Kotak charges Rs. 500 on profit of Rs.800. How to make day trading work?

B

bashu123

New Member
#1
#1
Hi,

I need your help in understanding if I am being charged correctly and how to make day trading work.

I recently purchased 100 shares of 'Bank of Baroda' at 730.5 and sold them 738.67. I thought I made a cool Rs. 800 minus a few rupees as Broker's fees.
It turned out that the broker's fees took a bite of over Rs. 500. and I received only Rs. 300 for taking all the risk!!

Step 1: Bought 100 shares of 'Bank of Baroda' at Rs. 730.5:
============================================================
Gross Rate: 730.5000
Brokerage rate per security: 1.4610
Net rate per security: 731.9610
Gross Value: 73050.00
Brokerage value: 146.10
Net settlement value: 73196.10

Other charges:
--------------
SERVICE TAX ON BROKERAGE 15.05
SERVICE TAX ON OTHER CHGS 0.75
STAMP & OTHER CHARGES 14.64
STT 91.00
----------
Final cost: 73317.54



Step 1: Sold 100 shares of 'Bank of Baroda' at Rs. 730.5:
===========================================================


(


Gross Rate: 738.6750
Brokerage rate per security: 1.4773
Net rate per security: 737.1977
Gross Value: 73867.50
Brokerage value: 147.73
Net settlement value: 73719.77

Other charges:
--------------
SERVICE TAX ON BROKERAGE 15.22
SERVICE TAX ON OTHER CHGS 0.76
STAMP & OTHER CHARGES 14.74
STT 92.00
----------
Final cost: 73597.05



Net profit: Rs. 279 Instead of theoretical Rs.800.


So I take risk of over Rs.70,000, make theroretical profit of Rs. 800 and The broker keeps Rs. 300, I lose another Rs.200 in taxes and other charges. And get to keep only Rs. 300.

How can I make this work?
 
alroyraj

alroyraj

Well-Known Member
#2
#2
bashu123 said:
Hi,

I need your help in understanding if I am being charged correctly and how to make day trading work.

I recently purchased 100 shares of 'Bank of Baroda' at 730.5 and sold them 738.67. I thought I made a cool Rs. 800 minus a few rupees as Broker's fees.
It turned out that the broker's fees took a bite of over Rs. 500. and I received only Rs. 300 for taking all the risk!!

Step 1: Bought 100 shares of 'Bank of Baroda' at Rs. 730.5:
============================================================
Gross Rate: 730.5000
Brokerage rate per security: 1.4610
Net rate per security: 731.9610
Gross Value: 73050.00
Brokerage value: 146.10
Net settlement value: 73196.10

Other charges:
--------------
SERVICE TAX ON BROKERAGE 15.05
SERVICE TAX ON OTHER CHGS 0.75
STAMP & OTHER CHARGES 14.64
STT 91.00
----------
Final cost: 73317.54



Step 1: Sold 100 shares of 'Bank of Baroda' at Rs. 730.5:
===========================================================


(


Gross Rate: 738.6750
Brokerage rate per security: 1.4773
Net rate per security: 737.1977
Gross Value: 73867.50
Brokerage value: 147.73
Net settlement value: 73719.77

Other charges:
--------------
SERVICE TAX ON BROKERAGE 15.22
SERVICE TAX ON OTHER CHGS 0.76
STAMP & OTHER CHARGES 14.74
STT 92.00
----------
Final cost: 73597.05



Net profit: Rs. 279 Instead of theoretical Rs.800.


So I take risk of over Rs.70,000, make theroretical profit of Rs. 800 and The broker keeps Rs. 300, I lose another Rs.200 in taxes and other charges. And get to keep only Rs. 300.

How can I make this work?
Click to expand...
Looking at the brokerage it seems that it is 0.2% (146.1/730.5). You have not mentioned whether it is in delivery or intraday. But it can be inferred it is in delivery.
See nowadays the market moves sideways or in very small movements.
Just look at the gain in %age.
738.67-730.5=8.17
8.17*100/730.5=1.1184%
and
Your brokerage is 0.2%
As a thumb rule your total charges including brokerage and statutary charges is 3 times the brokerage (I calculated) ,so 0.2%*3 =0.6%
Of course for u it is coming to 0.366% for one leg, therefore totally 0.74%.

Therefore 1.12%-0.74%=0.38%
0.38%*730.5*100=277.59 Rs.

Now you know why trading equity intraday at percentage scheme is not renumerative,and fixed brokerage per month is the only sustainable way to make money.
 
MarketRider

MarketRider

Active Member
#3
#3
max. intraday brokerage is @ 0.05% charged by most of the brokers..yours @0.2% ? I cant belive this...?:confused: this must be delivery brokerage...
 
B

bashu123

New Member
#4
#4
alroyraj said:
Looking at the brokerage it seems that it is 0.2% (146.1/730.5). You have not mentioned whether it is in delivery or intraday. But it can be inferred it is in delivery.
See nowadays the market moves sideways or in very small movements.
Just look at the gain in %age.
738.67-730.5=8.17
8.17*100/730.5=1.1184%
and
Your brokerage is 0.2%
As a thumb rule your total charges including brokerage and statutary charges is 3 times the brokerage (I calculated) ,so 0.2%*3 =0.6%
Of course for u it is coming to 0.366% for one leg, therefore totally 0.74%.

Therefore 1.12%-0.74%=0.38%
0.38%*730.5*100=277.59 Rs.

Now you know why trading equity intraday at percentage scheme is not renumerative,and fixed brokerage per month is the only sustainable way to make money.
Click to expand...
Hi Alroyraj,

Thanks! Which companies provide fixed brokerage?
 
S

sushant_d84

New Member
#6
#6
Please tell me about my Case

Security= Lupin
Quantity you bought=3
Gr Rate Per Sec= 770.000
Total= 2310.00
Brokrage total=11.55
NetRate Per Security= 773.850
Service Tax = 1.43
STT= 2.31
Total Net = 2321.55
 
trade4putuval

trade4putuval

Well-Known Member
#7
#7
http://www.rksv.in/

RKSV charges Rs1947 per month as service charges plus taxes. There is no brokerages for any number of trades you do. This is the Freedom plan which I use. I trade 3 to 4 times per day.

They also have the dream plan where you pay Rs.25 per order, which comes to Rs. 50 for buy and sell. In this, there is no monthly charges. I have not tried this because Freedom plan is preferrable for my trading style.:thumb:

They have their thread in traderji, through which I registered in this firm.
http://www.traderji.com/brokers-tra...line-trading-1947-part-2-a-71.html#post810301.

When I trade Nifty, break-even is Rs 1.50, that means if I buy at 6150, and I sell at 6155, i stand to earn 3.5 profit. This also includes the taxes. You can study their calculator, http://www.rksv.in/calculator.php. I have cross-checked my trades (contract note) with their calculator.

In your Bank of Baroda example, the break even is 28 paisa in intraday and Rs 1.50 in delivery. So if you bought at 730.6 and sold at 738.6 then your profit would have been Rs.632 in delivery and Rs. 772.7 in intraday.:thumb:

Lastly, if you do not trade for the whole month, the monthly charge of Rs.1947 plus tax is returned back to your trading account.
 
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