About Brokerage Calculator
When you trade stocks or other securities, you pay more than just the investment amount - additional charges apply. One of the most important costs to be aware of is the brokerage fee. This is the fee your broker charges for executing trades on your behalf.
Typically, the brokerage fee is a small percentage of your total trade value. It's automatically deducted from your account and added to the overall cost of the transaction.
For high-value trades, these investment charges can add up quickly. That’s why many investors use a brokerage calculator to estimate trading costs in advance. A brokerage calculator helps you understand exactly how much you’ll be charged before placing a trade, making it easier to manage your finances and maximise your returns.
What is a brokerage calculator?
A brokerage calculator is a free online tool that helps traders and investors estimate the total cost of a stock market trade before executing it. Offered by most online brokers and trading platforms, this tool provides a detailed breakdown of all applicable trading charges, including the brokerage fee, stamp duty, transaction charges, SEBI turnover fee, GST, and Securities Transaction Tax (STT).
By using a brokerage calculator, you get a transparent view of the total fees involved in a trade, allowing you to plan your investments more effectively and avoid unexpected costs. It’s an essential tool for anyone looking to optimise trading strategies and maximise returns in the stock market. An online brokerage calculator estimates trade costs using the following variables:
- Segment (Intraday/Delivery/F&O)
- Purchase price of a stock
- Sale price of a stock
- Total number of shares to be bought/sold
Automated brokerage calculations allow traders to compute trade costs instantly, ensuring speedy trades. Trading calculators are especially helpful for intraday traders who need to time their trades to capitalise on returns.
How to calculate brokerage?
As mentioned earlier, traders use intraday brokerage calculators and other similar calculators to estimate brokerage charges and understand the cost of each trade. Brokerage charges are the fees brokers collect in exchange for facilitating trades. Brokerage charges are payable both when buying and selling securities. While some brokers may exempt one of the two from charges, most levy a certain percentage of the trade value as brokerage fees. Brokerage is calculated using the following formula:
Brokerage = Number of shares bought/sold x Price of one share x Brokerage percentage (as per the applicable subscription pack)
Suppose Snehal buys 10 shares of company XYZ at Rs. 3,000 each and sells them after 10 days at Rs. 3,100 per share. She is trading through a broker who charges a brokerage fee of 0.5% on the total traded value. When these values are entered into an online brokerage calculator, the following charges and summary are displayed:
- Brokerage = Rs. 305.00
- Other Charges = Rs. 0 (for simplicity, assume no additional fees)
- Breakeven = Rs. 15.25 per share
- Net P&L = Rs. 95.00
Here’s a detailed breakdown:
- Brokerage: Rs. 305.00
- STT/CTT: Rs. 0 (assumed excluded for this example)
- Transaction Charges: Rs. 0
- DP Charges: Rs. 0
- State Stamp Duty: Rs. 0
- SEBI Turnover Fees: Rs. 0
- GST: Rs. 0
- Total Taxes and Charges: Rs. 305.00
- Net Buy Value: Rs. 30,000.00
- Net Sell Value: Rs. 31,000.00
- Points to Breakeven: Rs. 15.25
In this case, Snehal’s total trade value is Rs. 61,000 (Rs. 30,000 for buying + Rs. 31,000 for selling). The brokerage fee at 0.5% results in a charge of Rs. 305, which directly impacts her net profit.
Note: Actual trading charges can include other components like STT, stamp duty, and GST. These vary based on the broker, type of trade (equity delivery, intraday, F&O), and regional regulations.
Factors on which brokerage calculation depends
When using an equity brokerage calculator, your brokerage calculations depend on the following factors:
Buy/sale price
The buy or sale price of a single unit of security impacts brokerage calculations. Generally, the buy/sale price is directly proportional to the brokerage payable.
Transaction volume
Trading calculators estimate brokerage based on the transaction volume. The larger the volume of the trade, the higher the brokerage. However, some brokers may reduce the commission percentage on large orders beyond a certain threshold.
Type of broker
Brokers in India fall under two broad categories: full-service brokers and discount brokers. Full-service brokers charge a higher brokerage fee in exchange for the extensive range of services offered, including stock research and advice. Discount brokers, on the other hand, extend only a basic trading toolkit to traders and charge a considerably smaller fee. Usually, discount brokers levy a flat charge on every executed order rather than charging a certain percentage of the trade value.
Other charges on trading
When understanding the nuances of a brokerage calculator, it is also important to understand the other charges imposed on trades:
1. GST
A Goods and Services Tax of 18% is applicable on the service rendered by brokers.
2. Transaction fees
Transaction fees are the charges imposed on trade execution by the stock exchange and clearing corporations. These fees can vary depending on the trade value and type.
3. Stamp duty
Stamp duty is imposed by the concerned state government on the transfer of security. From 1st July 2020, stamp duty is uniformly charged on the basis of the transaction value of the trade.
4. STT
Securities Transaction Tax is applicable on the purchase/sale of each listed security, including equity shares, equity-focused MFs, and derivatives. However, STT is not levied on commodity and currency trades. STT is charged at 0.1% on the purchase and sale of equity delivery trades, 0.025% on the sale side of the equity intraday trades, 0.01% on the sale side turnover of futures trades, and 0.06% on the sale side turnover of options trades.
5. CTT
In India, a Commodities Transaction Tax is applicable on trades of non-agricultural commodity derivative contracts. A CTT of 0.01% is payable by the seller on the price at which the commodity derivative gets traded. For options, a CTT of 0.05% is payable by the seller on the option premium. For sales of options where the option is exercised, CTT is charged at a rate of 0.0001% on the settlement price.
6. SEBI turnover fees
SEBI (Securities and Exchange Board of India) charges a fee of 0.0001% of the turnover (or Rs. 10 per crore) on all purchase and sale transactions in securities.
7. DP charges
DP charges are applicable on sale transactions and vary depending on the depository in question. CDSL charges Rs. 18.50 per day per script, while NSDL charges Rs. 17.50.
How to use a brokerage calculator?
Equity calculators help traders compute brokerage charges on a trade. They help reduce the manual burden and possible errors in such calculations. To gain clarity on your brokerage fees in an instant, you can use the simple and user-friendly Brokerage Calculator by Bajaj Broking. Here’s a step-by-step guide on using the brokerage calculator:
- Step 1: Choose an appropriate subscription pack from the drop-down menu – Freedom or Professional.
- Step 2: Select the trade segment - intraday-equity, delivery-equity, futures, or options.
- Step 3: Enter the buy price.
- Step 4: Enter the sale price.
- Step 5: Input the quantity.
- Step 6: Select the stock exchange where the security is listed.
- Step 7: Click the ‘Calculate Brokerage’ option to compute the applicable charges.
The online trading calculator will instantly display the applicable brokerage fee, STT, GST, SEBI turn-over fees, and stamp duty charges. In fact, you can also review the break-even and net profit and loss amount on the trade. Assessing the charges levied and their impact on the overall profit/loss can help you decide if the trade is prudent.
Factors influencing brokerage charges
The following factors influence brokerage charges for your trade:
1. Nature of trade
Generally, brokerage charges vary depending on the type of trade in question. Intraday and delivery trades are the two major types of trades in the stock market, and the brokerage cost for each varies.
2. Traded securities
Brokerage charges may vary depending on the securities traded. Equity, derivatives, commodities, and others may have different fee structures.
3. Trade segment
The market comprises different trade segments, such as derivatives, spot/cash, etc. The brokerage fee charged may depend on the segment where you place the order.
4. Asset price
Some brokerage calculations are based on a certain percentage of the total turnover of a trade. In such instances, the asset price becomes one of the chief factors influencing brokerage charges.
5. Trade volume
The asset quantity in trades plays a crucial role in determining the applicable brokerage charges. Larger trades often attract higher brokerage fees, especially under a percentage-based system.
6. Frequency of trades
Brokerage charges are often determined by the number of trades executed. Depending on the brokerage firm in question, traders can subscribe to volume-based plans, where the more they trade, the less brokerage they pay.
What are the benefits of a brokerage calculator?
A brokerage calculator is a free online tool that helps traders estimate the total cost of a trade quickly and accurately.
- Compare brokers: Easily compare fees across different trading platforms.
- Instant results: Get accurate cost estimates in seconds.
- Full cost breakdown: Includes brokerage, taxes, and other charges.
- Time-saving: Simplifies cost analysis, helping you make faster decisions.
Using a brokerage calculator can streamline your trading process and improve financial planning.
