Do you think Reliance Money really charges 1 paisa ??? Think Again...

I am sure there are tonnes of reliance money customers here.. are you aware of how 1 paisa brokerage is absolutely misleading ???

Just check how your turnover is calculated say for NIFTY options.. and how frequently they deduct recharge money from your account.

1 crore turnover limit looks big for 500rs and 2 months. Only if you know that turnover per lot = [(Option price x lot size) + premium)

For example if you buy NIFTY 3000 CE, 1 lot at premium of 5000Rs, and sell the same at 7000 rs. Then your turnover is,

(3000x50)+5000+(3000x50)+7000 = 3,12,000 rs. Do you still think turnover of 1crore is big ??? And do you still think Reliance is charging 1 paisa per brokerage ???

Dont bother to talk to reliance call center, they either don't know this or have been instructed to confuse the customers.

- chirag

Re: Do you think really Reliance Money really charges 1 paisa ??? Think Again...

Can no body stop this malpractice!!!!! May be forum should provide a remedy

Re: Do you think really Reliance Money really charges 1 paisa ??? Think Again...

As far as I know this is undocumented. Is anyone aware of written reference to how reliance calculates brokerage ????

Either Reliance openly accepts this and claim how they mint money while misleading the consumers... or people drag them to court...

Re: Do you think really Reliance Money really charges 1 paisa ??? Think Again...

This is how the turnover for options used to get calculated in past. Recently SEBI came up with guidelines for charging on premium only, but somehow since Reliance shows the cost as prepaid card they have found a loophole I believe.

Even with this method of brokerage calculation it comes cheaper to trade with RMoney as compared to many other brokerages as long as you don't trade in too many really cheap (out of the money) options.

For example:

Let us say NIFTY option at a premium 100 Rs. with strike of 3000

RMoney cost

(2500/600,00000) x (3000 x 50 + 100 x 50) = 6.5 Rs

Standard Broekerage of say 2% of the premium

(50 x 100) x 2/100 = 100 Rs.

As you can see if you start regularly trading options worth 5 Rs premium

RMOney cost
(2500/600,00000) x (3000 x 50 + 5 x 100 ) ~ 6.5 Rs


Standard Broekerage of say 2% of the premium
(5 x 50) x 2/100 = 5 Rs

AT least my average premium comes to ~100 Rs if I take average for my monthly trades, so I believe RMOney is still way cheaper...

If I have done some mistake in the calculations above please correct me.

Re: Do you think really Reliance Money really charges 1 paisa ??? Think Again...

I don't completely deny that reliance is potentially cheaper than other brokerages, but certainly not of the order that one thinks after looking at 1 paisa per trade. Its much beyond that and also depends on which recharge card you have taken.

for 500 rs, 5,00,000 turnover, you can hardly buy 2 lots of NIFTY. That means per lot charges you pay is roughly rs 250. Obviously higher the slab you take better rates you get.

Another beauty of this calculation is, as the NIFTY index goes higher, you are going to pay more brokerage. say today NIFTY is at 2500 and you are buying and selling around this, then your turnover per lot is less than say when NIFTY is around 5000. So for a particular recharge coupon you will be able to trade less and thus more effective brokerage per lot.

Ultimately Reliance Money makes more money !!!

Re: Do you think really Reliance Money really charges 1 paisa ??? Think Again...

It is not malpractice dear. As far as I know, every broker charges less than what SEBI allows, for competitive reasons.

They said once over the phone "No brokerage Sir, only Reliance"

And for your information, I am not a member of Reliance fans club, when it comes for trading and choosing a broker

Happy Trading

Re: Do you think really Reliance Money really charges 1 paisa ??? Think Again...

Yes if one looks at 1 Paisa only and forgets all about the recharge card then considering the proficiency of calculations and money management that person should not be a trader at all .

As far as NIFTY going higher and that leading to higher brokerage also happens with 2.5% of premium. You will see that Option premium value in absolute rupees will also go higher usually if the underlying is higher. For example: if you have 100 Rs stock of the same volatility as NIFTY one month ATM option may be trading at 5 Rs., on the other hand NIFTY at 3000 the option trades at ~200 Rs.

RMoney has lots of other issues like useless customer service, crappy trader's terminal, horrible backoffice systems, but for pure brokerage I have not found anyone even close. RK Global seems to be the closest.

Re: Do you think really Reliance Money really charges 1 paisa ??? Think Again...

BTW I would willingly give Reliance or whoever 10 times more brokerage if they are going to take NIFTY 2 times the current value

Re: Do you think really Reliance Money really charges 1 paisa ??? Think Again...

Hai,
Try www.justtrade.in for fixed brokerages
regards,
naren

Re: Do you think really Reliance Money really charges 1 paisa ??? Think Again...

http://www.justtrade.in/ProductsInner.aspx?pageopt=JP&id=3

There offer for high volume trader. I am pretty sure that options turnover will be calculated like Reliance. If anyone knows it to be otherwise do let me know.

Of course Exchange charges 0.05% of the option premium as exchange fees, so 0.01% can not be on option premium

If your F&O trading style is very consistent daily turnover then this may come out to be cheaper than RMOney. 37.5Cr turnover in 11K. This is coming to 0.0029%, which is a suspicious number. I think exchange charges close to 0.004% including all the fees to brokerages, so there might be some catch.