Daytrading brokerage optimisation

stocks and trading basics

Brokerage Charges On 5paisa.com

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Gents,

MY MOTTO
MINIMISE TRADING COSTS, MEANS BROKERAGE AND TAXES!!!

When you daytrade,brokerage is the most important part of costs.

The cost of trading normally consists of

brokerage charges
service charge on brokerage charges
STT transaction tax
other charge=regu charge
stamp duty at the end of each month
costs of demat account related stuff
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In this I just cover daytrading expenses on indiainfoline.com
or 5paisa.com

Suppose you bought and sold 270 shares of infosys on sameday.
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summary
270 share bought at 2791.01
270 share sold at 2799.40
TURNOVER=1509412 RUPEES
price diff 2268
brk plus tax 1126.02

net gain to hand 1141.978648

COST DETAILS
I) BROKERAGE
A)BROKERAGE FOR BUYING=376.2
B)BROKERAGE FOR SELLING=378.6
TOTAL=A+B=TOTAL BROKERAGE(NO TAX)=754.8
II)Regul charges=90.56
III)S T T (security transaction tax)=189
IV)Service charge on brokerage amount at 12.2%=92.38

TOTAL CHARGES=brokerage plus all taxes=754.8+90.56+189+92.58=1126.02
If you made 2268 apparent gain due to price difference, in that you have to pay about 50% towards brokerage plus taxes.
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OUT OF THE GAINS YOU MADE,WHEN YOU TRADE INFOSYS
50% you keep, and 50% you pay broker.
EQUAL SHARING, WOW, VERY DEMOCRATIC INDEED!!!!!!!!!!!!

YOUR BROKER GETS RICH BECAUSE OF YOU IN THIS WAY IF YOU TRADE.

you get just 1141.98 rupees in your hand
By the way what is the brokerage plus tax as percentage?
% brk+taxes all included=100*(1126/1509412)=0.07465%
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For Every 100 rupees worth of shares you buy or sell,
you pay 7.46 paisa as brokerage plus tax.
Two points to note here are

1. The higher the share price, the higher brokerage you pay(0.05%)
2.The more the brokerage,the more the service tax(12.2% of brokerage)
3.The higher the share price, higher is the turnover and hence more STT you
pay (0.0125% of turnover,turnover being buy+sell tradevalue)
4.There aRE OTHERS REGU CHARGE AT 0.006% of turnover
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Try tro do things differently, and see

nOW iF YOU SELECT A LOW PRICED SHARE LIKE mARUTI, LET US SEE
ther cost

If YOU trade 270 maruti shares,for 5 rupees price diff
buy270 Shares of maruti at 700 =189,000
sell 270 shares of maruti at 705 =190,350
TRADING Turnover =379,350
PRICE DIFF=705 LESS 700 MULTIPLY BY 270 SHARES=5*270=1350 RUPEES

fOR BUYING+selling =brk+tax =282.9951

tOTAL BRK PLUS TAX= Rupees 283

price diff =apparent gain excluding tax=1350
deduct brokerage plus tax of 283
net gain to hand =1067.0049

Here you made 1350 and in that you paid 29% to broker as total costs
79% of your apparent gain is in your hands.
In this way if you trade , you become rich.

you take 79% and you give out 21% as trading costs.
MORAL= SELECT LOW PRICED STOCK IN STEAD OF HIGH PRICED ONE.
PAY LESS OF BROKERAGE,LESS OF SERVICE TAXES,LESS OF STT AND LESS OF OTHERS. OF COURSE ALL FOR THE SAME PROFIT!!!!!
tHIS IS LIKE A BUSINESSMAN.

CONCLUSION
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I PREFER TO STAY AS BUSINESSMAN AND MINIMISE MY COSTS.
I WANT TO BECOME RICH,
I DONT WANT MY BROKER TO GET RICH BEFORE I BECOME RICH.
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Tip;
If you dont read posts by Ramesh151, You miss a lot!!!!!!!!!!!


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NOw I wait to see the similar info from any customer of icicidirect.com, which by the way the most expensive and least profitable in margin trading.
Anybody come forward to prove ,me wrong?I dont think so, not in the near future.
why?
The fact the guy is using ICICIDIRECT SHOWS how much careful he is with his money. He is already making his broker rich, yeah,at least till today.
why not tomorrow?
because if he reads this post, he will wake up and --------------.

shiv khera says
YOU CAN WIN
Winners dont do different things. winners do things differently.

By the way, do you want to win? or WAITING FOR NEXT MONTH,NEXT YEAR ETC?