For a trader who loves to trade in the stock market and earn a
profit with buying and selling of shares,
it is important to get the best broker. A broker is a mate for a trader in the
journey of trading. There are full-service
brokers as well as discount brokers in the market. Their titles only narrate
their importance and hence one who seeks the low rate of brokerage prefers to
go with the broker who offers a discount.
He is also called as a discount broker.
There is not the much
high number of a discount broker in India, and hence one who wants to get an
account opened with such a broker needs to search the same in the local city as
well as the platform of the internet. These brokers have limited branches,but they can offer the services to a remote
trader also with the help of online accounts. Here the trader can trade on his
own and in the case requires there are
people to support him in case of any technical trouble.
Why is the discount broker
important?
Well, as said earlier, in this market every penny is counted,and collection of such small amount
can lead to a huge and considerable amount. The discount brokers offer low
rates of brokerage,and hence one who
trades frequently can save a hefty amount which otherwise he might have spent as a brokerage to the broker. He can
reinvest such an amount and earn more profit due to increased trading regarding frequency as well as the amount. Hence from a trader point of view, this type of brokerage helps a lot to the
trader as well as the broker in the market.
The brokerage and role of a discount broker:
In the market, the
broker is paid brokerage with each trade by the client. However, it depends on
the rate of brokerage but for a trader with a huge volume normal brokerage may
be very expensive as in some cases he may hardly have small profit also. Adding to the low-profit trade, the brokerage
may wipe off the profit, and sometimes one
may have to bear the loss also. In such situation,
the high rate of brokerage is something paining
to the trader,and he may not be willing
to trade with such a broker. If the brokerage is low, he can save a good amount on this charges which can be again
invested in the market to fetch some more returns. Hence, in the long run, the
low brokerage rate can be much useful to the trader.
As there is no fixed brokerage rate in the market, the trader
seeks the brokers who do not charge high
amount. Broker with low brokerage may not be offering other advisory services,but here the trader is also not willing to have
such services as he is focused on the trading in the market only. In the
derivative segment as well as in low intraday
brokerage can be much useful to the trader in earning good profit.