The trading in the stock market is one of the activities that can help you earn well with limited investment and risk. The only condition here is you need to have knowledge of the share market and how the corporate work. You also need to keep various information about different companies in mind before dealing in the shares of the concerned companies.
You must know that market is much sensitive when it comes to the news affecting the companies and hence the price trend must be kept in mind before dealing with any of the segments or corporate.
The share brokers get an income from the traders who trade through them. It is known as brokerage,and there is no fixed rate of the same. The traders need to pay the rates as decided while opening the account. In such situation, a broker must keep in mind that the brokerage is a charge that reduces the profit or increases the losses. In such case, the discount brokers can be of much help as they charge low brokerage or offer a discount on brokerage.
The market has no fixed brokerage and hence every trader charges as per own set of rules and convenience. Here are some of the types of brokerages that can help one to understand the same and see which of them can be benefited to him.
- Regular brokerage: This type of brokerage is decided at the type of account opening between the client and the broker. Here the brokerage is calculated on the turnover of share prices. The invoice provided to the trader has the brokerage as well as other charges mentioned. Here the brokerage is counted on the basis of turnover of the total share values and hence in case of loss one has to bear more loss due to brokerage charges. In the intraday segment, the rates are low than that of the delivery trades.
- Advanced Brokerage: In this type of brokerage the companies or brokers ask for some amount as advanced brokerage. It is restricted to certain period say six months or so. Till the concerned period one does not need to pay any brokerage on his trades,but once the period is over, he needs to pay the advanced brokerage again. Here those who trade regularly can have a considerable difference in terms of brokerage paid.
- Lump sum brokerage: Some of the brokers charge some lump sum amount per trade and allow the trader to transact any number of times in the market. However, there are various terms and conditions one has to follow in this type of brokerage plans. This type of brokerage plan can be more helpful to the small traders who have one or two transactions a day and hence do not expect much profit but at the same time cannot bear heavy charges of the brokerage also.
The brokerage rate is an area where usually no broker compromises and hence while choosing the plan of brokerage one has to be much careful.