Investing in the stock market is always a good idea for those who are looking at multiplying their savings. There are different alternatives available in the market when it comes to investing in the stock market. Apart from an initial investment amount, you would also need a good stock broker who can do trading on your behalf.
The broking charges:
The brokerage you pay to the stock broker can burn a hole in your pocket if you are not careful. The brokerage can be charged to you based on the number of transactions and the volume of business. To increase the profit, you must look at options where zero brokerage is charged to you. There would also be service tax which would be levied on the brokerage which again can carve out your profit that can be gained from this investment option.
The broker:
Like in any other industry, a huge competition is going on among the stock brokers to gain the maximum market share. Various offers are floated by the stock brokers to attract investors. Some of them give bare minimum brokerage, free opening of Demat account, stock investment tips, etc. It is important to opt for a right stock broker because once you start trading, it may be difficult later to switch to a different stock broker.
Usually, the brokerage is charged on the total volume of transaction done. For example, if you are buying shares worth Rs. 960,000- and selling the same for Rs. 970,000/- and the percentage of brokerage is at 1%, the total brokerage you will have to pay would be Rs. 193 (Rs. 96 for buying and Rs. 97 for selling). With zero brokerage trading, the amount of brokerage to be paid is fixed irrespective of the size of transactions, for example, Rs. 20 per transaction. So, the brokerage to be paid for the above example under zero brokerage would be Rs. 40 instead of Rs. 197.
The brokerage saved would mean an increase in the profit especially if you are trading a large amount of money. It is good to compare the plans and offers given by different stock brokers before you finalize on the stock broker for your trading purpose.
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