Trading or investing in securities come with numerous charges apart from the buy and sell price. The brokerage fee is the most noteworthy, making up a large chunk of the amount. A trader is bound to pay this, which is the remuneration cost for the broker providing the facilities. Usually, the amount depends on the percentage of trade value. Such monetary expenses are a substantial factor in the final profits made. Smart investors thus prefer brokers with low charges, and to find out the best ones, use the brokerage calculator.
Brokerage Calculator
A brokerage calculator is an automated online tool available by brokers or financial institutions. It facilitates calculating the brokerage changes involved while swaying out the trades. However, in addition to its basic purpose, the calculator assists in various other crucial calculations.
There are different charges. These are –
- The charges for stamp duties
- transaction fees,
- SEBI’s turnover tees,
- Securities and Transaction Taxes (STT)
- GST charges.
A brokerage calculator thus simplifies the entire cost calculation process, saving time and effort. One requires just to provide the input data to get the results. The following pieces of information are necessary.
- Purchasing price of a security
- Price of the security while selling it
- Several shares transacted
- State mentioning the stamp duty
- Size of the lot, in case of options trading
- Frequency of the trades carried, i.e., daily, weekly, monthly or yearly basis.
In a matter of seconds, the calculator provides accurate results, expediting the execution of trades. It hence is of paramount importance for people like those involved in intraday trading, where timing matters immensely. The brokerage calculator for intraday trading assists in cost analysis before purchasing or selling assets.
How Can You Calculate the Brokerage?
Let us have a look at the process of calculation. The formula for this is,
Brokerage= Number of shares sold/bought × Price of one unit of the stock ×brokerage percentage.
The brokerage calculator uses the above formula for intraday trading and delivery trading brokerage charges.
Factors Brokerage Calculation Depends on
The important factors affecting the brokerage calculations include the following.
Purchase or Sale price
These prices are key brokerage charges. Considered in single units of an asset, they are directly proportional to the brokerage commissions.
Transaction Volumes
This factor is also important. One of the transactions, too, is directly proportional to the number of brokerage charges. The higher the volume, the higher the amount one needs to pay. Some brokers like Kotak Securities provide deductions when traders carry huge transactions.
The broker in concern also determines how much the charges will be. Two kinds of brokers. The full-time brokers and the discount brokers. The full-time brokers provide financial and investing suggestions, while discount brokers don’t. So, the charges will vary depending upon the range of services they provide.
Advantages of a Brokerage Calculator
1. The brokerage calculator imparts all the information assisting the investor in comparing charges of multiple brokerage firms. Now there are a lot of brokerage firms providing the facilities. But the charges vary from one broker to the other. You must have the complete details of the charges of a broker before using their platform for trading or investing.
2. They heavily reduce the time-consuming, intricate calculations involving numerous formulas. In addition, one even gets an idea of the charges before starting to transact. One can obtain all the results instantly, with
ease.
3. These calculations are very important for an investor or trader. They carry a large amount of significance in determining the profits or losses while investing. The brokerage calculator brings accurate and perfect results enabling the investors or traders to get the real picture of their expenses. This benefits in planning the strategies for investing and selecting the assets, keeping investors’ risk profile in view. The calculator provides details regarding the client too.
The brokerage calculators of trustworthy financial institutions, providing brokerage facilities, like that of Kotak Securities, stand out in this respect. They allow you to open a free Demat account with ease. It provides all the relevant information in a completely transparent and straightforward way. The information is bereft of any hidden transactions or information charges. The terms and conditions are very clear so that the customers can find them easily understandable.
So, to sum up, we can say that the pro calculator is a very handy tool for traders and investors. Reflecting the entire costs in a very lucid manner becomes a useful tool. You can try a good online calculator now and enjoy its benefits.
