Calculating Brokerage on the Fly

A user question and this time it is about the brokerages and how to calculate them.

I am the new for the share marketing I am open the account for Sharekhan. I don’t know how to calculating brokerage for Sharekhan. Will you please explain how to calculating the brokerage giving me some example.

Thank you sir

As far as I know Sharekhan have a brokerage plan of 5 paise / 50 paise but if you push hard at the time of opening an account they can bring brokerage down as well but let’s assume 5 paise / 50 paise as the brokerage plan and do the calculation.

Now what does 5 paise / 50 paise mean.

It means that when you do a transaction (Buy or Sell) of 100 Rs on delivery based buying or in simple terms if you buy shares with a plan not to sell the same day you pay 50 paise as brokerage. On top of these 50 paise there will be other tax and charges which roughly makes these 50 paise close to 70 paise.

But if you square of the trade on the same day you will not be paying 50 paise but it will be 5 paise instead.

The same brokerage also applies when you sell the shares. I.e. on 100 Rs share price you pay 50 paise as brokerage.

Example

How to calculate the brokerage very fast and with no calculator?

Just add 1.5 Rs per 100 Rs to the actual share price.

Let’s say you buy Reliance Industries at 1050 Rs. (Rounded price as of now)

Now the total brokerage roughly that you will pay for buying as well as selling would be 15.75 per unit.

So the cost price will be 1050 +15.75 and so if you sell Reliance Industries at 1065.75 you will make some profit.

My broker is Motilal Oswal and My Brokerage plan is 3 paise / 30 Paise and so for this I just add 1 Re per 100 Rs to the actual share price.

I.e. 1050 + 10.5 i.e. 1060.50 will be my price where I can make some profit.

So how do you calculate your brokerage?

  • Hari

    Mr.Shabbir,
    What about the calculation for penny stocks?
    How much brokerage does ShareKhan charge for penny stocks and whats the stock price value below which they consider it as penny?

    I’ve opened my account with SK under Rs.1000 prepaid scheme and yet to get the account login. The sales rep told that the brokerage will be 0.09% for intraday and 0.50% for delivery. He never mentioned anything about penny stocks.

    Thanks & regards,
    Hari
    Chennai

    • http://shabbir.in/ Shabbir Bhimani

      Yes there is nothing like penny stock and the brokerage is based on the amount you trade or invest and not based on the price of the stock. Price of stock just helps you to calculate the brokerage on the fly.

      • Hari

        Thanks for your response.
        I found the following details from the web where its mentioned that the brokerage would be different if the stock value is lower.
        http://www.sharekhan.com/Common/Terms.htm
        ——
        F] Commissions and fees
        For Intra-day Trades :-
        0.1% on the buy side and 0.1% on the sell side. This is subject to a minimum brokerage of 5 paise per share. This means that if the share price you trade in is Rs 50/- or less, a minimum brokerage of 5 paise per share will be charged.
        —–
        I’m totally new to this and it would be much helpful if you can explain me the above term with an example.

        Few other pages I found related to tradings of lower value stock.
        1) http://parialeague.blogspot.in/2011/06/sharekhan-reviewexperience.html
        2) http://www.traderji.com/general-trading-investing-chat/25002-share-khan-brokerage-charges-2.html#post388776

        You’re blog is of great help. Thanks a lot :)

        regards,
        Hari

        • http://shabbir.in/ Shabbir Bhimani

          Hari, This is really shocking and normally I have seldom trade stock under 50 but yes I agree that I have traded some but may have missed the higher brokerage calculation verification.

          You are absolutely right that if you are purchasing stock under Rs 50, your brokerage is almost 3 times.

          • Hari

            I dont quite get what they’re explaining here.
            0.1% on the buy side and 0.1% on the sell side. This is subject to a minimum brokerage of 5 paise per share. This means that if the share price you trade in is Rs 50/- or less, a minimum brokerage of 5 paise per share will be charged.

            Is it like, whichever is higher between 5 paise per share and 0.1% on total buy value? Even if this is the case, there would be no chance for the brokerage amount to be enormous like the example links I’ve mentioned in the previous post.
            If you explain the above with some example it would be greatly assistive.

            regards,
            Hari

          • http://shabbir.in/ Shabbir Bhimani

            If anything under Rs 50 they charge 5 paise per share and so in the example the share price was 95 paise and so if you add 5 paise to it the price becomes 1 Re for buy and similarly 5 paise at the time of sale becomes 1.05 Re and if you add service tax and other charges on 10 paise (1.05-0.95) purchase it becomes almost 12%. This is what is explained in the link you gave.

          • Hari

            Got it :)
            Thanks a lot!

  • Abhishek

    Shabbir Bhimani

    i want to be a sub broker… can u help me out in this matter?
    which broking house is best?? and what is profits and losses in this business?
    and i am talking to Angel broking.. reliance money.. and india bulls?? which is a gud company??

    • http://shabbir.in/ Shabbir Bhimani

      No Abhishek, I have no experience about sub broking but I don’t see any losses in this business if you can manage your clients and grow them over time but yes I see the profit to be very very less.

    • Sachin Sharma

      Dear Shabbir,

      plz provide ur contact detail i will give u best deal in the market .

      sachin sharma
      9560244751

      • http://shabbir.in/ Shabbir Bhimani

        What kind of deal Sachin.

        • http://www.trustline.in Sachin

          in terms of revenue sharing . i m branch manager of Trustline securities ltd .

          • http://shabbir.in/ Shabbir Bhimani

            You are addressing me in your comment but actually that comment is for Abhishek.

  • Sayeeda

    Dear sir,

    Intraday, if applicable brokerage is 0.50%.ie say we buy 1000 shares at the rate of Rs 70/ he says formula is applicable brokerage*market rate ie 70*0.50% ie 0.35 and minimum is 0.05 ps per share. later he says whichever is more so to say for 1000 shares is quantity*brokerage per share ie 1000*0.35 Hence brokerage will be Rs 350. This is my doubt please clarify. I am actually calculating according to what you have said but incurring heavy loss.

    • http://shabbir.in/ Shabbir Bhimani

      Can you ask what is your brokerage rate. Is it 50 paise.

  • Sayeeda

    Dear sir,
    Please let me know the calculation of brokerage for 1000 shares at Rs 70/. As per my agent it is rate*applicable brokerage ie 70*.05 is 0.35.Later he says quantity*brokerage ie he says 1000*0.35 I am unable to understand please help me and also tell me there are any slabs

    It will be a great help for me

    Thanks

    • http://shabbir.in/ Shabbir Bhimani

      Sayeeda, Yes ideally the price of each share would be 70.05. That is how normally it is calculated.

  • Miya Bhai

    Assalamulaykum..

    I calculate it roughly….

    For example I buy 1000 shares worth 100 each, its 1000X Rs100 = 1,00,000

    1ps brockerage => Rs 1,00,000 / 10,000 = 10Rs + Extra

    For example, the share touches 103,

    1ps Brockerage => Rs103 X 1000 = 103000 / 10,000 = 10.3Rs

    this above example is for intraday @ 0.01%.

    The figure looks 20.3, but may go to 30-40 because of service taxes and STT.

  • http://sharekhan prakash

    intraday brockrage they said @0.005% but after my calculation it is near about o.oo9%what to do?

    • http://shabbir.in/ Shabbir Bhimani

      Call them and ask

  • Soumya

    Hello,
    I have seen online brokers providing a trading account as well as a demat account. Aren’t these two accounts the same. If not what is the difference between trading acc and demat acc.

    One more question for you Shabbir. I am new to online trading. Is it possible to sell off shares before even they are deposited in our demat account.Like you mentioned as squaring off.

    • http://shabbir.in/ Shabbir Bhimani

      Soumya, Trading and demat account are different. Trading account as the name suggest is where you trade your shares and demat account is where the repository of shares in digital format. You can have multiple trading account with multiple brokers but use the single demat account.

      Yes shorting of shares is possible but in Indian markets you cannot short shares which are not in Nifty for an overnight position.

      • Soumya

        Thanks Shabbir.
        I had opened a demat account and trading account with my bank which was RBS, in 2008. There are a few shares in there and the account has been mostly unused after the market crash. Can I use the same demat account with another online broker.Or will I have to check if that demat account is still valid or not. How do I check.What if I abandon that demat account and try to open a new one.

        • http://shabbir.in/ Shabbir Bhimani

          Soumya, yes you can use the same demat account but the problem would be the sales person who will visit your place will not allow you to do so because normally trading account is free and demat account is charges few hundreds annually.

  • Amit

    Can you please tell me the details of all brokrages by different trading/brokrage companies ?

    • http://shabbir.in/ Shabbir Bhimani

      Amit, many brokerage house has brokerage which is negotiable.

  • Deb

    I am week in math so tell me the faster way to calculate brokarage with an example.

    • http://shabbir.in/ Shabbir Bhimani

      Probably you need to be using calculator then because this is not any exam where you cannot use a calculator.

  • Sumanth

    Hi…

    I don’t know y ppl are getting confused or making things so complicated. The simple way of calculation brokerage charges is like this.

    The total amount which which u have spent on & at the end of the trading mutiplied by brokerage charges. Irrespective of Profit/loss u earned u have to pay brokerage charges

    For instance(intraday), u have spent 10000 INR for buying and 10000 INR for selling. At the end u would have earned +/- 500 .Now addup both 20000(+/-500)*(05/100)=??? what ever the outcome.., that is ur brokerages charges.

    Hope it clarifies ur Doubts!!!!

  • Reji

    Hi shabbir, I would like to buy the following shares.
    1.Sterlite Ind. 2.ITC 3.PFC 4.Tata Steel 3.Renuka Sugar

    Since I am on tight budget, Kindly select two shares you like the most from the above list and explain the reason to select the same.

    • http://shabbir.in/ Shabbir Bhimani

      Reji, If you are tight on budget don’t go for any one of them because buying shares is not about names. You should be buying the right shares, at the right time and at the right price.

      You only want to know right shares which is no way ideal for good returns.

  • Meena

    Hi Shabbir, Can you pls suggest me a broker best suited for long term investor that do not have high yearly charges. I don’t trade usually buy and hold for 2-5 yrs. Pls help…my current broker Edelweiss is too costly. Thanks

  • TEJASHREE

    hello sir
    i am a new investor and iwant to know claculation of brokrage
    i am buying 15 shares of bharati airtel as the rate of 340.70 and my delivery brokrage rate is 0.30% and 0.10 min , so please give me answer.

    • http://shabbir.in/ Shabbir Bhimani

      Average price for your purchase will be roughly 341.05

      • TEJASHREE

        sir ,

        but sir how to calculate this brokrage for delivery .my purchase shares of total amt is 5134 and brokrage – 0.30% & 0.10 min , bhartiairtel 15 shares buying

        • http://shabbir.in/ Shabbir Bhimani

          If you are not able to get the calculation I think best option is to go for a contract notes at the end of the day.

  • Sachin

    I guess, in the example you should have mention the quantity of shares purchased. Let me know if the below example clarify’s the brokerage calculation better.

    In general the brokerage charges while buying or selling stocks varies from one stocking broking firm to another, and even it depends upon the volumes of your investment, higher the volume of investment less the brokerage charged. Here I will illustrate how to calculate the value of brokerage charged while buying or selling stocks.

    While buying stocks:

    Say the market value of the stock you have purchased if INR 100 and the brokerage charges is 0.50%

    The total value of stock purchased will be equal to 100.50(INR 100 +0.50#)

    #=100*0.50/100=0.50

    So if you’re buying 50 shares the total bill amount you should pay to your stock broker would be 100.50*50=5025

    While selling stocks:

    Say the market value of the stock you are selling is INR 100 and the brokerage is 0.50%

    The sale value of the share would be 99.50(100-0.5#)

    #=100*0.50/100

    So if you are selling 50 shares the total bill amount your stock broker will pay you is 99.50*50=4975

    • http://shabbir.in/ Shabbir Bhimani

      The number of shares does not change the price of each shares and yes what you have done is what I have also done.

  • http://gmail puneet

    will you please suggest me best brokrage plan and best company

    • http://shabbir.in/ Shabbir Bhimani

      For me top of the list is Motilal Oswal and second is Share Khan where you have to negotiate.

  • http://gmail puneet

    i take a putof oct,6000@56, broker charge me rs.2/share and at the end of sell put @65 they again charge rs.2 /share ,how much i pay for this.ultimately i am paid rs.4 /share of nifty 50 shares in put

  • anita

    my self anita .i dont know how calculate brokrage.my delivery brokrage is .2% and intraday is .03%.please give me a answer
    example
    i have brought a 30 share of surya laxmi at the rate of 137.45.how i calculate brokrage[delivery]
    i have brought a 50 share of texmaco at 171.50.how i calculate brokrage [intraday]

    • http://shabbir.in/ Shabbir Bhimani

      It will be for a share price of 100 Rs your one side brokerage will be 0.50 Paise and that is your cost price will be close to 100.50 Rs

  • anita

    hello sir
    i am a new investor and iwant to know claculation of brokrage
    my delivery brokrage is .02% and intraday is .03%.i dont know claculation of brokrage

    • http://shabbir.in/ Shabbir Bhimani

      Anita, I guess you have some error in telling the brokerage because it cannot be as low as 0.02% for delivery

  • dbr

    i am using HDFC Sec for buying shares. I usually buy upto Rs 2000 in a single day. i am charged around 2.5 % as brokerage. is it the usual amount. will i save some money if i change the broker?
    thankx in advance.

    • http://shabbir.in/ Shabbir Bhimani

      dbr, you should change ASAP as that is too high a brokerage plan.