Overtrading? Nithin Kamath unveils 'virtual contract note' on Zerodha that shows charges of all orders in market hours

Low brokerage costs can prompt investors to invest more and in stock markets, the more you trade, there is a higher probability that you may lose money. While how much brokerage investors pay is limited for each order, other charges like STT, exchange transaction charges, stamp duty, impact costs, etc., are levied as a percentage of the turnover and these can rise exponentially with more trades.

"Overtrading is one of the biggest reasons why traders lose money. It might sound weird coming from me, but low brokerage costs can trigger people to trade more," said Nithin Kamath.

Zerodha has launched a virtual contract note that Kamath hopes will likely act as a deterrent.



Markets regulator Sebi has recently mandated all brokers to start displaying charges while placing an order, helping traders and investors get an estimate of the charges they will be paying upfront. While this is helpful for someone placing fewer orders, for those who trade throughout the day, it isn’t that handy as the charges appear to be only for that one particular order.

Investors will get to know the charges for all orders placed during the day only in the contract note at the end of the day. For habitual traders, the best way to give an estimate of all charges is to show them for all the orders placed during market hours itself.

The virtual contract note precisely does this by showing investors charges for all the orders they have placed during the day. Investors can check the virtual contract note in the Orders tab on Kite web. This provides the details of brokerage, STT, exchange transaction charges, stamp duty, Sebi turnover charge, and GST for orders placed during the day, along with order-wise charges.

The feature is currently live only on the web and will soon be available on the app as well.

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