FYERS: Digital disruption in stock trading

Updated: June 3, 2019 1:43:16 AM

The stock trading platform’s business model is based on the volume of orders and not the order size, with every trade priced at a nominal `20

stocks, stock market, page industries, stock trading, share market, share market trends, buy shares(Reuters)

By Srinath Srinivasan

The Stock trading business sees second-to-second changes in the prices of stocks as thousands of brokers buy and sell from across the country. Keeping in mind the modern day trader’s need to simplify the process to something as simple as internet banking, Bengaluru-based Fyers has come up with an online platform where stock traders can trade with just a click of a button. Irrespective of the token size, each trade is priced at a very nominal value of `20. “There is a main broker and many sub-brokers who are involved in traditional trading. It creates a lot of complexity.

We eliminated that using digital technology, bringing costs down. The traders simply need to have an account on our platform,” says Tejas Khoday, co-founder and CEO, Fyers. The platform is able to offer a flat rate because of digital disruption and also because it does not force the users to use any other services that the brokers may insist on. The users do their own research and comparisons.

The business model is based on the volume of orders and not the order size. As of 2018, the platform handled around 7000 orders on a daily average with 15-20 % month-on-month growth. The orders are also corporate action adjusted, with a database holding data of the last 20 years, provided for free on the platform. Derivative and intra date market data for more than a year is made available on the platform for free.

Investing on the platform is also made free, i.e., for buying equities and holding them for more than a day, the platform does not charge the user even the flat fee—making the the platform a pure play trading platform. “Data is very important in this business,” says Khoday.

Per second, around 4000 packets of data are received from National Stock Exchange (NSE) on Fyers’ platform. Khoday says that the challenge for Fyers is to actually capture that data, compress it and make it available seamlessly for thousands of people on the platform every day and then to route the transactions back to NSE in less than 100 milliseconds.

“Due to the volume and complexity of data, we have to focus on the stability of the platform, given the fluctuating nature of the stock market. At the same time, we have to ensure data security for the traders on the platform,” says Khoday. In order to achieve stability and security, the platform goes through third party audits and certifications from key institutions and NSE itself. Automation also plays a key role on the platform.

An element of machine learning algorithm underlying the platform, for instance, can adjust data based on what corporate action is taking place, without any manual intervention.

Fyers started off as a bootstrapped platform and is operationally profitable. With an aim to go big on the mutual funds space, it has added a thematic investment feature to its platform recently, having over 100 portfolios and relevant market research. With a strong digital stock exchange infrastructure already in place in India, Fyers aims to diversify further in the coming years.

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