The trading in the stock market has a number of factors that affect the thinking of trader. The main requirement here is a trading account which one needs to choose at the beginning of trading only. One can provide necessary documents and ask the broker to open a demat and a trading account. At this stage of account opening, one needs to check the rate of brokerage that he will have to bear every time he trades in the market.
If the brokerage rate is high, it can be troublesome for the trader who has a huge turnover as it can wipe off the profit made in the market. In many cases, the trader has to trade at low margin also and hence despite having huge turnover one may not be able to make a considerable profit. Adding to the low profit, he has to pay the brokerage also which again reduces the profit,and at the end, he is left with nothing. To avoid such situation, the traders prefer to have an account with low brokerage rate.
In the stock market, there is no standard rate for brokerage and hence every broker or company charges as per own standards. In many cases, one may have to pay heavy brokerage while some brokers do not charge any amount in the month also. For a trader here, it is important to open an account with the best discount broker in India so that the brokerage charges are reduced,and he can make a good profit from the trading. Adding the saved amount on brokerage, he can add more amount in trading which can lead to some more profit. Hence overall such a deal proves much helpful to him.
The type of brokerage:
In the market, there are various plans of brokerages charged by different brokers.
- Standard rate: In this category, a rate is decided between the client,and the broker charges the same rate to the client whenever he trades. However, here one must note that the brokerage rate for the intraday and delivery trading are different and for the future and options are also different. Usually one can see that intraday rates of brokerage are lower than that of the delivery based trading.
- Lump sum brokerage: In this type of brokerage the client has to pay a lump sum amount to the broker at a regular interval and the rest of the trades are not charged by the broker. This brokerage charge can be monthly, half-yearly or even yearly and same is discussed between the client and the trader while opening the account.
Advanced brokerage: Some of the brokers also charge advanced brokerage where before beginning the trading, the client pays the brokerage amount for a fixed period. In such type of brokerage, the client does not need to pay any extra brokerage for a fixed period. Hence as per one’s profile and volume of trading one needs to decide which type of brokerage he wants to go for.