Know more about brokerage charges in the share market
Trading in the share market involves specific additional costs. Include the service tax, security transaction tax, and brokerage charge. Amongst these costs, the brokerage cost might vary depending on your selected brokerage company. Thus, to calculate the brokerage charge, you should always use the brokerage calculator option. However, there are several other factors you need to consider while calculating brokerage, with or without an option brokerage calculator, in the share market. Here are some of the crucial facts that you should know about.
Kinds of brokers
There are two kinds of brokers in the share market- traditional brokers and discount brokers. Traditional brokers are also known as full-service brokers. These brokers help you to trade on stocks, commodities, and currencies. Thus, you need not worry about your gains as these brokers provide you with expert opinions on the market. They also advise you on the stocks you should invest in that would help you to get better returns. The brokerage charge for the full-service brokers varies from 0.01% to 0.50% on your tidal earnings. The percentage of brokerage charge depends on the nature of services you avail of from the broker.
Discount brokers- Discount brokers provide a platform that helps individuals invest in stock, currencies, and commodities. However, these brokers do not offer any advice on investment opportunities. Thus, while on the one hand, discount brokers are preferred because they provide greater individual autonomy, they are also well-known because of their lower brokerage fees. These brokers will provide delivery free and charge approximately ₹15-20 per order. Though these brokers do not offer valuable suggestions on investing in different stocks and which would be fruitful, their low cost has attracted several customers.
However, irrespective of the broker you choose, you should use an MCX margin calculator to get a rough idea about the brokerage charge. This also helps you to understand the profit margin kept by each broker. Thus, you can easily choose a broker that has a low-profit margin and is affordable for you.
What is a brokerage charge, and how is it calculated
When you invest in stocks, commodities, and currencies, you do it through the help of a platform. The individual or groups handling this platform are the brokers. Thus, a broker helps you invest in stocks and provides helpful information on your investment ventures. However, their services can not be free of cost. Thus, you need to pay the price for these services every time you buy or sell a stock. Let’s say it’s like availing of any other service, where you need to pay every time you avail it. Brokerage charges are generally a percentage of the total sum earned by you. Thus, though the charge is explicitly implied on all the stocks you sell or buy, it is calculated after a specific period.
The brokerage charge also depends on the kind of broker you choose and the nature of services you avail. For instance, the brokerage charges you need to pay for just accessing the platform for trading in stock are lower than availing of other services like getting suggestions from the brokers and the like. However, it would be best to use the brokerage calculator option to estimate the charges you need to pay in all these cases.
It is crucial to know about brokerage and its charges before you invest in the share market. It would help to estimate the brokerage charge you need to pay beforehand to budget the amount you want to invest in stocks, currencies, and others in the share market. Further, knowing about the different kinds of brokers and their services also help you to choose the right broker for your investment options.