How to Calculate Brokerage Charges in Intraday Trading
Intraday trading is a crowd-favourite, especially among stock market beginners. The constant tussle between buyers and sellers brings forth lucrative investment opportunities which are too good to pass. But high brokerage on intraday trading often eats into investors' profits and reduces their overall return on investment (ROI). This is why you must learn how to calculate brokerage on intraday trading to make better trading decisions.
The brokerage charged on intraday trading varies based on the type of broker. Traditional brokers provide a range of customised services but charge very high brokerage. Whereas discount brokers allow their clients to trade on their own and pass on the reduced cost to investors in the form of low brokerages.
Read Also: Is There Any Tax on Intraday Trading?
Understanding Intraday Trading Brokerage
In intraday trading, brokerage charges are levied on total trade value, also known as turnover. The brokerage for intraday trading typically ranges between 0.01 and 0.05% of the trade value or a fixed fee per executed order, depending on the type of broker. Discount brokers charge a flat fee (typically ₹20 per executed order or percentage of total trade value, whichever is lower) for intraday trading.
Let us simplify the intraday brokerage calculation for you with the following example. Assume you buy 100 shares of ABC Ltd. with a current market price of ₹1,500 per share. During the day, you decided to sell these 100 shares (on intraday basis) at ₹2,000 per share. Your total turnover in this case will be ₹3.50 Lakhs (₹1,500 + ₹2,000 = ₹3,500 * 100 shares).
| Total Shares Bought (Intraday) | 100 |
| Buy Price (per share) | ₹1,500 |
| Total Turnover (Buy transaction) | ₹1,50,000 |
| Total Shares Sold (Intraday) | 100 |
| Sell Price (per share) | ₹2,000 |
| Total Turnover (Sell transaction) | ₹2,00,000 |
| Total Trade Value / Turnover | ₹3,50,000 |
Scenario 1: You trade with a traditional broker
Assuming your broker charges you 0.05% on the total trade value, the intraday brokerage payable in the above example will be ₹175 (₹75 for the buy transaction and ₹100 for the sell transaction).
Scenario 2: You trade with a Discount broker
Since discount brokers charge a flat fee per executed order irrespective of the total turnover, the intraday brokerage payable in this case will be ₹40 (₹20 for the buy order and ₹20 for the sell order).
Scenario 3: You trade with m.Stock
Since you have the benefit of m.Stock’s demat account, you pay one of the lowest brokerages across intraday F&O and MTF. So, the intraday brokerage payable with m.Stock will be ₹5.
| Total Turnover | Intraday Brokerage with Traditional Brokers | Intraday Brokerage with Discount Brokers | Intraday Brokerage with m.Stock |
|---|---|---|---|
| ₹3,50,000 | ₹175 | ₹40 | ₹5 |
As evident above, m.Stock is the best option for you as you pay one of the lowest brokerages on your intraday trades and zero brokerage across equity delivery, mutual funds and IPOs. Let us now understand how intraday brokerage is actually calculated.
Note: In addition to brokerage, there are other trading costs that investors have to bear like, exchange transaction charges, securities transaction tax, GST, SEBI fees etc. So, it is important to plan your trades accordingly.
How to Calculate Brokerage on Intraday Trading?
Calculating brokerage on intraday trading is fairly easy with m.Stock’s intraday brokerage calculator. Follow the below steps and calculate the brokerage payable on your intraday trades.
Calculating Intraday Trading Brokerage - Flat Fee Brokerage
Select brokerage type as 'Flat'
Enter the brokerage charged by your broker on every executed order.
Enter the number of daily orders you typically place (In case of intraday trading, one round of buying and selling will count as 2 orders)
On the right side, you will see your yearly savings, which is ₹9,600 in this case.
Calculating Intraday Trading Brokerage - Percentage of Total Trade Value
Select brokerage type as 'Percentage'
Enter the brokerage percentage charged by your broker on total turnover
Enter the average daily turnover (buy price + sell price multiplied by quantity of shares traded)
On the right side, you will see your yearly savings, which is ₹42,000 in this case.
By opting for m.Stock’s demat account, your annual savings could be as high as ₹42,000 and even more! So, make the right choice and open a free demat account with m.Stock today.
Read Also: How Does Brokerage Work?
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FAQ
Does intraday trading involve brokerage charges?
Most brokers in the industry levy high brokerage charges on intraday trading. But m.Stock charges one of the lowest brokerage on intraday delivery.
How is brokerage calculated for intraday trading?
In intraday trading, you pay for both the buy and sell side of the transaction. Depending upon the type of broker, you can either pay a fixed flat fee (typically ₹20 per executed order) or percentage of total trade value (0.01% to 0.05%).
Is there a difference between brokerage charges for delivery and intraday trading?
Brokerages typically charge for both sides of the trade in intraday trading while (equity) delivery trading is mostly free.
What are the other costs involved in trading, apart from brokerage charges?
Apart from brokerage charges, net transaction cost includes transaction or turnover charges, securities transaction tax (STT), GST, SEBI turnover fee and commodity transaction charges.