What if Zerodha had a Virtual Mode
Paper Trading (Virtual Trading) for Beginners
How can we make trading more accessible and inclusive?
Last week we all saw the power of retail traders being able to move the markets and prove you don’t have to be a part of a huge hedge fund to hold and work with financial assets.
All of this can be even more widespread with financial literacy and tools that enable independent financial management, budgeting and investing. One of these methods to allocate your precious funds to multiply your wealth is through trading on the markets.
But, it can be intimidating to many and be seen as a high risk vicinity to enter. People like to take informed decisions regarding their savings and are very careful, usually not high risk takers (of course, when they don’t know what they are getting themselves into).
How can we change this?
Background
Zerodha currently caters to a large number of traders — being one of the most popular choices to trade in India given it’s cheap brokerage prices and it’s super nice user interface. To expand the user base further, Zerodha could tap into a market where trading is not a norm yet.
Virtual Trading is a simulated trading process in which would-be investors can ‘practice’ investing without committing real money. This is done by the manipulation of imaginary money and investment positions that behave in a manner similar to the real markets.
There are some folks who have never thought of trading in the markets as they don’t know much about the subject. But there are also folks who when learning how to trade, go on to creating spreadsheets to simulate markets and assume their holdings. Though sometimes these methods can have huge drop-out rates due to their inaccessibility. Another turn that can be taken is people start trading with real money but with not enough experience in the market, ending up losing some of their wealth in the process.
Introducing Virtual Trading with Zerodha’s user interface and experience as a switch could invite users to give a hand at trading with no risk.
What can Zerodha hope to achieve?
- An increase in the user base of the platform
- Being able to invite more people to use the platform who don’t necessarily have the means to use it to begin with
- Educate these people with the skillset required to be an informed player in the market
- Convert users from Varsity (Zerodha’s Education App) to Kite (Zerodha’s Trading App)
Assumptions
- Users will use virtual trading before investing their savings
- Users will download Kite and sign up (convert) to this feature from Zerodha’s education app — Varsity while studying about financial markets and trading
- Virtual trading will help users (including pre-existing users) be more confident and informed traders
- In terms of time being spent developing this feature, it should mainly be the switch from real trading environment to virtual while all other functionalities, UX UI remains the same
- The data and stock prices being logged real time remain the same although the databases on which real and virtual traders trade should be different i.e. a buy on the virtual platform should not affect the prices or orders showing up on the actual stock market
User Types
- Varsity users or just financial trading students in general who want to start trading and put what they are learning into practice
- Users who trade already but would like to have a virtual portfolio to practice trading at free will
Use Cases
The below requirements use the MoSCoW method of prioritisation; from greatest to least importance: Must have, Should have, Could have, Won’t have
Sign up prompt on Varsity — Should have
User: “I’d like to know about this feature and be prompted to sign up for it while I study trading on Varsity. I would like to get hands on to this feature before I get too deep into the lessons so I can practice the theory I am studying.”
A great way to introduce users to this feature the moment they start studying the market on Varsity would give them a chance to test their skills directly in a real world environment.
On completing any of Varsity’s quizzes, users can receive a prompt with a CTA to download Zerodha and get started.
Virtual Trading Mode — Must have
User: “Before signing up for a demat account, I would like to sign up for Virtual trading to test the waters without investing any of my money in it, practice my skills, and gain confidence.
Once I see some positive returns on my investments, I will confidently apply for a complete account.”
Virtual Mode Switch — Must have
User: “I’d like to switch seamlessly between the virtual and real trading mode if and once I have paid for my demat account opening on Zerodha.”
Once the user switches, the database on to which the orders get placed switches too — however, the prices that they see are all real-time while not being affected by their investments.
Virtual Wallet (Funds) — Must have
User: “I need to see my account balance and download statements to see my progress for Equity, Commodity and my other forms of assets. I’d like to have a large amount to begin with.”
The user is provided with a starting balance of either ₹10 Lakh or ₹1 Crore as that’s the amount most players in the market usually play with to see some tangible results (over the years ofc).
In-App Walkthrough — Could have
PM: “Historically, we have not done in-app walkthroughs as Varsity has been enough to give a detailed walkthrough of the features. Having a running guide could distract the user and confuse them further. But it is something we could consider to give to the new users. This could briefly explain the features, overlay graphics on them as a guide. It would only be visible the first time a user signs up for Zerodha.”
Leadership and Community Board, Discussion Feeds — Won’t have
Similar services on the market have gamified the process of trading virtually and created a community around it. But considering how trading is done at a professional level does not include gamifying the process, motivating the user or creating a community with discussion boards. Professional trading is done without any distractions, with just a simple stream of real time prices and options to place or sell an order.
Another reason for not having discussion boards is to avoid the spread of players in the market trying to control the market with their tips. This could deceive the new traders and distract them from learning about the company itself and talking to trusted sources in their network to give them inside knowledge about the company — ultimately making an investment with risks calculated beforehand.
Other than these additions to the UI of Kite, there should not be any changes in terms of the real time stock prices stream. The point of this exercise would be to give everyone a chance to experience how trading works and gain confidence.
Userflows
Sign Up: User signs up for Zerodha for free with a simple onboarding process requiring their name, email address and password.
Once the user wants to move to trading with their wealth they can apply for a demat account with the same email and phone number on Zerodha’s website.
This simple and squeezed signup process can get users to start trading at no hassle. Once they sign up, they can go on to see they are banked with a good amount of virtual money in their account as highlighted earlier.
Positioning: Users use their funds to trade fantasy stocks linked to actual market prices. Here’s the step by step.
The workflow works the same as Kite where the user watchlists a stock, clicks on buy, types a quantity at a desired current price and places the order. This stock later reflects in their holdings (from positions) with current portfolio valuation in a couple hours or the next trading day.
To end with — I really believe tech helps make things accessible and Zerodha has really scored a milestone in terms of making trading so accessible to everyone! (My dad himself went from buying stocks and talking to brokers at IIFL to moving here within a week with all his portfolio — cause it’s so simple to use.) And unless you’re a pro trader, your trading terminal does NOT need to look like this:
Having a good design just makes things a bit more inclusive and easier for the end user. And for Zerodha specifically — I feel they have reached a place where it would be good to venture out to something a little different and get even more people to join their journey.
Just a bit about this blog — I am going to be writing whatever little about product that I know and the ideas that I have.
