I propose you a new way to charge the brokerage. The Rule is Simple,
"For an Intraday trade, Brokerage Will Only be charged if the Trader has achieved a winning trade!".
At least for intraday traders who always have a continuously nagging feeling, in which this brokerage loss stops them from exiting a trade at entry price.
Other than OR In addition to 60 days challenge what Zerodha / Trader Friends Feel for above proposal. Please share your View.
I don’t think the intraday traders would have nagging feeling becos of brokerage loss in Zerodha. Brokerage of (20+20)Rs amounts to movement of 1 to 2 pts for Index Futures/Options, 0.1 to 0.5pts for Stock Futures/Options, 1 to 2pts for Equity Margin. How can anyone have a stop loss of this much low pts for intraday trade!
I don’t like the proposal as it adds another factor to a trader’s mind to make any premature trade exit.
Have you been on a jungle night safari Vishy?
There is no guarantee that you will spot wild animals, but there are efforts spent to ensure the best possible results. For example - you are driven around in a four wheel drive, best experienced drivers, jungle guides to navigate the terrain, powerful torch lights etc.
One has to pay for these logistical efforts irrespective of the outcome your experience.
Likewise with brokerage :)
The broker responsibility is to provide a smooth setup so that traders can trade without problem. For maintaining this setup, there are lot of efforts and expenses from the brokers side. Brokers profit is what is left after these expenses. If broker gets paid only for winning trades, they will have to provide the setup free for all the loosing trades. Ultimately their profit will depend on the traders and broker can become bankrupt if there are lot of bad traders.
Dude, there are running operational costs which has to be taken care of, and secondly 20 or 40 bucks is peanuts, when you trade. I think Zerodha has the lowest brokerage among the competition, further more their service and platforms (like QnA, n Zconnect) are really good.
Brokerage is only a small portion of your other charges.
There are totally 8 charges you need to pay, one among that is brokerage.
- 1. Securities Transaction Tax - mandatory by NSE
- 2. Transaction charges - mandatory by NSE
- 3. Service tax - mandatory by NSE
- 4. Education Cess - mandatory by NSE
- 5. Higher Education Cess - mandatory by NSE
- 6. SEBI Charges - mandatory by NSE
- 7. Stamp Duty - mandatory by NSE
- 8. Brokerage - This is what charged by zerodha
If you just do the math, STT and Stamp Duty will be major portion of your other charges, which cannot be removed. I think already zerodha is offering the best possible brokerage in the market.
So I think your idea is not good at all.
Your idea has the underlying assumption that brokers can sustain with the brokerages from winning traders. But you are not aware of the fact, that most of the traders are losers and only a portion of them really ends up in profits contnuously. Almost all revenue for broker comes from losing trades.
Tomorrow you will say broker should repay losses if a client makes losses trading through him. Cmon man, be realistic…
@vishyvishy…If you do start a brokerage with those conditions and with all the other benefits that zerodha offers. Then me along with the other members who contributed to this thread will be the first few ones to join
Forget about the nagging feeling etc., what do you think about the proposal of charging brokerage only on winning intraday trades ?
Your point is on Moral ground, that if you take any service you should pay for it. This is obvious. I don’t deny it. My point is on practical ground. Say if after using above mentioned brokerage plan if trader has possibility of earning more and due to that earning his future position sizes of trade getting bigger which in turn paying his broker more and more then what is harm in that. In this case both trader and broker go on profiting all the way. Only thing is broker gives an extra hand for trader to grow. It is a short sacrifice which may give broker a long term fruits to the broker. Every broker must strive had to keep his traders alive so that they keep generating more and more for him. I wish to here what is wrong in the mentioned idea other than loss of brokerage in losing trades.
No vishy, I was trying to highlight a commercial point here. There is a huge amount of infrastructure, manpower and other variables involved just so that our transaction goes through smoothly. Weather a trader makes money or not…there are costs incurred by the service providers.
very nice example to explanation karthik sir.
Yes,. that is worst possible scenario . But I still feel zerodha should experiment this with a group of selected traders – better may be the 60 day challenge winners ! – give them this trading plan, to see how it comes out over a period of time.
[quote] Zerodha has the lowest brokerage among the competition, [quote] — well RK Global has 18 rs. per trade per lot and their service also not bad. there is some other broker who offers 16 rs, per trade. some other as 1947 rs. per moth fixed brokerage plan for month. some other has rs. 9999/- unlimited plan per year and so on … there are many lucrative brokerage plans — but what is the ultimate brokerage plan for a (winning) trader and broker… I see above one as one of the many beautiful plans which may proposed…