Online Share Trading

India Brokerage Charges

We all know the terms brokerage and brokerage fees. This is the brokerage charge that the broker charges the client to execute transactions on the stock exchange. Brokers make their main source of income from brokerage fees. Brokers will charge lower brokerage fees if you give higher volumes, and higher brokerage fees if your volumes are lower.

Why does brokerage get charged to my trading account

Brokers offer services such as execution of trades, settlement of transactions, and other related services. Trading Investment ideas and other information. The broker must have a staff and computer network in order to provide service to customers. Brokerage charges brokerage to cover these costs. This is the source of revenue for the broker.

Hence, why is the broker charging me STT/GST in the contract note?

  1. Brokers do not earn any income from the GST, STT or stamp duty.
  2. These charges are collected by the broker on your behalf, and paid to the government.
  3. The central and state governments levy taxes such as GST, STT and stamp duty. This revenue is for them.

Are brokers charged the same brokerage fees for all clients?

Brokers have an indicative brokerage rate. The broker's relationship with you and the volume of your trades will determine the brokerage rate.

Why does my broker charge a high brokerage fee for equity but a low brokerage fee for futures?

This is because futures and equity trade on actual value, while futures trade only on nominal value. In the cash market, it would cost Rs.600,000. To buy 1500 Tata Motors shares at Rs.400 you will pay Rs.600,000. In the futures market however, you pay a margin of 20%. The brokerage rate on futures is very low when you consider that Rs.120,000 is expressed as a notional value (Rs.6 Lakhs).

Who decides the rate for my brokerage account?

Your broker will clearly outline the brokerage rates in your client agreement. Equities Futures, foregoing and futures There are many Broker options. Brokers will notify you of any changes in brokerage rates in advance.

Are you able to request a change in the brokerage rates?

You can negotiate with your broker to get a lower brokerage if your trading volumes are greater than you anticipated.

What do you mean by per lot brokerages?

For options and futures, the brokerage arrangement applies more per lot. F&O can be traded in lots that are determined from time to time. Tata Motors, for example, is currently quoting at Rs.400 with a lot size 1500. This 1 lot brokerage will be fixed by the broker at Rs.30/lot. Brokers are very familiar with this type of per-lot brokerage. Futures and options.

How can some brokers offer almost zero brokerage?

  1. Only trade execution is provided by discount brokers. They don't offer advisory or research services, nor trading calls. They are able to maintain their business because they are net traders.
  2. Full-service brokers offer you reports, research, updates, and timely advice. This is why they charge more brokerage.

A broker offered me higher brokerage and guaranteed returns.

    1. You can decide the rate of brokerage. However, you must be sure that the broker is providing you with value for higher brokerage.
    2. However, you cannot fall for the guaranteed returns of equity markets.
    3. It is illegal to guarantee returns in equities through stock exchanges or SEBI.

Second, equity is volatile and cannot be guaranteed to return returns. Avoid making such promises.

How can I find out the brokerage fees I'm being charged for my trade?

The contract notes for each trade will be provided by your broker on a daily basis. Contract notes will clearly outline the price of execution, trade value, brokerage rate, and any other applicable charges.

Brokerage Options - Summarising:

  1. The volume of your transactions will affect the brokerage rate.
  2. Depending on the volume of your business, you can choose between fixed and variable brokerage rates
  3. There are two types of discount brokers: full-service brokers and brokers.
  4. Beware of the lure of guaranteed returns

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