Brokerage calculator is a tool designed to provide the brokerage charges upfront. The tool is very beneficial for traders and investors as they can know the implications of a trader or investment upfront. This leads to less confusion in terms of trades.
For every trade; there are a number of entities involved like the Broker, Exchange, company, and such. Though digitalized, every trade creates an electronic transfer chain where all these entities work in tandem. We don’t realize this as electronically it only takes seconds as transfer / re-transfer policies are created on exchange servers of these entities so energy of every entity is involved. The charges are for this hassle-free service structure.
Typically, different types of charges applicable are:
- Securities and Transaction Tax (STT)
- Stamp Duty
- Transaction Charges
- SEBI Turnover Fees
- Goods and Service Tax (GST)
The brokerage depends on the type of brokerage you select,
Full-service Brokers: Charge a percentage of the trade value as brokerage. Services offered by full-service broker range from Broking services, Research, Wealth Management, Portfolio management, depository services etc. Specialized research and guidance is available.
Discount Brokers: Charge discount as in Flat Fee for a trade as Brokerage. Discount Brokers offer a platform for trading and not much else
Factors that influence brokerage fees are the segment of trading, type of plan and product category.
It’s a perpetrated myth that full-service brokers don’t provide Brokerage calculators as their charges are different for different clients. This is far from the truth and the fact is any broker worth his salt is providing a brokerage calculator for its clients.
Take for example, Choice broking. With the online trading platform Jiffy, Choice Broking provides a simple, easy to use Brokerage calculator.
One simply enters a few field values and the brokerage is generated. The fields are:
- Select the state you are from
- Select from Intraday or Delivery
- Select the stock
- Enter the quantity
The brokerage is calculated dynamically as the stock is entered or the quantity edited.
In the input fields you can also see the BUY PRICE, SELL PRICE and BROKERAGE RATE in percentage. You can also toggle between INTRADAY and DELIVERY and see the brokerage dynamically adjust to the selection in real-time.
The various charges are split up into,
- Transaction charges
- Clearing charges
- State Stamp Duty
- Sebi turnover fees
- Total taxes and charges
These charges with Brokerage applicable and Net P&L charges give the complete picture to the trader / investor.