What is a brokerage calculator?

Do you possess a great vim for trading? Are you also a core heart lover of investing? If that’s so then you must be aware of all the paramount things related to trading and investing. Like, you must know about all the prominent brokerage houses, alluring shares and all. Buy, along with that you must also be aware that apart from the price of the share you purchase you also have to pay some of the other charges as well. Yes, there is a list of charges that you pay other than the straight amount of the share you buy.

One of the paramount charges in this list are the brokerage charges. A brokerage charge is a fee that is charged by a broker to execute transactions or to provide specialized services. Brokers charge brokerage fees for a myriad of services such as purchases, sales, consultations, negotiations, as well as delivery.

Practically speaking, it is a percentage of the entire trade value that is charged as brokerage. Brokers impose this fee over and above the actual trade value and subtract it from a trader’s portfolio.

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

Let us just have a detailed analysis of the whole process of the brokerage calculator in this article and answer the questions such as, what is a brokerage calculator? How does it calculate brokerage? Etc.

Let’s begin!!

What is a brokerage calculator?

Brokerage calculator is an online device that brokers as well as the other investment platforms deliver at the disposal of traders to stimulate in advance brokerage calculation of carrying out a trade. However, a brokerage calculator is not just limited to calculating brokerage of the broker. It is also useful while calculating other things such as stamp duty charges, transaction fees, GST, SEBI turnover fee, and Securities Transaction Tax (STT).

Accordingly, this calculator of brokerage charges simplifies the procedure of calculating the cost of trade considerably. to compute the cost of trading an individual require to input the following information in an online brokerage calculator-

• The stock's buy/purchase price.

• Sale price of the stock.

• The number of shares that are to be bought/sold.

• State (for the stamp duty).

• The lot size (or Options trading).

How are the brokerage charges calculated?

Investors require to pay brokerage fees both the time while selling the securities as well as while buying them. Nonetheless, specific brokers may deem to exclude one event from any kind of charges.

Nevertheless, a multitude of brokers impose a certain percentage of their trade value as their brokerage charges. Depending upon the scale of trade value, such percentages may differ. Regardless, the formula for calculation of brokerage in the stock market is shown below.

Brokerage = Number of shares sold/bought x Price of one unit of stock x brokerage percentage

Example:-

Suman determines to purchase 20 shares of Hindustan Unilever Limited at the price of Rs.2000 each, and within the 10 days, she trades those off at Rs.2100. She does it through a Broker Z who charges 0.5% as brokerage fees.

In this example, Suman’s total trade value occurs to be:

Rs. [(20 x 2000) + (20 x 2100)]

Or, Rs. (40,000 + 42000) = Rs.82,000

Since Broker Z charges 0.5% as brokerage, the total fee she pays to the broker is:

Rs. (82000 x 0.5%) = Rs.410

Therefore, Suman would pay only a sum of Rs.410 as a brokerage for carrying out the transactions worth Rs.82,000. However, if she accompli, year, shed a transaction on which brokerage by standard means is too low, then a broker would have charged the minimum amount applicable only, which is generally Rs.20 – Rs.30.

Nevertheless, to simplify this monotonous method of calculating brokerage, individuals could take into use a stock brokerage calculator.

Note: You can Calculate the brokerage through Upstox Brokerage Calculator for Free.

What are the factors upon which the calculations of brokerage depend?

While calculating the brokerage charges for the customers, a lot of factors are there depending on which device calculates the brokerage. Well, these factors are listed below.

1. Sale/Buy price

One among the paramount determinants of brokerage commission is the buy or sale price of a single unit of the security. This is directly proportional to the brokerage.

1. Translation Volume

Another factor on which brokerage calculation depends majorly, be it manual or using a brokerage calculator, is the volume of transaction. The greater the volume, the higher will be the brokerage amount. However, certain brokers lessen the percentage commission when investors are trading in huge quantities.

1. Type of the broker

There are chiefly two types of brokers that are found in India, these are:

• Full-service brokers

• And, Discount brokers

Full-service brokers are the ones that provide various services that are associated with trading in securities such as researching, imparting advice, managing sales, etc. Hence, their charges are frequently on the expensive side.

Discount brokers are the ones that simply give a platform for trading and charge a considerably small brokerage for that is very reasonable for the customers. Such brokers generally impose a flat rate which is irrespective of the scale of the value of trade.

What are the advantages of a Brokerage Calculator?

Tools like a brokerage calculator are always a thing that comes as a divine help to ease the tedium processes like calculating the brokerage of the customers. Let’s have a glimpse at some of the rejoicing benefits we can avail from the use of this calculator-

1. Firstly, the Investors carrying a vim for the trading can use a brokerage calculator to compare between the brokers imposing competitive brokerage commissions.

2. The biggest merit of Brokerage calculators is that it gives accurate results instantaneously.

3. The brokerage calculator accounts for all the costs of trading.

4. Lastly, It is free of charge. No fees are there to use the brokerage calculator.

Wrapping up

So, after reading the whole article the one can easily conclude that in the hustle and bustle of life where time is considered to be as precious as money, brokerage calculators come as a great help for all the enthusiasts of the reading world. Whether, it’s the customer investors or the broking house itself, the brokerage calculator helps the both in calculating the whole charge they are required to pay or receive swiftly. This makes the ennui of rough calculation way too easy.

So, if you are stepping into the trading world, then do have a proper information regarding the brokerage calculator as it will be your greatest asset in providing you with a handsome amount of profits while trading.

Happy (and smart) investing!!

S. Vishwa is web marketing analyst at Finology Ventures. With 5+ years of web marketing experience, joined a Fintech company to help people to learn and earn more.