Online Share Trading in India at Low Brokerage | Espresso

Online Share Trading in India at Low Brokerage

Since the SEBI has mandated all transactions in the stock market to go through a stockbroker, as an investor, the brokerage is an unavoidable cost. The markets are highly volatile and competitive, rendering profit-making a difficult task. Add to it brokerage and other costs associated with trading, and you have a higher mountain to climb.

 

Published on 12 January 2022

Hence, many investors look for low brokerage share trading accounts that can help them minimize the burden of costs and increase their chances of booking profits. In this article, we will talk about various low brokerage options available to investors opting for online share trading in India.

Types of brokers

There are two types of brokers – Discount and Full-service Brokers. Usually, Discount Brokers charge lower brokerage than full-service brokers. This is because full-service brokers offer a range of services like market research, investment advisory, etc., in addition to buying and selling of shares. On the other hand, discount brokers offer only online stock trading services. Therefore, discount brokers have a lower brokerage than full-service brokers.

However, simply opting for a discount broker is not enough. You need to consider various trading costs to find the best low brokerage share trading account.

Costs associated with online share trading in India

Here is a quick look at the different costs associated with online share trading in India:

  • Brokerage – A percentage or a flat fee on the trades placed by you on the market
  • STT– Security Transaction Tax payable to the Central Government
  • Stamp Duty – Payable to the State Government
  • Transaction and Clearing Charges – Payable to the stock exchange
  • SEBI Fees
  • GST on all charges

To get the best low brokerage share trading account, it is important to ensure that you choose a broker that offers a simple low brokerage option while adhering to the regulatory norms.

Factors to consider while looking for a low brokerage share trading service

There are various ways in which brokers offer a low brokerage service. While some brokers offer a low flat fee for all trades, new-age brokers have started offering zero brokerage on loss-making trades. In the world of online stock trading, profits and losses are equally probable.

In such a landscape, a stockbroker offering zero brokerage on loss-making trades and a flat fee for every intraday order across equities, commodities, futures & options, and currency segments, can help save a lot of money.

Let’s say that the stockbroker charges ₹20 per intraday order, and you place around 20 orders in a day. This means that you will place around 500 orders in a month (assuming 25 trading days), generating a brokerage of 500x20 = ₹10000. If around 40% of your trades were loss-making, then with zero brokerage on loss-making trades, you can save ₹5000 in one month alone.

However, it is important to remember that while the broker might waive off brokerage and offer a zero brokerage on loss-making trades plan, STT, stamp duty, and other regulatory charges will apply.

Summing Up

Stockbrokers understand that most investors and traders find it difficult to book profits in the highly competitive and volatile markets of today. Hence, many brokers have started waiving off AMCs for the first year, flat-fee brokerage on intraday trades, zero brokerage on loss-making trades, no brokerage on delivery orders, etc., to reduce the burden of fees and charges on traders.

Before you start online stock trading, make sure that you choose the right broker and use online brokerage calculators to get a fair estimate.

Chandresh Khona
Team Espresso

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