In case you happen to do trade within the share market, you maybe
aware of the commission a stockbroker
takes in relation to every deal. Any
investor is directed by law to part away some fixed percentage to the stockbroker which is known as brokerage levied on each and every deal even though the investors suffer loss. There is no fixed rate of this
charge,and hence in the market, the trading service providers charge as
per their will and like. However, understanding the menace of the brokerage
there are also some service providers who have reduced the rates and hence if
you are a trader whose volume is huge, you can get a trading account opened
with such a broker who charges nominal
brokerage or almost no brokerage.
The brokerage realized by this way drastically cut down the profits earned by the
investor. In order to solve this problem,
good brokerage houses appeared in the market with the trading account having
low brokerage with various options.
Meaning of low brokerage trading account
A trading account having low brokerage constitutes the online
trading account that levies the lower sum by way of brokerage possibly the
lowest found within the market. A number of
online brokerage houses did emerge with a brokerage sum that can be said to be
extremely low in comparison to various regular brokerage houses and firms.
As you go for opening trading account of low brokerage nature, you are
not required to dole out hefty commissions on each
and every transaction you do. For a large
number of cases, this kind of low brokerage account shall mean that you will be
giving some low flat fee on deals in place of giving away a percentage of
profit towards the broker.
In case you trade via a trading
account charging commission by way of percentage, you shall be giving much more to the stockbroker because the fee taken on a percentage basis is very high.
For example
Scenario 1
Suppose
you purchase 1000 shares from any company at the rate of 500 per share by means of commission based percentage system
trading account. Let the percentage of the commissioner 0.50 % then you will be paying brokerage as a minimum Rs 2500,or it can tot up to the losses if incurred
while trading.
Scenario 2
Let it be as you
purchase 1000 shares of some company at the rate of 500 per share viathe trading account of low brokerage nature realizing from you flat fee Rs 10/= on every
deal. Whether you gain or lose, you are required
to pay only Rs 10 in place Rs 2500.
The distinction
found in the sum of brokerage you shell out enhances with the volume of the
deal. If you place a large order, you
will be giving out higher commission respectively. In the case of the trading account of low brokerage nature, you
will have to pay only Rs 10/- without any consideration of the volume of the
deal.
