How to calculate the Brokerage Charges

calculate the Brokerage Charges

For the traders, the accounts of demat and trading are very important. The trading account helps one to carry on trading while the demat account helps to keep the shares bought on the delivery basis as they are usually for the long term. Hence those who want to either trade or invest in the stock market, they need to go for the demat as well as trading account. These both accounts are a must for a trader or an investor. One can get these accounts opened with any sub-broker or broking company.  Usually, for the demat account, there are annual charges while for the trading account there is no fixed charge but has brokerage on every trade.

The brokerage:

This term in the share market holds great significance. The service providers charge some amount under this head of revenue. For the intraday trade, there is brokerage which may be a fixed amount or a definite percentage while for the delivery also the case is same. Some of the brokers prefer to have a certain percentage of volume or turnover of trade while some prefer to have a fixed amount on every trade irrespective of the turnover. This system is decided in advance only when the client is to open an account. The client can also use a brokerage calculator for the brokerage point of view. Here one must note there are also other charges that one has to pay than the brokerage which includes the tax also. Hence the final amount that one has to pay to the broker may be a different one than what he calculates on the calculator.

Get the best broker:

The broker is the main point of contact if one wants to open an account and trade. He can offer the services of account opening and trading to the clients. As for a broker, the main source of income is his brokerage he does not allow to have any account with low brokerage rate. However if from the profile of the client he can smell some huge business he can definitely allow an account with low brokerage also. For the broker, there are some reasons that force him to change the brokerage rate. Here are some of these reasons.

  • The new branch: If the broker has got a new branch opened in an area where the rivals already have a strong client base, to get some clients he may have to offer low brokerage.
  • Bulk Deal: If one gets trading and demat account in a huge number from a company or other organization, he may allow no high-charges on brokerage.
  • Premium client: If the broker feels that the client is a premium client who may offer a huge trading on a regular basis he can offer low brokerage plan. If the client offers the brokerage amount in advance, the broker may offer him a low rate of brokerage also.
  • High margin money: If the client is ready to provide a cheque of high margin money he will offer low brokerage rate.

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