When it comes to trading, the brokerage amount is a significant component in the list of expenses that an active trader has and when brokerage is calculated on percentage of trades, it turns out to be even more considerable. Free trading is not a myth anymore. With growing competition in Indian brokerage industry, few brokers have reduced their brokerage to zero on equity delivery trading.
After the stunning success of Robinhood with its free delivery mobile trading app in US, some discount brokers in India also started zero brokerage trading in delivery segment. Discount broker like Zerodha and Upstox lets you buy and sell individual stocks in cash segment at Rs 0 per trade. The idea behind it is to introduce beginners to trade in stock market with free equity delivery trades and as they become used to with trading, they will more likely to do intraday and derivative trading which is not free.
As per market analysis, very few investors invest money in delivery trading, it’s great marketing strategy to provide free brokerage in one segment.
Second form of free brokerage trading is monthly or yearly plans – brokers like Prostocks, SAS Online is providing Equity delivery and equity derivative monthly plan in just Rs 899/999 per month. This plan is almost like free trading for active investor who performs daily high volume trade in equity segment.
If you are active trader and perform average 40 to 60 trades per day and if you pay Rs 20 per trade, it sum up to Rs 800 to 1200 per day as brokerage charges. In such case broker like Prostocks is providing free trade or almost like free trade after paying monthly fee of Rs 899.
Rs 899 or Rs 499 are recovered by levying brokerage in contract note @ 2.5% as and when trades are done by the client in any particular month after that they charge .01 Rs (1 Paisa per trade) as brokerage which is kind of free trading.
As per financial experts, broker’s revenue mostly comes from intraday and derivative traders. Brokers do not generate huge income from delivery trading. Delivery based trading is very less, also to invest in delivery trading, investor need to pay 100% amount in cash. Brokers who are providing zero brokerage trading, main source of income for them is interest on your money which is left unused in your account, as well as some brokers also do prop trading from the fund which is left out in their account.
Answer to this question is yes, brokers like Zerodha, Upstox, ProStocks,SAS Online are 100% reliable brokers. They are regulated by SEBI and are registered members of NSE, BSE, MCX.
There are no hidden charges in brokerage for Zerodha, Upstox, Prostocks, SAS Online. Other charges like transaction charges, STT, SEBI turnover fees, GST, stamp duty, demat charges are extra from brokerage and you need to pay as per broker’s policy. There are no other charges charged by broker like minimum brokerage or any hidden charges.
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