# Calculating Brokerage in Share market

## Types Of Brokers

Brokers can be classified based on the services they offer.

Full service brokers: These traditional brokers offer assistance in trading stocks, currencies, and commodities. They will do the research, manage your assets and sales, and offer expert advice. You can also get assets for banking. Full-service brokers charge 0.01% to 0.50% for intraday and delivery trading.

DiscountBrokers: These discount brokers provide a highly efficient execution platform that you can use for trading stocks and commodities. They don't provide investment advice and their charges are much lower. They charge a fixed fee for each trade, either Rs 10 or Rs 20, depending on whether it is intraday or delivery trading. Some brokers don't charge delivery trading fees.
There are three types of brokerage plans available in India.

1.  Percentage of trading volume is Used to calculate brokerage
2. Flat brokerage per trade
3. Monthly trading plan that is unlimited

## Understanding Brokerage Charges

Remember that brokerage fees must be paid for both the buying and selling of shares. Some brokers may be exceptions to this rule, charging a fee for the selling or buying of shares only once.

This example will help you understand how to calculate brokerage in the share market.

Let's say a broker charges an intraday trading fee of 0.05 percent. This is what it means:

The brokerage charge is 0.5% of the total turnover. Let's say the stock you purchase costs Rs 100. The brokerage fee is then 0.05% of Rs 100 which equals Rs 0.05. The total brokerage fee for trading is Rs 0.05+0.05. This is Rs 0.10 for buying and selling.

The brokerage is calculated based on the total cost of shares divided by the determined percentage. The formula for brokerage is thus:

If the intraday charges are.05% and delivery is.50%, then-

• Intraday brokerage = Market price for 1 share * Number of shares * 0.05
• Delivery brokerage = Market price for 1 share * Number of shares * 0.50%

The charges for brokers are getting more competitive as a result.

## Useful

Once you have chosen a broker to represent you, it is important that the brokerage he uses on your transactions is consistent with the agreement you made. Also, you should verify the frequency with which brokerage is applied to your transactions.

The broker will deduct from your account an amount known as "Annual maintenance fees". Ask about these fees. The AMC charge deducts a significant portion of your fund each month. It is best to pay a lump sum at the beginning and have the monthly AMC fees null. The lump sum amount is approximately Rs 500-750 per month.

There are different rates for brokerage than the percentages above. You should also consider other charges related to brokerage.

This formula calculates the net trading cost.

Forex cost= Securities transaction tax + Stamp Duty + Other Charges

## Conclusion

There are many brokerage firms available for traders today. Brokers make a significant portion of their income from the brokerage they charge. Brokers offer lower brokerage to attract traders. If you give them more shares, you will be charged less. Delivery charges are usually lower than intraday brokerage fees. Look at the fees offered by brokers and make a decision today.

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