Zerodha Doubles F&O Brokerage for Select Traders

Zerodha has announced a significant change to its pricing structure, doubling brokerage charges on select intraday derivatives (F&O) trades from ₹20 to ₹40 per order. The revised pricing will come into effect from April 1, 2026, marking a notable shift from the firm’s long-standing low-cost trading model.

The increase, however, is not applicable to all users. It will only impact traders who do not comply with the Securities and Exchange Board of India’s (SEBI) requirement of maintaining at least 50% of margin in cash. Traders who meet this rule will continue to be charged the existing brokerage, while those who do not will face the higher fee.

Previously, Zerodha used to absorb the cost of this regulatory requirement for non-compliant traders. With the new change, the brokerage is passing on this cost to users, effectively penalizing those who do not adhere to the margin norms.

The decision is largely driven by regulatory and cost pressures. SEBI’s 50% cash collateral rule has increased compliance costs for brokers, making it difficult to sustain ultra-low pricing for all customers. At the same time, derivatives trading volumes have shown signs of moderation, which has impacted revenue streams for brokerage firms.

Adding to the pressure is the rise in overall trading costs. From April 1, the Securities Transaction Tax (STT) is also set to increase, with futures tax rising from 0.02% to 0.05% and options premium tax from 0.1% to 0.15%. This means that traders will not only face higher brokerage charges but also increased statutory costs, making trading more expensive overall.

The move signals a potential shift in the discount broking industry. Zerodha has long been associated with its flat ₹20 brokerage model, which played a key role in attracting a large base of retail traders. The latest change suggests that sustaining such pricing structures may become challenging in the face of tighter regulations and rising operational costs.

There are also indications that this may not remain an isolated move. Since similar regulatory and cost pressures apply across the industry, other brokerage firms could consider revising their pricing structures as well.

For traders, especially those active in the F&O segment, the impact could be significant. Higher brokerage and tax costs may reduce overall profitability and could potentially lead to a decline in trading activity, particularly among retail participants.

In essence, the change reflects a broader structural shift in the trading ecosystem, where increasing regulatory oversight, rising costs, and evolving market dynamics are forcing brokers to recalibrate their business models.