Security trading has several charges besides purchasing the securities. The trader is also required to pay the brokerage fees to the broker. The broker receives the brokerage fees as remuneration for facilitating trade. Generally, it is the percentage of the trade value that is charged as brokerage. The brokers generally levy the fee over and above the trade value and are deducted from the trader’s portfolio.
Who is a broker?
A stockbroker acts as an intermediary who helps in purchasing and selling stocks, future trading, options, and other financial instruments.
The brokers can be classified into two types based on the service they are providing:
- Full-service brokers – Provide trading assistance for stock, currency, and commodity trading. Offer expert advice, manage the sales, and research on your behalf.
- Discount brokers – The professional fees for the Discount brokers are less, You can utilize the discount broker’s highly efficient execution platform for trading the stocks and the commodities.
What is a brokerage calculator?
A brokerage calculator is an online tool that the brokers and other investments platforms provide at the disposal of traders to facilitate the brokerage calculation for carrying out trade. The brokerage calculator does not only calculate the brokerage it also calculates the stamp duty charges, transaction fees, SEBI, turnover fee, GST, securities transaction tax (STT).
The whole process of calculating the cost of trade is simplified by the brokerage calculator. An individual is required to insert the following information in the online calculator to compute the cost of trading-
- Purchase price of the stock
- The sale price of the stock
- Number of shares to be bought
- State(for stamp duty)
- Size of the lot (for option brokerage calculator)
The calculator provides precise information about the cost instantly which makes trading speedy and timely.
What are the factors on which the brokerage calculation is dependent?
Brokerage calculation depends on-
Buy or sale price – The Buy or Sale price of a single unit of security is one of the main determinants of the brokerage commission
The volume of the transaction – Whether it is manual or brokerage calculating another important factor is the Volume of transaction. The larger the volume, the brokerage amount is more.
Type of brokers – The full-service brokers provide various services that are associated with trading such as researching, managing the portfolio, sales, imparting advice, etc.
Whereas the discount brokers provide a platform for trading and charging a small brokerage amount.
What are the uses of the Brokerage calculators?
- Investors can use the brokerage calculator for comparing the brokers levying competitive brokerage commissions
- The brokerage calculator not only provides the brokerage charges also provides the stamp duty charges, transaction fees, SEBI Turnover Fees, GST, and Security Transaction Tax (STT).
- The brokerage calculator provides the results accurately in real-time for quick and efficient trading.
- The brokerage calculator is free of charge
The traders can fully utilize the brokerage calculators and carry the trading process seamlessly saving time for cost analysis significantly.