Zerodha Chief Executive Nitin Kamath today said one of the reasons behind launching the online brokerage company in 2010 was market regulator SEBI’s plan to introduce margin reporting and short margin penalty.
This was being introduced for not collecting enough margin for overnight futures and options (F&O) positions after the market collapse in 2008, he said.
The CEO of Zerodha, who regularly shares his insights on the market and related trends, said that NSE started F&O in 2000 and is today the world’s largest derivatives exchange by volume. “Trading activity was mostly in futures until 2008. Options only became popular after contract sizes and margins increased,” he said.
He also said that Zerodha was started with the idea that it could disrupt the market by offering high leverage and taking on high risk. “That’s why we launched a flat fee pricing model (of.) 20 per executed order in 2010) for the first time in India,” he said.
Nitin Kamath started back in 2010 with his brother Nikhil Kamath. It was the first online brokerage to introduce a disruptive pricing model and in-house technology. As of today, Zerodha serves over 8+ million customers every day through its investment platforms, contributing to over 15 per cent of all Indian retail trading volumes.
Nitin Kamath had said on Friday that he noticed a “strange” trend in the stock market. “Even though high-growth listings are seeing a sharp decline in profitable startups, private market valuations remain the same,” Kamath said.
“Weird times we live in. BTW if there was a way for smaller private companies, I think there are some pair trades—listed privates and buys,” he said. Along with this, Kamath shared a chart that shows the performance of Fintech IPOs.
Read also: ‘Strange timing’: Zerodha CEO Kamat on sharp drop in startups’ stock prices
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