In markets, an essential motivation to trade, naturally, is to make a profit. Technology has helped us in this motivation to the hilt. Every second on trading platforms is precious and recognising this truth, technology has helped us execute our trades as swiftly as possible. Many a time, though, in our zest and ability to make the most in trading hours, people do not understand transaction costs associated with trades. This can be a problematic situation if you have made profitable trades, yet your net gain is lower than what you had calculated. This may be due to transaction costs. Hence, it is of paramount importance to have a tool that can help you calculate easily costs such as brokerage and other transaction costs associated with trades. In this context, Upstox has a smooth facilitator: Brokerage Calculator. This brokerage calculator is available online. It calculates brokerage and other charges swiftly and explains whether your trade will make money for you.
Before we understand the nuances of the brokerage calculator, let us know the components of transaction costs in a trade. In a trade, brokerage charges form a large part of a transaction. But when you deal with Upstox, which provides services at costs unmatched in the industry, you are in safe hands. You will incur the lowest brokerage charges.
One of the critical transaction costs you incur in your trades is Securities Transaction Tax (STT) or Commodities Transaction Tax (CTT). If you trade in equities, then you incur STT. And if you trade in commodities, then you incur CTT. Stock exchanges also levy transaction charges. Then, there are Sebi charges. Sebi charges depending on the transaction size at the rate of Rs 5 for turnover valued at Rs1 crore. Besides this, there are Demat Transaction Charges. They are Rs 18.5 per scrip per day. When you sell a stock when you buy a stock, there are no demat charges, and the stock gets credited to your Demat account. You also have to pay state stamp duty. Goods and service tax at 18% is payable on brokerage charges, transaction charges and demat charges. All these charges and taxes are to be borne by you when you trade.
This array of charges are too many for a mind which is more interested in finding a workable, profitable idea and then converting that idea into real profits. These difficulties are ironed out when you have an online brokerage calculator which calculates your trade and instantaneously informs you whether your trade was profitable. Upstox’s Brokerage Calculator is one such service. The calculator takes into account all variations possible in trades that can be executed. For example, it accounts for both intraday as well as a delivery trade. It accounts for trading in stocks in the cash market and futures & options in the derivatives market. The variables are the brokerage charge, STT (or CTT), stock exchange transactions,s and state stamp duty. These depend on the nature of the transaction carried out – delivery or intraday, cash market trade or derivative trade.
One of the most attractive features of Upstox’s Brokerage Calculator is its brokerage charges do not exceed Rs 20 per order. Most individual investors buy shares in the cash market—either for intraday or for delivery. For equity intraday, its charges are Rs 20 per order or 0.05%, whichever is lower on the transaction value. For equity delivery, the brokerage is Rs 20 or 2.5%, whichever is lower on the transaction value, for customers onboarded on or after 21 September 2021. For equity intraday, its charges are Rs 20 per order or 0.05%, whichever is lower on the transaction value.
Let’s take an example to understand how the Upstox brokerage calculator helps you ascertain your trade’. You decide to buy 100 shares of Reliance Industries at Rs 2527 per share on BSE and sell it on BSE at Rs 2900. In this case, the brokerage payable is zero for customers onboarded before 21 September 2021. But, you have to bear the following charges: STT worth Rs 542.73, transaction charge of Rs 18.72, a state stamp duty of Rs 81.41, and Sebi turnover fee of Rs 0.27. These costs add up to Rs 646.50. The brokerage calculator online informs you that if the stock price moves up by Rs 6.04, you can leave the trade with no loss and no profit—technically known as the breakeven point. But since you are selling those 100 shares of Reliance at Rs 2900 per piece, you will make a profit of Rs 36,628. This one-click solution helps you to make an informed decision.
When the markets are volatile, you have to be sure about the profitability of your trade. Savvy traders can use a simple input like breakeven pointers if the trade is not moving as expected. They need not wait till the point where Stop Loss hits. In such a case, the trade can be squared off quickly if you know the breakeven point. This saves your capital. And then, you can look for some other trade. Also, depending on the profitability of trade ascertained using the brokerage calculator online, you can avoid low reward trades. This not only saves your costs resulting from overtrading but also gives you breathing space as you trade less.
So, in sum, Upstox’s Brokerage Calculator online is your friend who is there to assist and guide you in realising your profit goals as smoothly as possible.