Zerodha is India’s top Discount broker that allows its clients to trade in Equity and Commodities. Equity and commodity are two different asset classes in which you can trade as well as Invest. Know what are equity and commodities in detail.
Zerodha is India’s largest discount broker with over 3.4 million active clients. Zerodha allows its clients to trade in Equity, Commodity, and Currency. It also allows you to trade in Derivatives like Futures and Options in these asset classes.
The term ‘Equity’ means stock in any company. Equity shares are a category of shares that companies issue. Equity shares and preference shares are the two types of shares that can be traded. Zerodha allows you to trade and invest in Equity (Shares) that are listed on the NSE (National Stock Exchange) as well as BSE (Bombay Stock Exchange). These are the two exchanges from where you can buy and sell shares.
Zerodha allows you to buy shares in CNC (Cash And Carry) as well as Intraday or MIS (Margin Intraday Square off). In intraday trades, you have to square off your position within the same trading day.
Equity is usually used as an investment avenue by investors who buy and hold shares of companies. Zerodha also allows trading in Equity Derivatives such as Stock Options and Stock Futures. These are separate trading tools that Zerodha offer to its users. In derivatives, the underlying asset is not exchanged. Instead, the buyer and seller of the derivatives contract trade these on an agreement to exchange the underlying on a certain date and at a certain price.
Commodities are traded similar to equities but they are altogether different from Equity. Commodities include Gold, Silver, Aluminium, Crude Oil. These are traded in derivatives such as Futures and Options. These cannot be bought and stored in your Demat for the long term. As every derivatives contract has an expiry date on which the holder of the contract has to take or give delivery of the underlying. Unlike Equities, these are used for mostly speculation purposes by traders.
In Zerodha you can trade in commodities in Intraday (MIS) or take overnight positions using (NRML) orders. These commodities are traded on the MCX (Multi Commodity Exchange). Zerodha is a member of the MCX hence the users of Zerodha can easily trade in commodities.
To start trading in Commodities you have to enable the commodities segment in Zerodha which costs Rs 100. This can be either done at the time of account opening or at any given point in time. Some documents like Income proof are to be submitted while requesting the Commodities segment.
Zerodha offers both Equity and Commodities trading to its clients. The brokerage charges for trading in commodities are also reasonable at Rs 20 per order. To activate the Derivatives and Commodities segment you need to submit some documents in order to verify your income and risk-taking capacity. Some of these documents include ITR, Salary Slip, Form16, Demat Holding statement, etc. Once you submit any one of the following, you can trade in Equity and commodities.