Fintechs and VCs are trying to find their next bet in Capital Markets & Options Trading. Sad news is this market is everything but an ideal space to be in…
More than >50% of the trading volumes in India are driven by Prop-traders, not retailers as they would like to think.
Smaller opportunity with F&O with less than 1.5-2 Mn regular active traders. Newbie traders come and go in here… takes > 2 years to become consistent trader.
Terrible retention rates for traders is by design. Newbie traders lose money, some even lose principal and out from market in just few weeks or months. For some firms, churn rates > 90% in 90 to 180 days.
Revenue pools are limited, approx ~5 Bn USD max everything put together including all revenue streams and all players. SBI quarterly revenue is 3X of Capital Markets revenue pool.
Highly competitive space, already 300+ stock broking firms and many offering everything for free.
Big disruptor play (Jio) and Big distribution play (PhonePe) are expected to make the competition even more intense.
Insanely high capital required for building meaningful products and infrastructure that scales, working capital requirements are through the roof.
Capital Markets adoption will increase with more and more investors flocking to Mutual Funds & Equity investments - unfortunately these are largely non-revenue generating products for intermediaries.
these are short notes… maybe will write a long post on this someday.
Whoever comes customers will stay with the broker that they can trust, offers great features, great customer support, great execution speed and reliability, willingness to listen to and build for customers etc. Dhan ticks many boxes here and irrespective of competition, I hope to see Dhan going up and up.
Thanks @t7support for the encouraging words. We keep saying this - we are a very small and insignificant player in the market in scheme of the things. Large players have been around for decades, are much bigger and now with PhonePe and Jio expected, we will see the stock broking world evolve very differently than it has.
We build Dhan because we absolutely love building a great product and serve our users. That keeps us going… slow and steady everyday.
What differentiate Dhan among others whoever comes in comeptetion is the experience and trust. I am 100% sure you guys will keep growing the way you are enhancing your offerings and number says so. Yes, it will take sometime for Dhan to make their space in Top 5 broker but I am confident on your growth and the way plateform has improved in last 1 year is significant. I am early launch Dhan user so I have seen the plateform improvement very closely.
I would assume that the real Retail Participation is much more smaller than what this report says.
One could safely assume that 60% of this retail funds circulating in the derivative market are also prop (commercial) in source, meaning they do not actually belong to the account holder.
JI, Would you agree with me if I said that 80% of the reported retail derivative volume comes from only 20% of the active derivative retail participant accounts? If you had a different approximation, what would that be? I’m interested in your comments on this. Thanks
