Zerodha Open Trade has been Shut-down by the broker and no new subscriptions are being allowed. The existing ones have been provided with respective refunds!
Zerodha Open Trade Review
Zerodha Open Trade is one of its own kind of a solution, meant for users who seek regular advisory from a research house. Generally, such users have a couple of options to choose from:
Use trading services from a full-service stockbroker and get access to their technical and fundamental reports. Problem with that set up is that clients are required to shell out high brokerage charges, generally a percentage rate based on your trading capital value.
Another concern with that approach is that few full-service stockbrokers provide such tips to their clients irrespective of the fact whether they provide any value to the client or not. By doing this, they end up generating brokerage for themselves. In other words, its a case of conflict of interest.
Otherwise, users can take help of professional advisory service companies. In their case, the accuracy of tips or research may or may not work for you. Thus, users end up spending huge advisory costs on a monthly basis with no surety of turning profits for themselves.
So, this is where a service such as Zerodha Open Trade comes into play. What it basically offers is pretty simple. In today’s online socially connect the world, Open Trade poses itself as a platform where beginners or small investors can follow heavy traders or experts.
These heavy traders or experts have listed on the platform anonymously with details on:
the kind of return percentages they have made
number of users currently following them
The average capital amount they play with
favourite trading segments, stocks, industries
number of trades placed every day
Furthermore, you also get details on the recent profits and losses made by the respective star to give you an actual idea about the performance for a specific duration. Here is a quick glance:
Following an expert (or a Star) is exactly the way you follow somebody on Facebook, Twitter or any social media account. The only difference being is that at Zerodha Open Trade, you get charged to follow a trader of your choice. But once you go ahead and do that, you get complete access to the trades placed by these heavy traders on a real-time basis.
As a follower, you get notifications via email and SMS that the Star(s) you follow, has placed a particular trade and you may choose to place a similar trade as well.
At the end of the day, it is your choice whether you want to place the trade like the one done by the Star you follow. In other words, the discretion of placing the trade stays with you.
Zerodha Open Trade: How are Stars Selected?
There is a specific criterion that the discount broker has set up in order to select traders as Zerodha Stars. Here are the details:
Clients trading through Zerodha with positive growth rates may apply to be Star at the platform
Zerodha goes through the profile of the client, understand the trading pattern and kind of growth percentage seen by the applicant
Depending on the trading behaviour of the applicant, the profile is tagged as Investor, Swing trader and so on.
Personal details of the clients are kept anonymous and just the information about his/her trading is displayed.
Zerodha Open Trade Charges
In order to follow a particular Star at Open Trade, you would need to pay ₹500 to buy 1 Credit which is basically the currency used for following stars. Once you start following a particular star, that credit stays valid for 1 month. There are few packs with 5 Credits availability as well that cost relatively less and these credits can be used anytime and are valid for lifetime.
Only when you start following a particular Star, the 1-month clock starts ticking.
Furthermore, Zerodha shares a decent chunk (50%) of that money with the Stars open for following on the system. Thus, there is an incentive for users to perform well, first and then register themselves as stars. If selected, they have a potential chance to earn additional revenue on a regular basis.
Zerodha Open Trade Risks
Users following Stars at Zerodha Open Trade need to be circumspect of different factors such as:
Thorough research must be done before narrowing down onto one or more Stars at the platform one is looking to follow, especially whether the risk appetite of the user matches with the appetite of the Star.
Traders they follow, also see downslides in their day to day trading, thus, users need to be consistent in whomsoever they have selected to follow.
Relatively a new concept in the Equity market in India. Will take some time to gain maturity and prominence.
Zerodha Open Trade Advantages
At the same time, here are some of the benefits you should be aware of:
With busy schedules, users do not need to go through any research themselves and can rely on the trading decisions made by heavy traders and experts.
The risk level with this technique is relatively low, simply because the trader(s) one is following has also put up his/her money at risk, unlike the research experts who are making wins theoretically.
Zerodha Open Trade is relatively cheaper in nature.
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