“There is nothing permanent except change,” the Greek philosopher Heraclitus is credited to have said these words 2500 years ago. The saying remains relevant even after all the years. Consider the Indian stock markets. A number of changes have been witnessed in the past five years like increased financial awareness and rising participation of investors from Tier 2 and Tier 3 cities. In absolute numbers, UP, Bihar, Punjab, Kerala and Madhya Pradesh were the top five states for new registrations in 2018-19.
Even though a lot of positive changes are taking place, some fundamental issues persist. The market ecosystem consists of various critical components such as the exchanges, the investors and the brokers. A crucial role is played by brokerage firms as it is not possible to access the stock markets without them. Though brokerages play an important role, they also are the reasons for the issues being faced by investors.
Steep brokerage charges
Many investors, especially new investors, have to bear diminished returns due to a high brokerage fee and hidden charges. High brokerage fee has become a major impediment for small investors in India. Most full-service brokerages levy a brokerage fee as a percentage of the transaction value. It could range anywhere between 0.03% and 0.60%. On the opposite end of the spectrum are discount brokers that levy a flat brokerage fee. But credibility and a lack of value-added services is an issue with discount brokers. What should an investor do? High-quality research reports and advisory services from a full-service broker is as important as a lower brokerage fee.
Considering the dilemma, Angel Broking has come out with a compelling offer. Under the Angel iTrade Prime Plan, you can trade in the equity delivery segment without paying a penny. The company will charge a flat Rs 20 per order for trading in the equity intraday, equity futures, equity options, currency future, currency options and commodity segments. It has the potential to free you from the shackles of high brokerage fees. Let us take a look at the math to understand the impact of the Angel iTrade Prime Plan on the returns. For instance, you sign up with a broker that levies a brokerage fee of 0.40% on equity delivery orders. You buy 100 shares of XYZ at Rs 100 apiece and sell all the shares after a month at Rs 110 per share. The brokerage fee is calculated as a percentage of the total value of the transaction (buying + selling).
Transaction value while buying: Rs 100*100 shares = Rs 10,000
Transaction value while selling: Rs 110*100 shares = Rs 11,000
Total = Rs 21,000
Brokerage fee = (0.40*21,000) /100 = Rs 84
You will have to pay Rs 84 as a brokerage fee, which is 8.4% of the total profit of Rs 1000 earned through the trade. On the other hand, you will have to pay nothing with the Angel iTrade Prime Plan. It must have crossed your mind that several discount brokerages too offer flat brokerage fees. But discount brokers do not offer credible research reports and market insights. The Angel iTrade Prime Plan provides access to basic research reports and investment advisory free of cost along with flat brokerage rates.
Transparent cost structure
The brokerage fee forms the bulk of trading-related costs, but it is followed by other expenses. Besides the brokerage fee, you have to pay stamp duty, security transaction tax, transaction charges and SEBI turnover charges among others. There are other costs associated with trading and demat accounts such as opening charges and annual maintenance charges. It is clear from the name of the various charges that they are levied by entities ranging from state governments to the market regulator. However, some charges like account opening charges are levied by brokerage firms. Some brokers also add certain hidden charges to profit from the labyrinth of various taxes and fees. The Angel iTrade Prime Plan will make hidden charges history. With the plan, you can trade with the utmost transparency without worrying about hefty hidden charges. Also, Angel Broking doesn’t charge anything for opening the demat account, which significantly reduces the burden for new investors.
With the improvement of internet connectivity, an increasing number of investors are opting to trade through mobile and desktop applications. The interface of the trading application can enhance or diminish your trading experience and in some cases also have an impact on the returns. Millions of trades take place every second across the country. When you combine split-second decision making with increasing dependency on digital technologies, even a minor glitch can be damaging. Angel Broking with its advanced backend digital infrastructure ensures a smooth and reliable interface for the investor. The Angel Broking trading application is simple, intuitive and user-friendly.
High brokerage fees, hidden charges and complicated and unreliable trading platforms have been some of the major issues plaguing Indian investors. The Angel iTrade Prime Plan with its simplified cost structure has solved the problem of high brokerage fees and hidden costs. The access to high-quality research reports is the icing on the cake. The advantages provided by the iTrade Prime Plan in particular and Angel Broking, in general, make it an “Agey Badhne ka Smart Sauda” for every thinking investor.
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