For every trade you make in the stock market, you will have to pay a certain fee. It is known as brokerage charges. The brokers levy these charges for carrying out your trades on the stock exchange. Further, brokers deduct these charges from your trading capital.
So, to calculate these charges, you need to have a brokerage calculator at your hand. Many traders and investors use a brokerage calculator to get a better idea about the costs they will have to incur for the trades they are planning to take.
What is a Brokerage Calculator?
A brokerage calculator is an online tool that brokers provide for calculating the brokerage levied on each trade. Apart from that the brokerage calculator also calculates other charges associated with a trade such as SEBI turnover fee, stamp duty charges, securities transaction tax, and GST.
How to calculate brokerage?
To calculate brokerage charges, you need to enter a few details such as:
- The type of trade.
- The trade segment.
- Buy and sell prices.
- The volume of shares.
- Name of the exchange.
Once you enter all the details, you need to click on calculate, then the brokerage calculator will show the results of the total brokerage that you will have to pay on that particular trade.
Further, the brokerage calculator also calculates and shows the other types of charges including GST, STT, turnover charges, and stamp duty.
The brokerage calculator uses a formula to calculate the brokerage. Which is as follows:
Brokerage = Number of shares sold/bought x Price of one unit of stock x brokerage percentage
The process of calculating the brokerage manually can be very complex, therefore you can use the online brokerage calculators provided by different brokers. Also, this formula will only help in calculating the brokerage charges. But, the brokerage calculator will also show you the other charges associated with a trade such as GST charges, STT charges, and more.
Key factors that determine brokerage charges
1. The type of trade
There are two types of trades – delivery and intraday. The brokerage charges and other charges levied by brokers vary for both of these. So, your brokerage calculation and the results will depend on which type of trade you are planning to take.
2. The price of the asset
The brokerage charges levied by some brokers are in percentage of the total turnover of a trade. For this, the asset price such as delivery share price or intraday share price is taken into consideration for calculating brokerage.
The volume of trade largely impacts the brokerage levied on the trade. If you trade in large volumes the brokerage charges will be more.
4. The trade segment
There are different trade segments in which you can trade. Such as the cash segment and derivatives segment. The brokerage charges will differ for these segments.
Benefits of brokerage calculator
- It gives you a better idea of the prices involved in the trade
The brokerage calculator helps you get a better and clearer idea of the costs involved in a particular trade and hence it also helps you in making informed decisions about trades.
- It helps you decide the target price of the trade
The target price of the trade is the price on which you are planning to exit a trade. The target price should cover all your trade costs along with profit. So, with a brokerage calculator, you can calculate the costs and then decide the price at which you would exit a trade.
- You can compare the brokerage of different stockbrokers
If you have not yet chosen a broker, the brokerage calculator might be very beneficial to you in terms of comparing the brokerage of different brokers. By doing this comparison you can decide which broker is offering the lowest brokerage charges.
- It is free to use and gives accurate results
The brokers do not charge brokerage calculator prices and they are often free to use. Further, the brokerage calculators provide accurate and instant results. They calculate all the costs involved in the trade.
FAQs – Brokerage Calculator
1. Can I use a brokerage calculator before finalizing my trades selected through the NSE option chain?
Ans: Yes, you can use the brokerage calculator even for options trades such as trades selected through the NSE Nifty option chain.
2. What is NCL Research’s share price today?
Ans: Today’s share price of NCL research is 0.69 INR.
3. How to use brokerage calculators?
Ans: To use a brokerage calculator, you first need to go to the website of the brokerage calculator provided by your broker. Then you can follow the above-mentioned steps in the section ‘How to calculate brokerage charges’.