Day Trading Broker - A Guide For Selection of Online Stock Trading Brokers
Stock markets all over the world are booming once again and it is but natural that you must have started receiving tons of marketing calls, emails and SMSes from different stock trading companies and online stock brokers. With thousands of online stock trading offers, picking the right broker is often a daunting task especially if you are just beginning to trade in the stock markets. Here is a guide that will help you in focusing exactly what you should look out before you take the decision to open stock trading account in India.
1. Account opening charges and documentation
Find out what are the one-time charges for opening a trading account and a DEMAT account. Make sure that you can fulfill the documentation part, that is, you have the PAN card and address proof. Besides, you have to sign couple of legal documents such as broker-client agreements and POA (Power of Attorneys), which mandate court stamp fees. Therefore, ask your broker what are the extra charges (if any) for the documentation. Day Trading Broker
2. Charges - Brokerage, DEMAT and other statutory charges
Ask for detailed information about brokerage charges for intra-day, delivery, future and options transactions. Nowadays, with fierce competition, you could easily negotiate brokerage charges. For Day Trading, and Future and Options, you could easily fetch brokerage @ 0.005 to 0.05% and for Delivery Transactions, the brokerage rates vary from 0.2 to 0.5% depending upon the volume of transactions. Check out the minimum brokerage amount payable by you and the details of statutory charges such as ST (service tax), STT (Securities Transaction tax), Turnover Tax, Stamp Duty and Exchange Transaction Charges. Find out what are the various types of charges for DEMAT account, which include Annual Folio Maintenance charges and transaction charges. You must be aware about all these charges because it adds substantially to your expense side and hence can reduce your profits.
3. Margin System
Many brokers allow you to take exposure in the markets for day trading just by paying a small amount, called as margin money. Depending upon the broker, you can get exposure from four to six times the margin amount. Some of the online stock brokers also give you a facility to trade against your shares, which are lying in your DEMAT account opened with them. Day Trading Broker
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