Trading is a zero sum game. In fact, it is a negative sum game if you consider all the transaction costs, taxes and brokerages you have to pay. Once you enter the arena of trading, it is a fierce battle to make a winning trade. Often times, a trader is deluded to think that he just need to be a better trader and ride on winning trades to make a fortune. Of course being a good trader is difficult, but that is not enough. In markets, we have to also fight against this invisible enemy called “Expenses”, which is eating into our profits and making someone else rich (mostly the brokers). For most traders, the biggest expense is “Brokerage Cost”
Taxes and transaction cost is something we can only control by either not trading or reducing the frequency and size of our trades.
Fortunately, with competition among brokers, the brokerage costs can be significantly reduced. An average trader can increase his profits by almost 1~2 points (on Nifty Futures and Options trading) by selecting the right broker. So if the average trade size is 20 lots of Nifty, the brokerage cost with traditional broking company would be INR 50 per lot and lets say a trader is buying and selling Nifty 25 times every month. Illustration to compare brokers:
If you are still being a victim of the high brokerage charged by “Traditional Brokerages”, it is time to change. Identify the right brokerage for your needs or you can select the right broker from the below list.
*NiftyTrader being a premium portal for traders, most of these brokerages have waived off the account opening charges for niftytrader.in visitors.
Major Discount Brokers in India
|Broker Name||Brokerage||Account Opening Charges (Normal)||Special Offer for NiftyTrader Visitors||Open Account|
|INR 20 per trade||INR 250 for trading account||Lifetime Free Trading Account|
|INR 20 per trade||INR 200 for trading account||Lifetime Free Trading Account|
|INR 20 per trade||INR 300 for trading account||Free Trading Account + 1 month free trading|
|INR 9 per trade||INR 200 for trading account||Lifetime Free Trading Account|
|INR 18 per trade||INR 400 for trading and Demat||Free Trading and Demat Account|
|INR 15 per trade||INR 200 for trading account||Lifetime Free Trading Account|
|INR 15 per trade||INR 750 for account opening||Zero Account Opening Charges|
Full comparison of these brokers is available here.
From the traders perspective, we have tried to compare brokers on the following parameters:
Below is the description of these points for the newbie investor.
Brokerage: This is one of the most important thing which you should see before becoming a customer of any broker.This is one thing which will decide the amount of profit you are making and in the long run in trading believe me that this will be one of the most important thing. All the above discount brokers fare well on this front.
Ease of use : The user friendliness is the second most important aspect. With time, you can get used to the platform but it is always a good idea to go for reliable, fast and robust system.
Software for various platforms: We are living in multi-device world. If you are on the move and still want to be able to manage your position, you should also consider the trading platform for your android or iphone device.
Day trading auto square off time: Some lazy brokerages want to close your positions quickly. They won;t tell you about it at the time of opening account . this will surely be a surprise if you talk to their representative. Better to go for brokerage that squares off open positions later in the day.
Other Investment Options: Is the broker providing only equity trading or also providing Debt/Bonds/IPO/Mutual fund through the site.It always good for a retail investor to get all in one platform so it become easy for him to manage.
Ease of Fund Transfer: This will decide when you will get the money in your bank after it is received in your Demat account and which are the bank through which you can link your account.
Major Full Service Brokers in India
|Broker||Name||Account Opening||Brokerage||Intraday||Open Account|
|Angel Broking||Rs 350||.50%||.06%|
|Axis Direct||Rs 999||.50%||.05%|
|HDFC Sec||Rs 999||Higher of 25 or .5%||Higher of 25 or .05%|
|ICICI Direct||Rs 975||.55%||.05%|
|IDBI Paisa Builder||Rs 700||.50%||.08%|
|Motilal Oswal||Rs 550||.5 - .9%||.035%|
|Reliance Sec||Rs 950||.30%||Buy - Nil|
Sell - .25% to .4%
|SBI Cap||Rs 500||.75%||.05%|
|SMC Global||Rs 499||.30%||.03%|