan/IIFL and negotiate brokerage structure with them. Renegotiate every month. Be in good terms with your RM.

5. I personally know many friends of mine who have account with Kotak Securities and Sharekhan having way better commission structure than Zerodha or Finvasia. Capital matters. Turnover matters. So, do that. And get a backup account with whatever discount broker you're comfy with

6. Don't take shit from brokers. Broker's business runs because of people like you. There's no free lunch. If you aren't being sold anything, you are what's being sold. So, if a broker doesn't fulfill its primary duty - giving best execution, ruthlessly cut ties with them.

7. Also, be extra cautious with any broker - and whenever a technical issue happens and you happen to lose money, you can file a case against the broker with SEBI/NSE and many have won the case and gotten their rightful money that they lost due to broker fuck up.

8. Better to trade with screen recording on for the entire trading session, and if nothing happens - delete the recording at the end of the day or use for journaling purpose. File against them with evidence if things go south coz of no mistake of yours. Same with phone recordings

9. If you can't execute on pi or kite, and you're calling them, record the call completely - these are evidences against them. A lot of people have contested and won. So, keep that in mind and don't just let them get away with it.

10. Same goes for any other broker. Last week I heard Upstox wasn't even letting people login let alone close their positions. This is insanely stupid fuck up for a company that boasts of being backed by @RNTata2000. Just remove all your cash and go to some other broker.

11. To conclude, don't be penny wise and pound foolish. Don't go on pinching pennys on a bullet train track with train coming in front of you. These broker fuck ups will suck your account dry if you're not careful, especially if you also take the huge leverage they give.