Check the brokerage before trading

For those who are interested in the field of the share market, the trading is the best opportunity that can help to have enormous profit. However, for that one needs to have sound knowledge of the market, price movement and undercurrents that can help the trader to hit the trade at the very right moment. The timing is the most important element in the trading,and a trader needs to be prepared for such moments. One needs to understand his requirement as well as interests and be prepared for the associated risks. The share trading induces the trader towards the day trading as the capital required for trading in this segment is limited,and hence the risk is also limited.
The brokerage is also an important aspect for the everyday trader as it is an expense for him. For a broker, the brokerage consists a significant part of his revenue,and hence almost no broker is prepared to compromise with the revenue. There are discount brokers that can help such traders to have reduced brokerage charges that can help the traders to make additional profit by saving the expense of brokerage. The brokerage charges are charged differently by different brokers. There are various systems as per which the brokerage is charged. The client is informed about these charges before applying for the account and submission of the documents.

The brokerage charges and discount:

The trader in the share market has to pay certain charges to the broker as well as the government. He has to pay service tax which goes to the government while the brokerage goes to the broker. The tax is an amount that cannot be compromised,but the brokerage can certainly be. The client that has a huge turnover can go for the discount in the brokerage. However, the broker can check the profile and accordingly offer the rate that best suit to the profile of the client. There are various brokers that prefer to offer the discount in brokerage in different ways.
  • Lump sum brokerage: This is one of the modern styles of charging the brokerage. The broker here fixes an amount that the client has to pay irrespective of the volume of the trade. For a trader with huge volume this can be a good option if he trades in a single company,but if he deals in different scrips, it can be a costly option.
  • The fixed percentage: This is a traditional method of the broking. The volume of the trades matters a lot in this method. One can see the amount calculated on the basis of the turnover. For a broker with large volume, this can be a good and beneficial option if he can have adiscounton the brokerage else it will not be a feasible option at all.
  • Advanced brokerage: Many of the share brokers prefer to go for the advanced brokerage for a specific amount. This is a good option for the broker who aims to have certain revenue and at the same time the best for the client with limited trading.
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