THE CONCEPT OF ZERO BROKERAGE

Trading in financial markets means buying or selling of shares. The moment you purchase shares you go on to own a small part of the company and at higher prices sell them for profits. Brokers are there in the market who provide you with advice and help you to make money from the stock market. The brokers are known to charge a particular charge for the transactions they go on to execute. Of late the concept of zero brokerage has emerged in stature that has really appealed the investors.

A lot of firms have gone on to emerge in the market with the concept of discounted brokerage. Now the revolution has taken one step ahead to zero brokerage trading. A host of companies are there in the market that operates on zero brokerage module. With this concept of brokerage coming into prominence, the business of broking is setting new milestones. The monthly return of the traders is increased by this mechanism. Once upon a time the returns were significantly affected because of eh high rate of brokerage that was levied by the investors.

The scheme

The scheme had its emergence in the month of December 2015. All the investments with the leading brokerage houses became free from brokerage. The main reason why these companies did go on to start zero brokerage was to encourage more trading in India. Presently the market has an in depth analysis of 1 million investors, only. This is really small in a country like India, where 65 % of the population is below the age of 35. This initiative is aimed at attracting the young investors of India.

In order to attract more investors to the stock market, the need of the hour is not only to introduce zero brokerage schemes. Even the process of trading has to be made hassle free and user friendly at the same time. The time is right for the investment culture to prevail in a country like India. But the concept of zero brokerage on the trading of equity are confined to individual investors. The partnership firms or corporate firms and even others are required to cough up the usual rate of 0.1 % or Rs 20 of the order, whichever is the lower among the two. With the help of these plans an investor is able to save money whereby they can ensure maximum returns on their investments.

The features associated with zero brokerage accounts are as follows

• You can avail the features of zero brokerage for an unlimited period of time
• The scheme has lifetime warranty with no restrictions on the volume of trade
• No form of hidden clauses is attached to the plan in the form of a capital account or even the appropriate quantity of trade that is needed.

Suppose a trader has a turnover of 20 lakhs, on delivery based trading, with a brokerage rate at 25 paisa the amount would shoot up to Rs 25,000. By zero brokerage the sum would be reduced to 0,00 enabling you to earn 2 % on your investment.