Open Free Zero Brokerage Demat Account
+91
T&C and privacy policy
Brokerage Calculator

How to Calculate Brokerage in the Share Market?

When you buy or sell shares through a stock exchange, there are quite a few fees and charges that you would have to pay for every transaction. Among the many different charges, brokerage is by far the most significant. Therefore, it is important to learn how to calculate brokerage in the share market to make informed decisions.

Brokerage is basically a fee that stockbrokers charge for enabling you to place trades on the stock exchange through their trading portal. Depending on the stockbroker with whom you’re associated, you might have to either pay brokerage as a percentage of the total trade value or as a flat-rate fee for every successful trade.

Brokerage is payable only on successfully executed trades. If you have any pending or unexecuted trades in your order book, then you won’t have to pay any brokerage on these transactions, until after they’re executed. Also, brokerage is payable on both buy and sell orders on delivery and intraday trades.

Ways to Calculate Brokerage in Share Market

Calculating brokerage for any given trade is exceptionally easy and takes only a few minutes. Here’s a quick look at how you can do it manually.

Brokerage as a percentage

Many stockbrokers, typically full-service brokers, levy brokerage as a percentage of the total trade value. Depending on the broker, brokerage can range anywhere from 0.05% to 0.5% per trade.

Let’s take up an example to see how you can calculate brokerage under percentage fee model.

Say you want to purchase 100 shares of Reliance Industries Limited. The current share price is Rs. 2,400 per share. Assuming a brokerage of 0.05%, the total brokerage payable comes to be Rs. 120 (100 * Rs. 2,400 * 0.05%).

Now, assume the stock price rises to Rs. 2,500 per share on the same day. You wish to sell your shares for a profit of Rs. 100. Here, the brokerage you would have to pay comes out to be Rs. 125 (100 * Rs. 2,500 * 0.05%).

The total brokerage payable for this intraday trade would be Rs. 245 (Rs 120 for the buy order and Rs. 125 for the sell order). This fee would be deducted from the profit of Rs. 10,000 (Rs. 100 * 100 shares) leaving you with a net profit of Rs. 9,755.

Brokerage as a fixed fee per trade

Let us now calculate how brokerage will be calculated on a fixed fee per trade model.

Assume you want to purchase 100 shares of Tata Motors Ltd., currently trading at Rs. 400 per share. Your stock broker charges a flat fee of Rs. 20 per every successful trade. So, irrespective of the trade value, the total brokerage payable on the buy transaction is only Rs. 20.

When you sell these 100 shares of Tata Motors Ltd., you will have to again pay a brokerage of Rs. 20 for the trade. So, in this case, the total brokerage payable comes to Rs. 40 (Rs. 20 + Rs. 20). There is a difference of nearly 16% between fixed fee brokerage and percentage brokerage model, which only widens as the number of trades increase.

Conclusion

This should give you more clarity on how to calculate brokerage in the share market. Before you place a trade, it is always a good idea to ensure that you know what the brokerage for the trade is likely to be. While flat fee per trade is the better option compared to percentage brokerage, the best option is zero brokerage with m.Stock.

m.Stock offers zero brokerage for life across all products at a minimal one-time fee. With m.Stock, you benefit from superior technology and 25 years of global plus 16 years of Indian expertise. Calculate your humongous savings with m.Stock and make the smarter choice today!

Frequently Asked Questions

Yes. In addition to the brokerage, you would also have to pay other charges like GST, Securities Transaction Tax, SEBI turnover fees, and stamp duty charges, among others.

Flat-rate brokerage may be better since the fee is fixed and doesn’t vary depending on the trade value. Also, you get to save quite a lot on brokerage, especially if you make high-value trades quite often. But the best option is zero brokerage with m.Stock.

Yes, Mirae Asset’s m.Stock is leading the broking revolution in India with its zero brokerage proposition. You pay zero brokerage across all products for life at a one-time fee.

No. The brokerage is a non-refundable fee.

No. Brokerage is applicable for all other segments like derivatives (F&O), currency, and commodities as well.

Yes. Some stock brokers allow you to switch brokerage plans. To get more information on this, you can always get in touch with your stock broker.

No. Brokerage is applicable on both purchase and sale transactions

More Related Articles

Non Repatriable Demat Account

23 June,2023

What is Non Repatriable Demat A/c?

In India, there are three different demat account types - non-repatriable demat accounts, repatriable demat accounts and regular demat accounts. Both the non-repatriable and repatriable accounts are exclusively for Non-Resident Indians (NRIs), whereas regular demat accounts are for Resident Indians.

Demat Account Opening Process

12 June,2023

Step-by-step Process for Opening Demat Account Online

In today's digital age, the demat account opening process has become a convenient and efficient way for investors to hold their securities in electronic form. A demat account eliminates the need for physical share certificates and offers a seamless trading experience. This blog will guide you through the step-by-step process of opening a demat account online, ensuring a hassle-free and secure experience.

How to Link Aadhaar with Demat Account.

12 June,2023

A step-by-step guide to link Aadhaar with demat account

Investing in the stock market comes with certain statutory requirements which you as an investor must adhere to. The market regulator, SEBI, has made it mandatory for brokerage firms to link the Aadhaar number of their customers with their demat accounts. Demat accounts not linked to aadhaar will not be able to transact securities until the investor links both accounts. Hence, the depositories NSDL and CDSL have set up procedures for the linking of Aadhaar to demat accounts.

Open your Lifetime Free Brokerage Account Onboarding in just 5 minutes**

+91
T&C and privacy policy

Power your investments with our smart trading platforms

  • 8 million+
    App downloads
  • 4 Star
    Rated APP
  • 1-Click
    Order Placement
  • 1,316 Crore+
    Average Daily Turnover