Urban Money

Brokerage Calculator

Brokerage is an institution that facilitates the buying and selling of securities. Brokerages can be either full service or discounted brokerage. Services offered by brokerages include investment advice, portfolio management, and research.

A broker is an employee of a brokerage firm who assists his clients to buy and sell his investments. During this process, you may have to commission to the brokerage firm and/or the broker. The Urban Money brokerage calculator can assist you in determining the amount of commission that you will be required to pay the firm, in accordance with different investment schemes and amounts.

What is a Brokerage Calculator?

A brokerage calculator is a tool that helps you calculate the fees associated with trading stocks and other securities. The fees include stamp duty charges, transaction fees, fees charged by SEBI, GST, and STT.  It is important to understand how these fees can impact your investment strategy and profitability.

The most important factor to be considered is the type of security you are trading. Stocks, for example, typically have higher fees than bonds. Other factors include the size of your trade, the exchange where the trade is taking place, and the broker you are using.

Remember, excessive fees can eat into your profits, so it is important to factor them into your investment strategy. With a little bit of research, you can find a broker that charges reasonable fees and offers the services you need.

How to Calculate Brokerage?

When it comes to investing in stocks, one of the most important considerations is how much brokerage you will need to pay. Brokerage is the fee charged by your broker for executing trades on your behalf.

The most common method is to charge a percentage of the total value of the trade. For example, if you buy shares worth INR 1,000, and your broker charges 1% brokerage, you will owe them INR 10.

Another way to calculate brokerage is to charge a flat fee per trade. So, for example, your broker might charge INR 10 per trade, regardless of the size of the trade.

The method of brokerage calculation can make a big difference in how much you end up paying.

The amount of brokerage you pay will also depend on the type of account you have. For example, some brokers offer discount accounts that charge lower brokerage rates. If you are a high-volume trader, you may also be able to negotiate lower rates.

When it comes to calculating brokerage, the most important thing is to compare apples with apples. Make sure you are comparing the same brokerage rate (e.g. 1% or INR 10 per trade) and account type before making a decision.

In order to calculate brokerage using a brokerage calculator you are simply required to enter the value of purchase and sale of the stocks and the quantity of stock in units. Once you furnish the details, the calculator will display a detailed breakdown of costs involved in brokerage.

Brokerage = Number of shares bought/ sold * Price per unit of stock * brokerage (%)

Let’s take a look at the example tabulated below for a better understanding!

Quantity 20
Purchasing Price INR 1,000
Selling Price INR 1,300
 
Parameters Equity- Delivery Equity- Intraday F&O
Turnover INR 46,000 INR 46,000 INR 46,000
P&L INR 6,000 INR 6,000 INR 6,000
Security Transaction Tax INR 46.00 INR 7.00 INR 13.00
Exchange Charges INR 1.59 INR 1.59 INR 24.38
SEBI Turnover Fees INR 0.05 INR 0.05 INR 0.05
GST INR 4.43 INR 4.43 INR 11.59
Stamp Duty INR 3.00 INR 0.60 INR 0.60
Brokerage INR 23.00 INR 23.00 INR 40.00
Net Profit/Loss INR 5,921.93 INR 5,963.33 INR 5,910.38

Benefits of Using the Brokerage Calculator

Investing in stocks and shares can be a great way to grow your wealth over time. However, it's important to remember that stock market investing comes with risks. One way to mitigate some of the risks associated with stock market investing is to use a brokerage calculator.

  • A brokerage calculator can help you calculate the fees associated with buying and selling stocks and shares. 
  • This can help you to make informed decisions about when to buy and sell, and can help you to keep your costs down.
  • The calculator can be a useful tool in helping you to make decisions about your stock market investing.

Note: When using a brokerage calculator, it's important to remember that the results are only estimates. Actual fees may vary depending on the broker you use and the stock market conditions at the time.

Factors affecting Brokerage Calculation

When it comes to brokerage calculation, there are a number of factors that come into play. The most important of these is the size of the trade. Larger trades will incur a higher brokerage fee than smaller ones. In addition, the type of account being used can also affect the calculation. Understanding the factors that go into the calculation of brokerage fees is essential to getting the best deal possible.

Purchase or Sale Price

The price of the security is the most important factor in determining the amount of brokerage you pay. The higher the price, the higher the brokerage. This is because the broker needs to make a profit on the trade, and the higher the price, the greater the profit.

Type of Security

The type of security can also affect the amount of brokerage you pay. For example, stocks are usually more expensive to trade than bonds. This is because stocks are more volatile and there is more risk involved.

Size of Trade

A larger trade will usually result in a higher brokerage fee. This is because the broker needs to make more money on the trade to cover their costs.

Types of Broker

Primarily there are two categories of brokers; namely full service brokers and discount brokers.

A full service broker is a financial professional who can provide a wide range of services to their clients. These services can include everything from investment advice and portfolio management to tax preparation and estate planning.

They often have a team of specialists that they can refer their clients to for specific needs. While they  provide a lot of value to their clients, they also tend to be more expensive than other types of financial professionals. This is because they typically require a higher minimum account balance and charge higher fees.

Discount brokers are financial professionals who provide their clients with access to investment opportunities at a lower cost than traditional brokers. Discount brokers typically offer a more limited range of services than traditional brokers, but their lower fees can make them a good option for investors who are more hands-on with their portfolios.

When compared with full-service brokers, discount brokers typically charge lower commissions.

But while discount brokers can offer some advantages, they also have some drawbacks. One potential downside is that you won’t have access to the same level of personalized service and advice that you would get from a full-service broker.

Frequently Asked Questions (FAQs)

What is the formula of brokerage calculation?

Brokerage = Number of shares bought/ sold * Price per unit of stock * brokerage (%)

How is intraday brokerage calculated?

Intraday brokerage refers to buying and selling of stocks on the same day. A brokerage of 0.50% is charged on intraday trading.

Which is the cheapest brokerage in India?

Currently, Zerodha ranks first in accordance with brokerage costs. Zerodaha is followed by Upstox, Angel One, and ICICI Direct.

Is brokerage charged on both buy and sell?

Yes usually brokers charge brokerage for both buy and sell of stocks. But there might be a few exceptions where the brokerage institution only charges for either of the two.