What are Clearing Charges and are There Any at Zerodha?

Last Updated: Mar 20, 2024 Value Broking 1 Mins 1.9K

Traders pay a fee to a clearing agency to settle their trades. This process happens after the trade and determines what the broker owes in funds and securities, which then gets paid with the exchanges. This makes it easy for trades to be completed between the broker and exchanges.

Brokers have two options for clearing trades – either they can remove trades themselves or assign the task to a Professional Clearing Member (PCM). Zerodha is a self-clearing member, which means it doesn’t charge any clearing fees from its customers. Brokers who use third-party clearing members to clear the trades charge anywhere between ₹200 to ₹2,000 per crore, which is equivalent to 0.002% to 0.02% of the option premium.

If you’re buying and selling Nifty options frequently during a single session at a premium of ₹100, your total premium turnover would be ₹15 lakhs. However, if you use brokers who require third-party clearing members, you may have to pay additional clearing charges, which could be anywhere from ₹30 to ₹300.