• Wednesday 11 October 2017

    The Trading Account: Know these facts before opening the account

    For any trader in the stock market, the trading account is much required. There are various trading service providers who offer the trading services. There can be an online or offline account as per the requirement of the customer. The best part is the services that one can get as a client. The client must know various rates applied on each trade. The trading must be carried out after thorough research and knowledge only.

    The trading account:

    One can get the best stock trading account India only after proper research. The client needs to known and compare the brokerage charged by various service providers as there is no uniform rate applied. Hence a client who wants to have trading as an intraday trader need to get an account opened with a service provider who can offer best of the customer service with the low brokerage. For a client as well as the service provider the brokerage rate matters a lot. It is an expense for a client, but for a broker, it is an earning.

    The brokerage: 

    Usually, there is no fixed rate of brokerage in the market, but almost all the service provider charges the same. However, in some cases, the client can have reduced brokerage also. The service provider also prefers to offer a low rate of brokerage under certain situations. Some of these situations are as under.
    • When a broker or broking company opens a new firm in an area, where there is no awareness of stock trading. Here they offer the account with low charges so that the clients who are interested to some extent can also open an account.
    • When the broking company wants to create a client base in an area, where the competitors are already present. Here to attract the clients from the competitors a firm may reduce the brokerage charges so that those clients who are not happy with the present brokerage rates of the rivals can move to the firm. In such case, the firm may get the new branch settled as a profit-making one faster.
    • If, the client is a trader with huge volume. In such case, the broker may think that he is a bulk trader and hence even if the rate is lowered he can prove profitable to the firm. In such case, it can offer a discount to the trader.
    • If the client is ready to pay brokerage in advance, the broker may offer a discount in brokerage rate. As the client is already paying some amount of brokerage which he may have paid later, there is no harm for the broker to offer some discount.
    •  If, the client is ready to provide a huge cheque as margin fund. In such a case the client proves that he is a big trader and as soon as he will start trading the broking firm will also be able to make a profit. Hence the broking company, to retain such clients can offer a discount in brokerage.

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