A brokerage calculator is used to calculate the charges levied while executing a trade. Brokerage calculators are easily available online on various platforms. These are very productive tools as one can check other kinds of charges such as stamp duty fees, GST fees, or transaction fees. Brokerage calculators are usually quite accurate. Getting a good idea of charges involved in a short time is crucial for executing trades in the share market. It helps investors know the exact costs involved in a transaction. Hence, let us cover every aspect of the best brokerage calculator in this article. Also, we shall see how to put it to best use.
An investor or a trader is liable to pay several charges when he buys and sells securities. The brokerage fees are a prominent one among them. One has to pay brokerage charges to his broker. So, before looking at how brokerage calculators work, it is essential to learn about brokerage charges.
Brokerage Charges and the Factors Affecting it
Brokerage firms levy a certain amount of fees in return for the services. They charge traders or investors to facilitate their trades. One needs to pay a brokerage fee both while buying and selling an asset. Most stockbrokers decide the number of charges on the trade value. You will have to pay a certain percentage of the cost of securities as brokerage fees. Putting it as a formula, we will have;
Brokerage = volume of shares transacted/ value of one share* brokerage percentage
Following Factors Determine Brokerage Charges
1.Value of a transaction: The price of one unit of security while buying or selling it is a key factor on which brokerage charges depend. Brokerage charges are directly proportional to the price value of a trade.
2.Number of units bought or sold: The volume of securities involved in a specific transaction affects brokerage fees to a large extent. Charges increase with the increase in the number of units transacted. However, you may avail some discounts with certain stockbrokers if you deal in greater volumes.
3.Type of broker: A firm one chooses is crucial as different institutions have different pricing models. There are two types of brokers full-time and discount brokers. Full-time brokers provide financial advice along with brokerage services.
4..Discount brokers do not offer any such facilities. For instance, Kotak Securities provide investing facilities on their platform. In addition, one gets suggestions and recommendations on their online stock trading app. Hence, brokerage charges vary based on the services an institution provides.
How Does a Brokerage Calculator Work?
You are well aware of brokerage charges and the factors a brokerage calculator takes into account for brokerage calculation. Let us thus now focus on how a brokerage calculator functions to give our desired results. Numerous financial institutions, including many stockbroking firms, offer brokerage calculators online. To facilitate easy transactions for their customers, they design these tools and make them publicly available online. A brokerage calculator can help you know about all the charges included in a particular transaction. Here are the charges a brokerage calculator allows you to find out.
Stamp duty charges
Security transactions tax (STT)
SEBI turnover fee
To calculate brokerage charges using online brokerage calculators, you must enter relevant data that includes the following.
Purchase or sale price of a security
Quantity of traded assets.
Segments such as equity, currency, options, commodity, cash, or futures
Type of trade like intraday or delivery
Name of Stock exchange
Many brokerage calculators also enable you to calculate the charges levied on transactions of various types of assets. The best brokerage calculator in this regard shall be Kotak Securities. It provides details of charges for all types of securities. These include stocks, commodities and options, currency, and intraday delivery.
To use the brokerage calculator, go through the steps given below.
1.Go to the webpage of Kotak securities brokerage calculator. Simply search for it on the web, and find its link.
2.Choose the particular security you want to place your trade.
3.Next, select the order type, buy or sell. A drop-down box will appear, where you have to enter your choice.
4.Now, specify the quantity of that asset.
Finally, mention a price range where you want the trade to get executed and click on calculate.
The brokerage calculator will show you the brokerage details in a few seconds. You will have to pay the displayed amount as brokerage fees for the particular transaction.
Why Use Online Brokerage Calculators?
Automated online brokerage calculators are quite useful. Some key advantages to list are as follows.
We get precise results.
1.They are beneficial in comparing different stockbrokers. As brokerage fees vary from broker to broker, one can find the one offering services at low costs.
2.These calculators save time. Calculating brokerage manually is a time-consuming activity. These calculators work very fast and provide instant results.
3.In addition, the best brokerage calculator, like Kotak Securities, is free.
So, you can easily cut down on a lot of effort and time using an online brokerage calculator. You need not have to spend hours analyzing costs on trade.