About No-brokerage On Loss-making Trade

All You Need To Know About No-brokerage On Loss-making Trade


In terms of paying brokerage, one of the numbers that make a major difference is ‘zero.’ So, is that zero present at the desired and righteous place in the transactions in the stock market? Do you feel happy with the amount you have to pay as brokerage? Do you want to open demat account for trading without paying brokerage? 

Introduction to no-brokerage on loss-making trade 

After you decide to get into the markets, you need to open a demat and trading account. Gradually, the bank account, broking account, and trading account will get linked in a seamless process flow at the time of trading. Due to this reason, you need to contact a broker, i.e., one that provides the lowest brokerage plan.  

At the end of the day, brokerage has a major role to play in ensuring trading profitability. And this profitability rises when you need to pay the least brokerage amount on your income from trades. Thus, zero brokerage on loss making trade is so popular nowadays. 

However, if you want to invest in commodity and stock markets, you need to make sure that you get in touch with an advisor or stock trading specialist. It aids the investors in making major profits from the share market and keeping losses at bay. 

In any case, there are several risks involved. If the traders are not highly disciplined and committed, getting in the negative zone at the time of trading is easier than you think. Traders need to be aware of the trading nuances to steer clear of losses. Thus, contacting a professional trading expert or getting suggestions from the market veterans is one of the best ways to earn good money in this scenario. 

Understanding the details of no-brokerage on loss-making trade 

The idea of zero brokerage comes from the increasing interest of the traders in the share market of India, and gradually, it started attracting curiosity from the investors. It’s a well thought out concept where the discount brokers take no brokerage for all kinds of trade. 

Read more: All about best trading apps 

Traditionally, trading with a stockbroker is all about paying a brokerage amount on the trades. The brokers charge brokerage in terms of percentage on the turnover values of the trade. Now, this business model used by the brokers makes the brokerage calculations pretty concerning and a major aspect of the investors’ trading habit.  

The simple reason is that the brokerage amount they pay reduces the profits they make from the trades. Although it is disappointing, paying this brokerage amount was part-and-parcel of trading before no-brokerage came into being. 

Let’s explain this fact using a simple example. Say an ABC broker gets two paisa brokerage charges on selling and buying intraday equity trading. For instance, you have placed two trades. Purchase one thousand shares of TCS equity at INR 600, and you sell the same for INR 610. Now, in this particular case, the brokerage they will charge would be (1000 * 600) * (0.02%) + (1000 * 610) * (0.02%) = 242 brokerage charge. 

So, in case the broker offers the brokerage plan with a flat INR 20 for every executed order, the total fees for these two executed trades would only be INR 40. Many of the brokers also have a one-time brokerage plan. For this, you pay an amount each month minus any worry about the number of orders you placed that month or turnover. 

What are the responsibilities of a discount broker? 

A discount broker is the stockbroker who has to carry out purchasing and selling of the orders at reduced commission rates. They are different from full-service brokers because discount brokers only execute the orders for the clients but offer no advice about investments.  

Read more: Best tips to invest in stock market in India

Once there was the time when hiring brokers was considered a big deal and something that only the rich people did. However, since technology has become such a major part of trading at present, it is no longer reserved for only the wealthy. The internet brings a major shift in the entire trading scenario by empowering the individuals having smaller capitals to start trading at smaller fees, along with smooth pushovers for accessing stock markets. 

The major benefits of no-brokerage on loss-making trade 

  • With no-brokerage trading plans, traders are not worried about the lot or size of the purchase and sell orders. 
  • The break-even point goes lower as the expenses are low. The direct impact is a major boost in the trade’s profitability. 
  • The idea of paying a flat monthly fee gets you free from the worries regarding the total monthly trades carried out. 
  • Many brokers get really persuasive in making their clients increase the volume of trade such that they can get higher brokerage. This plan leaves no implicit influence on a trader. 
  • Maintaining absolute transparency throughout and freely trade on all the major Indian exchanges 

The Indian share market comes with a hoard of hidden opportunities. All you need is to trade on the right stocks at the right time to make a profit. Being an investor in the commodity and share market, you need to talk to share trading specialists for helping you remain away from profits and losses. As there are several brokers offering profitable trades, they get the benefits of taking a share of the profits of the investor.  

Also, investors pay attention to the right timing to receive amazing returns. However, they end up being majorly disappointed as a considerable part of the profits go into paying the brokerage. 

Traders are usually skeptical about placing trades keeping the brokerage calculation in mind. It leads to letting go of the prospect of making profits through potentially viable trades. Therefore, zero brokerage trading offers the ideal plan for transparency to let you make the most of trading and avoid any unpleasant and unwanted charges on the trades. 

And that’s all you needed to know about no-brokerage trades. If you are planning to invest in the stock market as a beginner, no-brokerage trade is the way to go without a doubt.