If you don't mind, can you illustrate with some numbers? Comparing, say, fixed brokerage with RKSV and your other broker with 0.01% brokerage for a day of 5cr turnover with the TDS. Also, how are going to get the 75% brokerage back from your broker? as cash? Won't the income from the brokerage, which the broker will credit to your account, be treated as capital gains and therefore be taxed anyway?
Trading for brokerage.
- Thread starter drvinod_k
- Start date
Coming to the point of illustration there can be no comparison between RKSV and my broker. From a trader's point of view RKSV will beat the equation hands down any day. However in this case the point of focus is brokerage. As mentioned by you say I clock a turnover of 5cr I stand to gain Rs 3750 per session. Now 3750 X 22(trading sessions per month without trading holidays) = Rs 82500 minus TDS (10%) = Rs 74250. Now consider RKSV at 4900 per session i.e 4900 X 22 = Rs 107800 minus Cap Gains (30%) = Rs 75460. The difference here is a mere 1210. Considering my temperament and risk profile trading 5crs in 6hrs with fixed brokerage is too demanding and risky whereas the same 5cr (in FO + Currencies + Commodities) stretched over a period of 14 hrs ( 9:30 - 11:30 ) is comfortable. Infact more can be easily accomodated in this longer time frame. Another important factor is that in my arrangement I gain (brokerage) even if some trades go against me. Whereas with conventional trading if the trade goes against me I have to book a loss. Besides when I trade for profit I have to aim for a tgt more than my breakeven and so is the prospect of greed setting in and also the danger of waiting on a loss making trade to turn profitable. I am eliminating both here. I have put in a lot of calculations and realtime market trades to come to these figures with a generous scope of 30% + & - adjustment over a period of 1 month. I know it is easier said than done but I talk through experience based on realistic figures. Also the remuneration will be through money transfer or cheque and the premise of SEBI registered Authorised person will be correct to employ this mode of business. I hope this will satisfy most of your queries.
1) brokerage (refund): will be taxed as per your IT slab as it will be your income. TDS or no TDS doesnt matter. You have to pay tax as per slab 0% to 30%.
2) profit: same as above
3) loss: will be adjusted in future earning as allowed for various market segments
assumption:
a) there will be no loss: then 1 & 2 above are equal, no incentive to go for 1.
b) there is a loss (more likely): 1 is a bad choice.
provided brkg refunding broker effective brkg = brkg of other brokers (w/o brkg refund)
Your assumption that you will have to pay 10% tax (TDS) only is wrong
2) profit: same as above
3) loss: will be adjusted in future earning as allowed for various market segments
assumption:
a) there will be no loss: then 1 & 2 above are equal, no incentive to go for 1.
b) there is a loss (more likely): 1 is a bad choice.
provided brkg refunding broker effective brkg = brkg of other brokers (w/o brkg refund)
Your assumption that you will have to pay 10% tax (TDS) only is wrong
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I can understand his idea .......
i had similar thinking on seeing my 2009-10 ACC statement in that financial year
i gained 70k profit but my brokerage is 130k.....
but with 5yrs exp ..... IMO if u hav ability to make profit with brokerage return after overcoming all loss trades and taxes ...... am sure u can make huge profits from profits.... both the thing needs same skill :thumb:
i had similar thinking on seeing my 2009-10 ACC statement in that financial year
i gained 70k profit but my brokerage is 130k.....
but with 5yrs exp ..... IMO if u hav ability to make profit with brokerage return after overcoming all loss trades and taxes ...... am sure u can make huge profits from profits.... both the thing needs same skill :thumb:
I am hoping drvinod is not a real doctor.. Looking at his trading strategy, if a patient goes to him for a cold, he might treat you for jaundice.. Cure for Jaundice may also cure the cold, but it would have been so much simpler just to treat the cold.. ...
...
Hi Creep you are upto it again
. Markets and patients are a totally different ballgame. In markets you have a stoploss. In Medical practice there is no stoploss only loss and that includes loss of reputation also. As a doctor one has to be extremely careful. Maybe it is because of this attitude I am exploring a different avenue of protecting my capital and yet make money. Just like my patients I care for my capital also. Besides it is the end that matters. Everyone has his own story consider this as mine.Hi Dravinod,
I thought u r a newbie i m sorry for that .since u said u r experienced i belive u might have gone through the cycle every trader has ,so u might came to the conclusion after analysed the real market very well.
My only doubt is how you ll eliminate the fear and greed because u have to book a profit more or less 0.05 - 0.1 .what will u do if the price go down immediately by 0.1 % after u bought or short will that is not called a loss.dont u have the pressure to book profit in next trade.
Regards,
Venkatesh
I thought u r a newbie i m sorry for that .since u said u r experienced i belive u might have gone through the cycle every trader has ,so u might came to the conclusion after analysed the real market very well.
My only doubt is how you ll eliminate the fear and greed because u have to book a profit more or less 0.05 - 0.1 .what will u do if the price go down immediately by 0.1 % after u bought or short will that is not called a loss.dont u have the pressure to book profit in next trade.
Regards,
Venkatesh
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