Finance

Calculate brokerage in an accurate manner

Various types of fees are associated with the process of share trading. Security transaction tax, stamp duty tax, and brokerage charges are among the various charges. Full-service brokers are professional agents who assist day traders in the process of share selling & buying, futures, and option trading. The option brokerage calculator is a perfect instrument to understand the final costs that are incurred by the day traders. Commodity today tips are displayed across major stock trading markets which can be useful to avoid loss. 

Full service brokers 

These are brokers who offer additional services such as stock trading assistance, commodity fluctuation trading, and currency optimization. Equipped with top research, the day traders will manage your sales and offer expert advice regarding commodity tips today. The service charges of traditional brokers are between 0.01 percent and 0.50 percent in both categories of delivery and intraday trading. 

Discount brokers offer an amazingly efficient platform for transactions that require perfect execution. Discounted brokers have lesser charges and they stay clear of offering advice on investments. Discounted brokers ask for a single flat fee of Rs 20 or Rs 30, in case of delivery trading and intraday trading. 

 Brokerage calculation is done according to a predetermined plan and follows the below guidelines:

  • The brokerage charges are a fixed amount taken as a percentage of total sales trading volume 
  •  The flat brokerage fees only take the trade volume into account in the case of intra-day trading
  •  Designing a monthly trading plan which offers an unlimited range 

 Awareness of brokerage charges 

 The brokerage charges can be honoured during both the selling and buying of the shares. Certain brokers are an exception as they stipulate that the total fees as a lump sum in both cases of selling and buying. Let us understand how brokerage charges can be calculated accurately through this example:

 Let us assume a full-service broker whose brokerage charge is set at 0.05 percent of the total trade value. The day trader asks the broker to buy a specific stock for Rs 100. Calculating the brokerage charge at 0.05 percent of the stock value amounts to Rs 10. 

The total share cost is used to calculate the brokerage by the following formula:

 If the charge is taken as 0.05 % and the delivery cost is taken as 0.50 %, 

The intraday brokerage = Market cost of a single share multiplied by the total number of shares x 0.05% 

 The brokerage delivery = The market cost of a single share x the quantum of shares * 0.050% 

 It is pertinent to note here that the charges are becoming more competitive due to the increasing number of quality brokers. 

Useful commodity tips today 

Just immediately after broker selection, one should guarantee that the adequate brokerage applied on the transactions on the stock market is more or less equal to the pre-agreed amount. One should be very upfront about this at the starting of the contract with the broker as it avoids any future disagreements. The option brokerage calculator should be used by the day trader to check whether the right brokerage charges are being applied on their bank statement at periodical intervals. 

The total trading cost is used by the below formula:

Trading cost = Security transaction tax + brokerage cost + other charges such as stamp duty 

Bottom line 

Day traders now have a rich variety of brokerage firms with many options that can get the maximum profits. A major source of income for a broker or the brokerage charges depends upon the quantum of the number of shares. Brokers charge higher charges when they are offered lower volumes. 

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