In the share market, if one wants to go for offline trading, he has to take the service of a broker. The broker is the person who has a terminal and authorized by the concerned broking house to carry out the trade in the live session. For this service, he takes charge on every transaction, which is termed as the brokerage. In this market, there is no set standard for brokerage, and hence, any broker can charge any rate of brokerage. From the viewpoint of a retail trader, the brokerage does not matter much, but for a bulk trader, a small discount in this charge can also lead to a considerable saving to the trader and hence one needs to focus on this rate also.
In this market, one can go for intraday trading or delivery trading. In the intraday, as the name depicts, one has to complete the trade on the same day and before the closing of the market. The rate of intraday brokerage is low compared to the rate of delivery based trading. Hence those who are ready to invest in the market can go for the delivery based trading where they need to pay the amount to the broker on the next day, but for the trader, the delivery base trading is not much helpful .
How to calculate the brokerage?
Calculation of the brokerage is something that one must know. One can have a brokerage calculator on the site of the trader or his company. One can check the same on his system and count the same that must match the bill amount asked by the broker. The rate of the brokerage is fixed when the client asks to open a trading and demat account with the broker and hence the trader as well as the broker has to follow the same.
One can also check the bills and consider other charges to reach the figure of the brokerage that is asked by the broker. There are also various brokerage calculators offered by the site of the service provider who can help one to get the figure of the brokerage.
For a trader, the brokerage is an expense while for the broker it is an income and hence the trader tries to negotiate on the same while the broker tries to have the best rate that he can ask from the client. In the market, one can find various service providers offering the services at various rates and hence, it is important for the trader to know the rate of brokerage at an early stage only. The broker can check various factors such as the turnover, margin money and overall trading of the trader on the basis of which he can offer some discount. However, in this age now, many of the service providers offer the broking service at the lowest rate, but there are various conditions that the trader needs to follow. In some cases, the service providers also make the trading restricted to an online segment only.