Unlimited Trading Plans with Fixed Monthly Zero Brokerage | Espresso

Unlimited Trading Plans with Fixed Monthly Zero Brokerage

As a stock trader, the brokerage is one of the highest costs that you need to factor in. Stock markets are inherently volatile, and there are times when traders need to exit a position at a minimal profit or even a loss. However, before you start trading online, it is important to calculate the fees and charges associated with it to ensure that you make the right decision. 

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Most stockbrokers have different brokerage rates for the intraday and delivery segments. In such a landscape, having an unlimited trading plan with fixed monthly zero brokerage can be a blessing to traders.

A decade ago, delivery trades were charged a brokerage of around 0.3%, while intraday trades were charged 0.03%. This was the time when Full Service Brokers were the dominant ones in the market. As Discount Brokers started getting popular, the brokerage rates for intraday trades reduced, and most brokers started offering zero brokerage services for delivery trades.

Introducing Monthly Zero Brokerage Plans

Also known as unlimited brokerage plans , zero brokerage trading plans allow the trader to place unlimited trades in a month by paying an extremely low or zero amount. While this sounds like an excellent option, it is important to assess the pros and cons of such plans before signing the dotted line.

Pros of monthly zero brokerage plans

  • Fixed monthly brokerage regardless of the volume of trades done
  • Certain brokers offer a refund if you do not trade in a specific month
  • Saves taxes since the monthly fee is subject to GST

Cons of monthly zero brokerage plans

  • There can be hidden charges that you might not discover at the time of opting for the plan. For example, some brokers might charge for allowing you to use the platform for trading online.
  • Typically, such plans offer lower margins
  • Many brokers offering monthly plans tend to block advanced orders like Bracket Order (BO), Cover Order (CO), etc.

Who should opt for a monthly unlimited trading plan?

Frequent traders can benefit from these plans. If you are placing several trades in a month and, despite being on a zero-brokerage plan for delivery trades, the total brokerage paid by you across the month is high, then you might want to consider opting for a monthly unlimited trading plan .

To assess this, you can look at your trading history over the past few months and pay attention to the brokerage amount generated by you. The most common types of traders who can benefit from these plans are the ones who frequently trade online in penny stocks, across multiple segments like stocks, currency, commodities, etc., or have high volumes of trades per month.

However, if you are not regular at trading online and don’t generate high brokerage, then these plans would only mean more hassle than benefits.

Summing Up

Unlimited trading plans with fixed monthly brokerage can help budget your monthly trading expenses and focus on the market price of stocks without having to worry about brokerage. This can help you leverage small price movements and book profits instead of trying to accommodate brokerage and other charges too.

With zero brokerage trading charges on delivery trades, you can enter a swing or positional trade to benefit from medium-to-long-term changes in stock prices. There are many brokers that offer delivery trading with zero brokerage and a flat fee as the brokerage for intraday trades instead of percentages.

Many new-age brokers also charge zero brokerage on loss-making trades. Before opening a trading account, ensure that you check these aspects carefully and choose a brokerage plan that matches your trading profile.

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Frequently Asked Questions

Before making this decision, we recommend that you assess your trading activity and brokerage generated. Usually, such plans are ideal for traders who place a high number of trades, buy and sell a lot of penny stocks, or invest in multiple segments like stocks, commodities, currency, etc.

Since many brokers offer zero brokerage trading with delivery-based trades, you can buy a stock without having to worry about paying extra as brokerage. Hence, trading with zero brokerage helps you enter a swing or positional trade to book profits by the subsequent upward swing in price. With swing and positional trades, since the type of trade is ‘delivery’, you won’t be charged brokerage and can benefit from small price movements.

When you place a trade on the stock exchange, you have to pay brokerage to the stockbroker. Many brokers offer zero brokerage trading for delivery transactions. This means that if you are taking delivery of a share, then you don’t have to pay any brokerage.

Unlimited trading online plans are subscription plans offered by stockbrokers where you can place unlimited trades every month for a fixed fee.