The Zerodha Universe [2020]

The Zerodha Universe

As I mentioned in my article ‘How did I automate my finance activities?’, I use Zerodha for almost all my investment needs. I have been wanting to write about this platform. I’ve been fascinated by this company and how quickly they’ve grown and added these features over time. Most important of all, almost all of them are either free or very affordable. Interestingly enough, they don’t advertise. It is word of mouth (and published word, such as this) that enabled them to grow to what they are today. Grown big enough to become the biggest stockbroker in India by a huge margin!

Note that this is NOT a solicited article. I’m not getting paid to write this. I just wanted to introduce Zerodha to those who aren’t aware of all the features it provides. The following is a summary of all the different features that Zerodha and associated affiliates provide. Some of the following does not come directly under Zerodha’s umbrella, but Zerodha’s login can be directly used to create and manage your account there.

The ‘Zerodha Universe’ can be mapped across most of the needs of a personal finance management lifecycle:

Education

• Rupee Tales: If you want to instill a habit, teach them when they are young. That seems to the inspiration behind creating this. Rupee Tales is a set of 5 books that introduces 5 different financial concepts — Savings, Banking & Inflation, Taxation, Insurance, Stock Markets … wait for it … in a comic book format. Affordable enough to buy a box set for your children. I don’t know how is it. I haven’t read it. But reviews online seem to be good.
• Varsity: Rupee Tales is created by Varsity itself. While Rupee Tales focuses on kids, Varsity is reading material for adults. This platform has 12 modules with hundreds of chapters covering topics like stock markets, fundamental and technical analyses, F&O strategies, trading, personal finance, etc. Not only do these chapters have a very easy to understand and conceptually fundamental coverage of topics, but it also has a very rich comment section where people clear their doubts. For someone new to the world of personal finance, this is a fantastic first resource. And it is free!
• LearnApp : Varsity covered basics of finance. Format = Textual. LearnApp hosts video lecture courses on trading, investing, financial services, business, etc. These video courses are created by market professionals such as startup founders, ex-bankers from top banks, MF asset managers, traders, CXOs of top companies, etc. Other than these curated courses, it also hosts live (and recorded) classes. LearnApp, unlike Varsity, is not a free resource. It follows a subscription model and you can buy it for quarterly or annual access. I had a chance to review some of the courses during the free access period. It seems good. By the way, Zerodha has a podcast too, that is hosted by the founder of LearnApp. You can find it here

Investment

• Kite : Ok. Education is done. Now, what about the application? KITE is the main platform from Zerodha from where you invest in stocks, review your holdings. That’s about it. Zerodha has provided many interesting features in KITE. Right now, they are in their third version (3.0). For example, GTT enables you to set a price-based trigger on stocks, either to buy or sell. And guess what? This trigger is applicable for up to a year. This gives me fantastic leverage to automate the actions I want to take on my stocks. If that trigger condition is met, the execution happens automatically and you are not asked. I’m not too active in the stock market directly. So, this helps. Moreover, there is a concept of Baskets. Baskets are a group of scripts that can be connected to a trigger for action as well. The best thing(s) about KITE is the interconnectedness with the other products from Zerodha. From the scripts, you can review the fundamental and technical analyses, key financial ratios, and, last but not the least, fantastic charting abilities with a lot of functionalities!
• Coin: What KITE is to stocks, COIN is to Mutual Funds. And other things. COIN started as a platform, where you could buy regular Mutual Funds. They soon changed to catering only to the direct funds. I, personally, to stop my SIPs in regular MFs and switch to direct counterparts to take advantage of those extra percentages. I have, by now, sold all those regular mutual funds with long capital gains. You can set SIPs, either based on time or price trigger based. COIN soon added the functionality to buy Government Securities, and PSU and corporate bonds as well. Fun fact: You can also invest in ELSS and it creates a separate report that can be submitted as proof of investment. Most of my investment is through mutual funds and I use this to the fullest.
• Smallcase: KITE is for individual stocks. COIN is for mutual funds i.e. an amalgamation of stocks. Someone thought that there is an unmet need somewhere in the middle of it. That someone is Smallcase. I don’t know where the idea came to them from, but Smallcase has these highly thematic bunch of stocks, that you can buy as a package. While some of these themes can be sector-based, they can also be based on a certain investment guiding principle, such as Smart Beta, Magic Formula, etc. There’s a weighted mix of stocks bucketed under a ‘smallcase’. You buy one smallcase for Rs. 100. After that, you can buy more of that as many times as you want for free. What you buy becomes visible on KITE website. Interesting idea. I tried it initially but sold later on. This product is for those people who are not too much into stocks but want a well thought out stock portfolio. So, they can come here and subscribe to a theme or thought process per their conviction.
• GoldenPI : This is a relatively newer platform. I haven’t used it much, but you can buy corporate bonds from here. Maybe I’ll try it out later in my life, but, for me, currently, the minimum investment is way too high for most of the options.

Trading

• Sensibull: From investing to that of trading. Sensibull is an Options Trading Platform. I cannot help you much here since I’m not much of a trader, but for traders, this might be a very good option (pun!). But, if you are a person like me, but interested in learning about trading, sensibull have tutorials for you to learn, ‘Easy Option’ for you get started with baby steps, and try virtual trades for practice without any real money. They also have a strategy builder that enables you to create strategies.

Automations

• KITE Connect API: KITE APIs are brought to you by Zerodha that ‘lets you execute orders in real-time (equities, commodities, mutual funds), manage user portfolios, stream live market data over WebSockets, and more’. There are libraries and support for Python, Go, JAVA, PHP, Node.js, .Net / C#, Rust, and R. Maybe they’ll add more later. But, in my personal view, the charge is quite high. For retailers, it is Rs. 2000. If you want a historical API add-on, that would be another Rs. 2000, please! However, for startups working on mass-retail products, it is FREE! I mean why?! I would’ve loved to get access to API with a more adaptive charging scheme so that I can experiment and practice around with a few things. Some day, I guess.
• Sentinel: Sentinel was there before GTT came into being in KITE. So, understand its value from that perspective. Sentinel “creates powerful market alerts on the cloud for stocks, futures, and options”. You can apply your alert on one of many aspects of price/volume movement for the stock. Those are basic triggers. You can also create advanced triggers. Once you activate these triggers, you can configure it to pop up an alert in email or KITE app. And all of this is for free!
• Streak: This is a platform where you can create, backtest, and deploy trading strategies. They are calling themselves a ‘world’s first retail trading platform’. Maybe it is true. I don’t know. I don’t actively trade, so I would ask you to check it out yourself. This is a paid application that allows you to create trading strategies, backtest them for performance, and then deploy for automated trading. It is on its third version (3.0) where it claims to have 70+ technical indicators that you can use to create millions of unique algorithms for trading. It gives you a 7-day trial period.

News and Updates

• Z-Connect: Z-Connect is a blog for Zerodha. They publish/share articles on the latest feature that they launch (which is often). They also share their general accomplishment, any government regulation changes that affect investors and traders, etc.
• Pulse: Pulse, on the other hand, is simply put, a news aggregator. They don’t curate their news but collect relevant news from different sources like newspapers, financial news blogs, etc. It is also available on Android and iOS.

Analyses and Insights

• Finshots: Now, this is one thing that I like. Finshots is financial content developers. They write about the latest financial development. They have three forms of content. Finshot Daily — is a daily newsletter that talks about a financial new topic. But, the style is such that it is super easy to understand the concept. It is not just a dry reporting but is focused on making the most layman person to understand what exactly does this news mean. It is a manifestation of the ‘explain to me like I’m 5' concept. Finshot Market — is a more in-depth article about certain companies or sectors. This comes out a weekly frequency. Then some infographics are quite well created and convey very well distilled information. Other than that, they have a good social presence through which they share snippets of knowledge. They just started their YouTube channel for yet another content stream. Overall, a fantastic content team to follow.
• Market Intelligence: This is a bulletin of market-related details. It also includes circulars on different things. Couldn’t quite figure out the usefulness of this, but then this is quite less known and not much advertised either. And, oh yes, it has a market holiday calendar as well, for what it is worth.
• StockReports+: StockReports is a product by Refinitiv and sources its analyses from Thomas Reuters. What does it provide? A comprehensive stock, market, and industry research for more than 3000 Indian stocks. And it is updated daily. For a stock/company, it gives you a composite rating based on earnings, fundamentals, relative valuation, risk, price momentum, and insider trading; industry ranking; sectoral analyses; and pages of comprehensive insights on a variety of parameters of the company. This is well embedded with stocks in KITE and you can simply click on a button in KITE to access this analysis. BUT, it is a paid access. To peek into the depth this report has, have a look at this demo. While the reports are paid, the composite rating, that they come up with, is freely accessible.
• TickerTape: TickerTape is another great product that provides a multi-faceted value to an investor through its many features!
• Portfolio: You can import your portfolio from KITE and see it here. Meh?!
• Basket: You can look at your baskets of stocks. Still not good enough? Ok…
• WatchList: You can stock to your watchlist, where you can track their key metrics and performance. So what, eh?
• Screener: Screener allows you to filter more than 1800 stocks using 70 different filter types. You can access a few of them for free. For the rest, you have to pay up. Getting warm, hmm?
• Stocks: For most of the stocks, it shows a lot of useful information aggregated at one location. You can look into price chart across time; forecast of price, revenue, EPS, etc.; financial statements like income, balance sheet, cash flow; comparison with peers across many dimensions; shareholding pattern and history; aggregated news relevant to the company; and events specific to the company like dividends, corporate actions, announcements, legal orders, etc. It has information on similar lines for ETFs and Indices. Come now, this should get you interested!! But wait, there’s more!
• Market Mood Index: This is more about the abstract things, backed by empirical data. This gives you a sense of the mood of the general public. It spans from Extreme Fear -> Fear -> Greed -> Extreme Greed. If you believe in Warren Buffet’s saying ‘Be fearful when others are greedy & greedy when others are fearful’, this should be somewhat helpful. They claim to have tested this index and found it to be ~94% accurate in predicted the general stock market movement. It uses various market indicators to assess the market sentiment such as FII activity, volatility, and skew as measured by India VIX Index, exponential moving averages, market breadth, price strength, and demand for growth. However, my data science mind thinks that they can do so much more by scraping data from news and other sources to ascertain the macro-level sentiment of people. This will not only give them an overall sentiment but also reveal sub-segments who moving in a contrarian manner. Regardless, this seems to be quite an interesting index.
• TickerTape Learn: It encapsulates learning material, either in general or concerning the key offerings of TickerTape. Currently, there are courses in Elementary Economics, Stock Market Investing, Portfolio Investing, and Evaluating Stocks. It is largely text and completely free.
• TickerTape Blog : And then there’s blog. It seems to cover topics on current events, personal finance, stock stories, etc. This is also free…

Control Dashboard

• Console: So, you’ve something for your stocks; something else for your mutual funds, you invest in commodities too. Console is the place where it all comes together. It is the dashboard showing your (almost) net value. It gives you a 360-degree view of the portfolio. Here, you can bid on IPOs, read about corporate action orders, review your trade book, Profit&Loss statement, figure out opportunities for the tax-loss harvesting, take part in 60-day challenge, “an initiative by Zerodha to encourage traders to be more focused on their trading and bring back fun into their trading”; download statements such as contract notes, invoices, etc; review funds; set eMandates (NACH); and general account details. The one-stop-shop for reviewing your Zerodha universe (almost).

Discussion Forums

• Trading Q&A: A product needs a community to give it a cult status. Trading Q&A is not a cult. It is a discussion forum for almost every product/service by Zerodha, and then some more. Other than the product-related discussions, they also talk about anything finance related. It is a good forum to get your question answered… and, frankly, it must greatly reduce the need for Zerodha’s completely online support forum, since people solve their problems among themselves

Reflections

As I try to look at their empire from a birds-eye view, it looks like a well thought out and executed set of actions that is quickly turning into a flywheel. In 10 years … Yes, Zerodha celebrated its 10th anniversary on 15th Aug 2020 as the largest broker in India with more than 2 million users now i.e. almost double than the second in line… they have become HUGE yet down to earth in their conduct. In their universe they provide, you can learn, apply those learning in a safe environment, apply those learning to build your financial base, and that too, in whichever way you like. There’s everything for everyone and almost all of that is interconnected. I’m particularly appreciative because Zerodha has made the finance aspect of my life very smooth and automated.

If you want to join the Zerodha family, you can go to the Zerodha.com page to sign up.

Disclosure: The link shared above is a referral link. If you open an account with Zerodha through this link, I get 300 points. You’ll pay what you would’ve paid anyway. 1000 points are equal to Rs. 500. Among other things, these points can be ‘donated’ to NGOs. See this. Of the points I end up earning from here, I will donate two-thirds of it to these NGOs. The rest of it will go into taxes, I guess. You can trust me. I’m a stranger on the internet, after all! :)