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Advantages Of Discount Brokers

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The advent of discount brokers in the Indian market have revolutionized the way trading is done in India.
Discount brokerages have heavily brought down the cost of trading. This has proven to be a boon to the traders especially the intraday and the derivatives trades.
Discount brokerages like RKSV and Zerodha have already started hurting the broking industry. Full-service brokers had made a request to market regulator Securities and Exchange Board of India (SEBI) to impose a minimum slab on the brokerage being charged by discount brokers. This request was declined, clearing the way for more aggressive competition.
These brokers rely entirely on the online trading platform and technology to keep costs down, while traditional brokers typically …show more content…

Getting more profits
Put simply, we are out there to make money in the stock markets. When one goes through the contract note of the regular brokers, there are huge costs spent on brokerages, taxes and duties. At a brokerage of Rs.30 on per lot of Option one has to pay a brokerage of around Rs.150 for 5 lots. There are also duties and taxes which increase it to Rs.200.When the same thing is done through a discount brokerage the brokerage cost is Rs.20 and adding the taxes and duties it come to Rs.40. There is saving of Rs.150. It directly adds more money to the profits.
2. No need to sacrifice the quality of the execution.
There is no difference between trading through a regular broker and a discount broker. There is still the old facility of call and trade. There is the new facility of mobile trading and online trading.
3. More high frequency trades
The reduction of brokerage brings down the breakdown even. The intraday brokerage for discount brokerage is 0.01% or Rs.20, whichever is lower. So, in small trades, when a trader buys at 100.01 and sells at 100.05, he still makes profit. In large trades, the advantage is even more as the brokerage is even less due to the Rs.20 cap. This reduction of breakeven point enables a trader to do more frequency

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