For every client who wants to make some quick money from the market, to go for intraday trading is the best option. Therefore it is important and much required to go for a trading account that offers some services and lowest brokerage.
For a day trader to watch, the brokerage rate is very important. Usually, there is the standard rate that a majority of the brokers follow, but there is fixed rate, and hence every broker or broking firm offers various rates. As it is a charge for a client, it is much important to keep it low so that the profit can be maximized or the loss can be minimized.
The brokerage is of two types: One is regular, and another is advanced. In the regular brokerage, the client needs to pay a certain amount as a percentage or a lump sum amount on every trade while in advanced brokerage the turnover is considered as the amount and accordingly to certain amount of turnover the brokerage is taken in advance only. In some cases, it is for the time duration also.
To get the account with discount brokers India one needs to go for a little research and check who all can offer the lowest brokerage. One can enter into bargaining with various service providers at a time and check who can offer the best of the service with the lowest brokerage. Many service providers offer the discounted brokerage to the client in some situations which are as under:
- The new branch: In case the broking company or the broker places a new branch, the requirement of more clients is obvious and hence to turn the branch into a profit-making unit, the brokerage rate is reduced. Hence the traders in the concerned area can take the benefit of the low brokerage rate. It is a win-win combination for the clients as well as the service provider.
- New area: If the area is new for the broking company or the broker where the rivals already have penetrated the market and got many clients, to get the stepping stone, the brokerage rate is used as an attraction. The clients of the rivals who already trade at a higher brokerage rate may immediately move to the new service provider who can help the unit to earn revenue from the beginning of the business in that area. However, in majority cases, such situation is for limited months only.
- Competition: To reduce the competition and outwit the competitors the broker or broking company may reduce the brokerage rate which can help it to have an upper hand in the competitive market also. Many times this policy is used to get cream class clients from the market who have a huge turnover on a daily basis.
- Advanced brokerage: The advanced brokerage is the charge that the broker levies in the initial stage only. Hence it can help the client to have more turnover at low charges while the broker also gets required brokerage in an early stage that makes him sure about the future of the unit.