Trading in stock market in a right manner can be immense helpful to those who know how to trade. One can earn as much as he wants and get best business at a limited investment. However, it does not mean that one can earn easily as he needs to take risk and also research well before investing in the market. The foremost important step for such trader is to get a trading account opened with any of the authorized broker in the market. One needs to go for the lowest brokerage trading account as it can only help him earn well and as required. Before going for such account one needs to know what the brokerage is.
The accounts and process to open them:
One needs to have two types of accounts here for trading in this market. He must have a Demat account and a trading account. The Demat account is to keep the shares in while the trading account is for trading purpose. It is not necessary that one has to go for the demat account with the same broker with whom he gets the trading account opened. To open these accounts one needs to provide relevant information in a prescribed application form and submit the same with necessary documents to the broker. It takes a few days for the broker to open these accounts. One can start trading after the opening of these accounts only.
Brokerage is an income to the broker and expense for the trader. There is no standard pattern or rate for brokerage in the market and hence everyone goes for the same as per own terms and conditions. Usually the brokerage is provided with the bill and it is in the form of a fixed rate. However, there are also some brokers who take the brokerage in advance and in a lump sum. Some brokers also go for the brokerage in a fixed amount form. They take the brokerage as per the turnover of the trade. Hence the style and amount of the brokerage vary with the broker.
Get the best deal:
For normal traders the high rate of brokerage does not create any trouble but this is not the case with the bulk trader. A bulk trader has to get discount in brokerage and hence he checks for the lower rate of brokerage or a broker who can offer discount in brokerage. The trader who trades in bulk has to keep many factors under check and hence he needs to have low rate of brokerage. He may have to get the trade square off in loss also and hence higher rate of brokerage can be tough for him to go for.
For the bulk traders it is necessary to find the deals that can help them earn more or save on the part of brokerage. They can go for the brokers who can offer brokerage rate with discount due to their large volume and trading style.