Quadmatics

[ a brighter trade ]

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 PROBLEM

FRACTAL NATURE OF BROKERAGES

Clients have high expectations upon selecting a new broker,

yet 79.8% of retail accounts lose money, causing a dramatic
retention rate.

Stock recommendations that are often promoted by dealers

are driven by brokerage biases and vested interests.

OUTCOME

40% of new clients stop trading within the first month.

80% stop within 2 years.
93% stop in the next 5 years.

Source: The Financial Forecast 2

 PROBLEM

THE DILEMMA OF DAY TRADERS

Good trades are born out of discovery and short lived. Almost
all day traders seem desperate and struggle to find the
optimal price-time determinant for a successful, time-bound
trade.

THE CASE WITH STOCK SCREENERS

A lot of people rely on stock screeners to evaluate the right

price to jump in, but they fail to understand that screeners act
as preliminary research, not as a provider of a final actionable
result. The built-in technical and fundamental indicators focus
only on quantitative factors but ignores the erratic, recurrent
change of financial data-sets. Screeners always have a place
in the investment process, but not in a day trade.
Source: The Financial Forecast 3
 EXPLANATION

THE SITUATION

55% to 75% of newly inducted client’s trades are either based

on brokerage research reports or stock screeners.

WHAT SUCH REPORTS ACTUALLY MEAN

'Investment ideas’ proposed for already solvent scripts.

‘Stock of the week’ looses momentum and reverses.
‘Pick of the day’ seldom hits without stoplosses.

THE PAYOFF

If client loyalty shifts, there is a good chance of taking friends

and fellow trading acquaintances with him or her.

Source: The Financial Forecast 4

 IMPACT

BUSINESS REPERCUSSIONS

One of the highest client attrition rate among verticals.

Less trade, less brokerage, minimal revenue, dismay business

performance.

Using unbusinesslike ruse to retain clients ― pay only if you

win, as clients are very concerned about the brokerage
amount they have to pay on loss making deals.

Most of the times the client ends up using the brokerage

infrastructure literally for FREE.

Compelled to set brokerages at highly discounted levels.

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 FINDINGS

THE BOTTOMLINE

Brokerage is a highly competitive, commoditised service

where generating commissions and churning accounts is the
mandate for relationship managers.

Management follows a blame-game for client churns.

Clients are more than happy to pay twice the usual brokerage
for consistently good trading calls.

THE ONLY WAY OUT

Impulsive for brokerages to move on from shallow market

practices and provide high probability winning trade-picks, on
regular basis.
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 OFFERING

Quadmatics introduces a high probability, high frequency

derivative price forecast system that uses self-learning AI
rank framework to help predict aggressive price movements.

Our AI identifies abrupt sweeps to find trend swings for the

opening 15 minutes in approximately 150 NSE-listed stocks.

Zero High Less

Emotion Speed Exposure
in in in
picking trends price discovery trading time

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 VALIDATION

TRAFFIC
ACTIVE CUSTOMERS: TREND FOR TOP PLAYERS
ACTIVE CLIENTS (in ‘000) FY14 FY15 FY16 FY17 FY18 FEB-19
ZERODHA 18 30 62 166 541 887
ICICI SECURITIES 501 595 560 618 798 831
HDFC SECURITIES 279 348 408 483 602 668
SHAREKHAN 275 343 336 366 535 517
KOTAK SECURITIES 223 268 247 274 369 435
AXIS SECURITIES 77 120 184 259 405 422
ANGEL BROKING 140 160 171 230 364 415
MOTILAL OSWAL 123 153 166 207 308 322
KARVY 126 172 167 181 245 268
INDIA INFOLINE 235 286 263 198 225 222
SBI CAP SECURITIES 68 114 126 169 214 210
Source: NSE Handbook, HDFC Sec Inst Research List 8
 VOLUME
ADTV COMPARISION (Rs. Bn)
ICICI Sec
Angel Broking
IIFL
5Paisa
Kotak Sec
Geojit Fin
Motilal Oswal
JM Financial

Source: HDFC Sec research note, respective company investor presentation 9

 PRICING

MODEL

1 2
Freemium Premium

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EACH BROKERAGE CLIENT

delayed daily forecasts buy subscription to lift delay

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FOR SUBSCRIBED BROKERAGE CLIENTS

volume licensing for brokerages ₹ 99/day for clients

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 ADVANTAGE

FACTORS

First in Market Fully Automated Better Timing

no real competition no manual intervention spots optimal entry

Machine Learning Zero Human Bias Weekly Updates

powered by maths to avoid impulsive picks for up-to-date schemas

No Liquidity Crunch Finer UI/UX No Technicalities

forecasts given for derivatives for quick readability no analytical skill needed

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 TEAM

INVOLVED

Sandeep Panja, Data Science and Solution Architecture

Ex SAP Technical Consultant at Infosys and TATA Technologies. A graduate of
Computer Science & Engineering from National Institute of Technology, Agartala.
sandeep@quadmatics.com

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