Brokerage Calculator

Trading in securities involves several charges besides the purchasing price of such securities. One of the most important and predominant of these charges is the brokerage fee that a trader needs to pay to the concerned broker. This brokerage fee is the remuneration a broker receives for facilitating trade.

Typically, it is a percentage of the total trade value that is charged as brokerage. Brokers levy this fee over and above the original trade value and deduct it from a trader’s portfolio.

Such monetary outgo could be substantial depending on the scale of the trade. Therefore, several investors use a brokerage calculator to expedite the cost analysis.

What is a Brokerage Calculator?

It is an online tool that brokers and other investment platforms provide at the disposal of traders to facilitate brokerage calculation in advance of carrying out a trade. However, a brokerage calculator is not merely limited to calculating brokerage. It also calculates stamp duty charges, transaction fees, SEBI turnover fee, GST, and Securities Transaction Tax (STT).

Therefore, a brokerage charges calculator simplifies the process of calculating the cost of trade significantly. An individual would need to input the following information in an online brokerage calculator to compute their cost of trading –

• Buy/purchase price of a stock.
• Sale price of a stock.
• Number of shares to be bought/sold.
• State (for stamp duty).
• Size of a lot (for Options trading).

Such a calculator provides accurate information about such costs instantaneously, thus facilitating speedy and timely trading. Therefore, it is paramount for traders who rely on timing extensively to carry out their trades, like intraday traders. They can use an intraday brokerage calculator to ease the process of cost analysis before buying and selling securities.

How to Calculate Brokerage?

1. If 2.5% of the trade value is less than or equal to Rs.2, brokerage is calculated as 2.5% of the trade value.
2. If 2.5% of the trade value is greater than Rs.2, brokerage is calculated using the formula max(min(0.1% * Trade Value, Rs.20), Rs.2).

• 0.1% of Rs.40,000 = Rs.40
• The minimum of Rs.40 and Rs.20 is Rs.20.
• The maximum of Rs.20 and Rs.2 is Rs.20.

• 0.1% of Rs.42,000 = Rs.42
• The minimum of Rs.42 and Rs.20 is Rs.20.
• The maximum of Rs.20 and Rs.2 is Rs.20.

What are the Factors on which Brokerage Calculation Depends?

The factors on which brokerage calculations depend are –

1. Buy / sale price

One of the key determinants of brokerage commission is the buy or sale price of a single unit of security. It is directly proportional to the brokerage.

2. Volume of transaction

Another factor on which brokerage calculation, be it manual or using a brokerage calculator, largely depends is the volume of transaction. The larger the volume, the higher is the brokerage amount. Nevertheless, specific brokers reduce the percentage commission when investors trade in large quantities.

3. Type of broker

There are primarily two types of brokers in India –

• Full-service brokers
• Discount brokers

Full-service brokers provide numerous services associated with trading in securities such as researching, managing sales, imparting advice, etc. Therefore, their charges are often on the expensive side.

Discount brokers simply provide a platform for trading and charge a considerably small brokerage for that. Such brokers usually levy a flat rate that is irrespective of the scale of trade value.

What are the Benefits of a Brokerage Calculator?

The benefits of online tools like Groww brokerage calculator are –

• Investors can use a brokerage calculator to compare between brokers levying competitive brokerage commissions.
• Brokerage calculators provide accurate results instantaneously.
• It accounts for all the costs of trading.
• It is free of charge.

Therefore, traders can utilise a brokerage calculator to greatly benefit their trading process and save time on cost analysis significantly.