How Are the Brokerage Charges Calculated in the Share Market?
The investors have other take care of many charges such as buying price of the stocks. These include service tax, GST, Security transactions, stamp duty, brokerage fees, and others. One of the most significant is the brokerage fees that one has to pay for availing the services of the stockbroker. With these additional charges, the actual price of investing in the share market increases.
What Are Brokerage Charges, and Why Are These Fees Payable?
To participate in the share market, you need the help of a stock market broker in India. For that, you need a trading and demat account that the stockbroker provides. For these services, you have to pay fees, which are done by allotting a specific percentage of the total cost of the trade or by the flat-fee method.
The stock market brokerage charges are applicable for the buying and selling of shares in the market.
Here Are the Brokerage Plans in India
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The Monthly Unlimited Trading Plan
This plan offers a monthly fee that needs to be paid for trading stocks and securities, irrespective of the number of transactions executed under this plan.
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Flat-per Trade Plan
In this plan, the brokerage fees per trade are fixed.
How Are the Brokerage Fees Calculated?
The trading brokerage charges in India are calculated with the formulas that are based on the intraday and delivery charges. The following are the formulas:
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Delivery Brokerage Charges Formula
Delivery brokerage price = No. Of shares x % of share price chargeable (It is higher than the intraday brokerage fees).
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Intraday Brokerage Charges Formula
Intraday brokerage cost = No.of x market price of each share x % of share cost chargeable.
Factors That Impact the Brokerage Charges
The stock market brokerage fees depend on various factors such as:
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Buying and Selling Prices
The purchase and sale of the shares is one of the deciding factors when it comes to brokerage charges. It is usually decided on the specific percentage of the total value of the trade.
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Type of Broker
The full-service broker that offers diverse services may charge higher prices. There are many other brokers, such as Aadtiya Wealthon, that offer the lowest brokerage charges and provide the best services. The diverse services include market research, financial advice, assets and sales management, and other services.
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The Volume of Transaction
The volume of the transaction adds to the brokerage's charges. This is one of the most significant factors to think about when it comes to ordering a trade.
Conclusion
You can calculate the amount you have to pay for a specific trade by using a brokerage calculator. These are some easy tools that are available online. At Aaditya Wealthon, we are a full-service stock brokerage firm that offers many services demat and trading account opening, financial advice, stock advisory, and other services. So, if you are considering Opening a trading account, call us today.
Visit:- The Merits and Demerits of Investing Your Money in Mutual Funds in India
