Understanding Zerodha's Fee Structure for GTT Orders

Zerodha and GTT Orders: An Overview

In recent updates, Zerodha has made it clear that their Good Till Triggered (GTT) orders do not incur any additional charges. However, this comes with important details regarding the fee structure and some introductory offers that clients should be aware of.

Free GTT Orders with Introductory Offers

Introductory Offer: Zerodha has launched a three-month introductory offer where no charges are levied on GTT orders. This offer applies to all clients and is a great way to test the benefits of using GTT orders without any financial commitment.

Flexibility for Future: During the introductory period and even after it ends, Zerodha retains the discretion to decide on pricing and brokerage fees for these orders. This means that while current users enjoy cost-free GTT orders, the future fee structure may vary based on the company's discretion.

Entirely Free GTT Usage

Zerodha declares that GTT orders are completely free to use. This means that setting up and maintaining GTTs does not involve any additional costs, making it a cost-effective solution for traders and investors. However, it is important to note that other regular brokerage fees and applicable charges may still apply when an order is executed.

Key Features of GTT Orders

Margins: You do not need to have any cash or margin available in your account to create a GTT order. The system will only check for margins when the GTT is triggered and an order needs to be placed on the exchange. You will only need to ensure that you have the necessary margin available at the time of trigger.

A GTT order is valid for one year. If it is not triggered within this period, the GTT will be cancelled automatically. You will need to place a new GTT order if you still require its services. Additionally, a GTT trigger is valid only once, meaning that if an order is not filled due to any reason, you must re-trigger the order manually.

Corporate Actions: GTT orders for specific stocks may be cancelled due to corporate actions such as bonus shares, dividends, or splits. Zerodha cancels these GTTs to ensure that orders are not triggered due to volatility caused by these actions. In such cases, you will need to re-trigger the GTT manually after the corporate action is completed.

Important Considerations

Guarantee of Execution: When a GTT is triggered and an order is placed on the exchange, it is only executed if the limit price of the order is filled. To be guaranteed of execution, it is recommended to set your limit price higher than the trigger price for buy GTT orders (acting like a market order with a limit set) and lower than the sell trigger price for sell GTT orders. The further away from the trigger, the more likely the execution is to be guaranteed.

All Orders Will Be Triggered: The system will ensure that your orders are triggered as per the GTT conditions. However, it is crucial to understand that the final execution depends on market conditions and available liquidity.

Conclusion: Zerodha's commitment to providing cost-free GTT orders is a significant advantage for traders and investors. While users enjoy these benefits, it is important to be aware of the terms and conditions associated with setting up and using GTT orders. Always refer to Zerodha's official website or contact their customer support for the most up-to-date and accurate information.