Hello! When Dhan’s management initially said that Dhan’s MTF rates are competitive, I was a bit sceptical about it.
With Zerodha now launching MTF @ 15.7% (effective rate) compounded daily, I am convinced that Dhan has some pretty high ambitions and want to offer the best to its users.
Dhan’s MTF rate is 16% and Zerodha’s 15.7% despite Zerodha having the advantage of a great NBFC, whose cost of funds are better than Bajaj Finance too.
Dhan charges 0.0438% per day and Zerodha at 0.4%.
However, I’m eager to understand, if Dhan can do 15% p.a. flat because the MTF exposures at Dhan have been trimmed so the overnight risks and exposure risks is more at par like a LAS account.
Please do give it a thought @PravinJ@kuldeep because that will put Dhan at a really attractive proposition.
We are bit conservative on our approach for pricing on MTF, as you rightly mentioned for cost of funds. We are a newer entity, and it takes a while to build a credit history with lenders. At the moment we run the MTF book with wafer thin margins compared to the competition.
That said it is good to see some platforms starting to offer MTFs who have historically stated that they would never do MTF ever. Guessing what they say is right, competition is good for end-customers
We would like to play by our focus areas - building Dhan by incredible product and tech experience for power traders and investors.
ps: if we are able to pass on the benefit to users in future, we will thing about this for sure!
You don’t really need to bring down the rates now, but this is the thought-process that I was hoping to listen out for. I am eager to restart trading at Dhan, once the MF pledge is rolled out and The Journal introduced. Have a great evening.
Ya lot of philosophies have changed at the competitor end since Dhan came into the scene
Am not a great fan of MTF but competition has proved left and right that all the self promoting talk at competitor end is just posturing. It is all about money.
Here it is: