Trading in the market is very important for those who want to make money with the help of their skills and limited budget. Such people can carry out trading with minimum risk in the stock market. However, there is no such area where the risk is not there. With the help of calculations and testing of trends, one can lower the risks of losing money. However, what one needs to have is a trading as well as Demat account. The trading account is one where the trader can buy or sell the shares the stocks in the same trading session.
The brokerage is the charge that is to be provided by the client to the brokers. The rate of the broker is not fixed between the buyer and service provider as well as the market. The trader can bargain on the rates front with the service provider. The service provider can check the profile of the trader, and on the basis of his findings, he can offer the discount in brokerage to the client. The discount brokers can be of much help in such situation. There are many brokers in the market who ask for brokerage in different forms, and accordingly, they offer the rates also. In such case, one needs to go for a little analysis and see from which broker he can have the best rate available. One can check different types of brokerage plans and see what can be the best option for him.
The types of brokerage:
There are regular and advance and lump sum brokerages in the market.
- The regular brokerage: It is also known as standard brokerage where the rates of intraday and delivery trades are decided in advance, and as the trader trades, the amount is applied. It can be a specific percentage on the turnover or an amount. It is applied on buying of shares as well as selling. Hence when the shares are sold the trader gets amount less to the extent of brokerage amount and at the time of buying he has to pay more amount to the extent of brokerage. Therefore to the extent of the brokerage amount his profit is reduced. It is the reason why all the intraday traders are more concerned with the rate of brokerage.
- Advanced brokerage: In this type of brokerage the client has to pay the amount of brokerage for a specific period in advance. After the payment, he can trade, and no brokerage is levied on the trades by the broker within that period. This system is more helpful to the traders who trade in huge volume.
- Lump sum brokerage: In this type, the client needs to pay a certain amount to the broker, and he can carry on trading to any extent. This is more provided to the clients of big-ticket size by the brokers. However, nowadays even small traders also prefer this brokerage as it can help them save a good amount on brokerage charges and earn well in intraday trading.