Lets have a detailed understanding of Brokerage Calculator, how it works, how can a prospect use it to compare brokerage & other charges levied by various stock brokers.
List of Stock Broker Brokerage Calculator
What is a Brokerage Calculator?
Our brokerage calculator utility helps in computing not only the brokerage chargeable but even other charges that are levied apart from the brokerage while undertaking trading transaction in the market.
The utility computes the total cost that one would incur while undertaking the trade transaction.
Inputs required by Brokerage Calculator
The inputs required would be very basic details i.e. buy price of the stock, the sell price, number of shares and the state in which the account is held. Based on these details, the calculator tool will compute the brokerage payable and the other charges payable which form part of the cost base for the trader.
Some of these charges are even separately disclosed in the contract note whereas some of them may be simply added to the other charges.
All Charges computed by Brokerage Calculator
The utility computes the brokerage, SEBI turnover fee, transaction charges, stamp duty (each state has a different rate of duty and hence this is one of the input field), securities transaction tax and GST.
Why Brokerage Calculator is important for a Trader?
The calculator utility is of utmost relevant for any trader. It not only helps him computes the cost involved but also helps him minimise the cost and maximise the net profit. The paras below discuss a few perspectives on this.
Most important of all, the utility would help a trader/Investor in comparing the brokerage rates of all the brokers and analyse which broker offers the most favourable rates to suit the trader’s strategy. For instance, if the trader is a newbie and does not want to trade in high quantities, he may choose a broker who offers brokerage based on quantity thus helping in keeping a minimum cost base for the trader.
Similarly, if a trader holds trading/DEMAT account with multiple brokers, then he can evaluate that which broker firm would charge him lesser for his potential/planned trade transaction. Thus, the calculator utility can help the trader/investor in evaluating the best suitable broker.
Why Brokerage Calculator is a useful tool?
This calculator is a very useful tool for the traders and investors as it helps them in having an understanding of the approximate cost that they would incur for a certain potential transaction.
Having an idea of the cost leviable, helps them in deciding whether the potential transaction would reap material benefit or is it that the profit earned would be set off by the cost involved in the transaction. Thus, the trader/investor gets to test his strategy.
The other perspective is planning – herein, one uses the calculator utility to evaluate the buy/sell price at which the desired profit (net of cost) would be achieved.
This would require the trader to use certain permutation and combinations of potential buy/sell prices and analyse the net profitability achievable at each of such price. In this, one can also play with the quantity of buy/sell quantity.
Brokerage Calculator Conclusion
So, the above discussed were a few of the major benefits & uses of a brokerage calculator. Lets explore this utility with the links provided below.