What Is Zero Brokerage And Its Advantages
Last Updated: Aug -5-2019
Share market is full of hidden opportunities. Investor needs to find out a suitable time to trade in order to attain maximum returns. If you are a newbie into trading, you must consult a trading specialist who can assist you with the necessary do’s and don’t’s. There was a time when affording a broker was a habit of only the rich. These brokers were called as the full-service brokers. In addition to all kinds of trading services, they also provide tips and investment advices and trends to their clients. Then slowly the presence of discount brokers increased, who assist in buying or selling of stocks at a reduced rate, as compared to full-service traditional brokers.
Thanks to discount brokers, people with smaller capital were able to enter into stock market. Generally, brokerage is charged by the broker in % on the turnover value of the trade. This however, reduces the profits of the investor that he can actually earn from trading.
The number of interested traders increased significantly when the concept of zero brokerage was introduced. This concept successfully attained the curiosity of all investors. Zero brokerage means the broker charges no brokerage for any kind of trade. After the success of zero brokerage in the U.S.A., some discount brokers in India also started the zero brokerage trading account facility in delivery segment.
Discount brokers like Zerodha and Upstox allow you to buy and sell individual stocks in cash segment at Rs 0 per trade. The motive behind this is to introduce the beginners to the world of trading. Eventually, they will then get used to trading practices with free equity delivery trading. And once that happens, investors are ready for intraday and derivative trading which involves some brokerage rates.
However, the question that arises is that does zero brokerage really make a difference? To answer this question, let us understand the concept of zero brokerage in detail.
From the above example, we can list down the advantages of the zero brokerage concept.
Once you select one-time monthly brokerage plan, then you don’t have to worry about the size of the trade.
You also need not worry about the number of trades during that particular month.
The break-even point becomes lower, which increases the chances of the trade being profitable.
A thorough research about the share market activities helps an investor to make right decisions at the right time. The confusion of brokerage charges, leads to missing potential trading activities that can lead to profits. Zero brokerage provides a perfect way of transparent trading avoiding any unpleasant trading experiences or charges for the investor.
Here’s the list of brokers who provide “Zero brokerage trading account in India”-
Apart from the names mentioned above, there are few more brokers which can be added to the list by montly plans .Usually, monthly plans are charged by segments - (Equity - Intraday, delivery, F&O, currency or commodity). For example, pay Rs 1499 PM to trade unlimited in Equity, Rs 1499 to Trade unlimited on Commodity, Rs 999 to Trade unlimited in Currency. The Monthly Plan charges per month fix fee, depending on a broker to broker.