What is a low brokerage trading account? If you're trading on the market for shares then you'll surely know the amount of commission the stockbroker is charged for each trade. An investor is bound by law to give a predetermined percentage to his/her stockbroker, called brokerage on every transaction even if it results in a loss. These brokerage charges resulted in reducing the profits of the investors by a huge margin.To combat this problem Better brokerage companies created accounts for trading with lower brokerage. If you're trading on the market for shares You will be aware of the commission percentage your broker is charged for each transaction.
What is a low brokerage trading account? The lowest brokerage account for trading is the one that has the lowest cost of brokerage. It is probably the least in the marketplace. Many of the top online brokerage firms have created the amount of their brokerage which is extremely affordable when compared with other traditional brokerage companies. To address this issue the better brokerage firms have come up with an account for trading that has a low cost of brokerage.
If you sign up for an account with a low brokerage and you don't need to pay high commissions on every transaction. In the majority of cases an account with a low brokerage account means that you're paid a flat rate for transactions, instead of paying a percentage of the earnings to Your stockbroker Low brokerage trading account vs. a commission trading account The commission-based trading account If you trade with an account that has an arrangement for commissions and you are always paying more to the broker because the commission percentage is typically excessive. Look at the following example: Scenario 1 You purchase 1000 shares of the corporation ABC for Rs. 500 each using the commission-based trading account. In the event that the rate of commission falls to 0.50 percent or less, you will need to pay a minimal commission of 2500 Rs. The result will reduce your profit by 2500 or make your losses worse in exactly the same number. Scenario 2 It is possible to purchase 1,000 shares of the company ABC at 500 rupees per share using an account with a low brokerage that charges a flat rate for each transaction of 10 rupees. Whatever your losses or profits, whatever your losses or profits, you'll have to pay only Rs 10 instead 2500. The amount you pay for brokerage will increase with the size of the transaction. The larger your order size, the greater rate of commission. With a low brokerage account You only pay 10 regardless of the amount of the transaction. Benefits of a low brokerage trading account ● You pay a flat fee or very low brokerage instead of paying a huge chunk of your profits.
● A low brokerage trading account doesn't increase your burden by a hefty margin in case there is a loss in your transactions. ● You don't have to calculate your commission every time you make a deal in the share market
How to open a low brokerage trading account? There are only a few good online brokerage firms that offer a low brokerage trading account. You will have to hire an online brokerage firm offering the facility of a low brokerage trading account. Once you hire a brokerage firm, you will have to fill an account opening form and attach certain documents for identity and address proof. After all the formalities are done, you can start trading in the Indian stock market without worrying about paying a huge commission on your trades. You can open an online trading account in 5 simple steps by visiting our website https://www.lkpsec.com/Home.aspx.