A brokerage calculator is a free online tool that will let you know just how much money will it cost you to buy or sell shares before you make the trade. You can enter the details of your trade upfront, and get the complete cost breakdown instantly instead of finding out what your actual profit is after the contract note arrives in your inbox.
It seems like the "brokerage" part refers only to the calculation of the broker's fee, but it is much more. It combines all charges which are deducted from a trade, such as brokerage, Securities Transaction Tax (STT), exchange transaction charges, SEBI turnover fee, GST, stamp duty etc. and thereby shows you the actual net profit or loss, not just the headline profit.
This is particularly advantageous for intraday traders and F&O traders, as they trade on thin margins, so any charges can impact their returns. However, it can be just as useful for a first-time investor who is looking to compare two brokers before they open a demat account.
How Brokerage Is Calculated
The Brokerage Formula
Most brokers adopt one of the following pricing model –
-
Calculate brokerage: Brokerage = Trade Value × Brokerage Rate (%).
-
Flat-fee brokerage: Charges that are incurred per executed trade irrespective of the volume of the trade (usually available with discount brokers, such as ₹20 per trade or 0.03% of the amount of trade, whichever is lower)
The costs associated with full-service brokers are generally a percentage of the trade value, and the costs associated with discount brokers are generally fixed and limited to a small amount, making it easier for high-volume traders to predict the costs.
Worked Example
Arjun purchases 50 shares of a particular stock at ₹800 per share and sells the same at ₹815 per share on the same day, his stock brokerage firm being a discount broker, who charges 0.03% for turnover for each order or a fixed amount of ₹20 per executed order.
|
Buy Side |
Sell Side |
|
|---|---|---|
|
Trade Value |
₹40,000 (50 × ₹800) |
₹40,750 (50 × ₹815) |
|
0.03% of Turnover |
₹12 |
₹12.23 |
|
Brokerage Charged (lower of ₹20 or 0.03%) |
₹12 |
₹12.23 |
Total brokerage for the round trip = ₹24.23, on a gross profit of ₹750 (50 × ₹15). Arjun makes a gross profit of ₹750. When STT, GST and exchange charges are added, the calculator will display Arjun's actual net profit — the key figure, not the gross one of ₹750.
Charges Included Besides Brokerage
-
STT (Securities Transaction Tax): A tax levied by the government on both buy and sell transactions in delivery trades and sell transaction in intraday trades.
-
Exchange Transaction Charges: A small transaction charge imposed by NSE/BSE to operate their trading platform.
-
GST: 18% charged on brokerage plus exchange transaction charges.
-
SEBI Turnover Fees: This is a very negligible fee levied by the Securities and Exchange Board of India (SEBI) on each turnover in securities.
-
Stamp Duty: is a state-specific tax on the purchase side of each transaction.
-
DP Charges: Charged by the depository only when you sell shares held in delivery (not applicable for intraday).
Equity Delivery vs Intraday vs F&O Brokerage — What's Different
|
Charge Type |
Delivery |
Intraday |
F&O |
|---|---|---|---|
|
STT |
Charged on buy & sell |
Charged on sell only |
Charged on sell (options: on premium; futures: on sell value) |
|
DP Charges |
Applicable on sell |
Not applicable |
Not applicable |
|
Brokerage |
Often ₹0–20 per order |
Flat fee or % of turnover |
Flat fee per lot/order |
|
Holding Period |
Held beyond the trading day |
Squared off same day |
Contract-based, expiry-bound |
This is why calculating the trade value by segments is important, since a single trade value could be vastly different depending on the segment it's in, whether it's delivered, intraday or F&O.
Factors That Affect Your Brokerage Cost
Trade Value and Volume
The absolute amount of brokerage is higher, in general, when the trade value is larger; however, many brokers impose a cap on brokerage per trade which is beneficial to high value traders.
Broker Type (Full-Service vs Discount)
Full-service brokers include research, advice and maintaining the relationship in the fees, making them more expensive. These are removed by discount brokers and a flat low fee is charged only for execution of the trade.
Trade Segment (Delivery, Intraday, F&O, Commodity)
The STT rates and margin requirements vary from segment to segment and the charge structure for brokerage can be different, so what may appear to be the cheapest brokerage for delivery trading may not be the cheapest for F&O.
Why Use a Brokerage Calculator Before You Trade
If you aren't considering trading costs, they may be eroding your profits without you knowing. For this reason, many traders have come to use tools like the TheTopStockBroker brokerage calculator, as it eliminates the need to guess at how much it will cost you and lets you know beforehand.
-
No hidden fees when the contract note comes in!
-
Compare brokers against each other before opening an account.
-
Don't open trades in which the costs exceed the benefits — often seen in small time frames
-
Make sure to make your entry and exit decisions taking your break-even level into consideration.
-
It's available without login or even a demat account, and it is completely free.