For those who know the trading and prefer it to make some additional money than the routine activities, the term brokerage is not new. For one, who wants to trade in the stock market there are some rules and regulations to be followed. The trader needs to have a demat and a trading account. If he does not have them, he needs to get them opened with any broking company or an authorizedstockbroker who is associated with any such stock broking company. The brokerage is an expense for the trader but revenue for the broker,and hence usually no broker permits the discount here. The brokerage rates differ from broker to broker and company to company.
Every broker has a different way of charging the brokerage. The traders who have alarge volume of theamount can bargain to the broker on the basis of the trading and volume. The brokerage rate is something important for every trader,and hence it is much imperative for every trader as well as abroker. One can check the market to get the best discount brokers and see if he can have best features and facilities in terms of credit, terms and research features. There are different terms and conditions for every broker,and the trader needs to know them in depth before opening the account. The type of account and the style of broking charges matter a lot for the trader as well as the broker because they are the foundation of this relationship.
The type of brokerage:
The brokerage by a broker is also taken in different ways. Thereis advanced as well as regular brokerage. In the cash segment also the brokerage rate for the intraday as well as delivery are different. Usually one can find the delivery trade rates higher than that of the intraday one. The trader needs to check the brokerage rate before signing the form or acceptance of the deal.
- Advanced brokerage: Many brokers prefer to charge the brokerage in advanced. The client also readily accept the advanced brokerage as once the brokerage is paid, he can go for any number of trade and it will not affect his profit or loss due to the brokerage charge. However, in many cases the clients who are having limited trading feel it tough to go for and hence prove negative for the broker.
- Lump sum Brokerage: In some cases, the brokers charge a definite amount per trade or per In such case the client can go for a single lot with reduced brokerage but if the number of trade increases the brokerage also gets increased.
- Fixed percentage: In this system of charging the brokerage, the broker charges afixed percentage of theamount of the total turnover of the trade. It is automatically added to the bill,and hence the client may get the amount to be paid with brokerage only.
These are some of the brokerage systems prevailing in the market,and a trader can go for any of them subject to the acceptance of the same by the broker.