Ways2Capital: What is Online Stock Broker?
Posted by Ways2Capital on December 17th, 2018
Why should we like Low Cost Online Stock Broker or Discount Online Stock Broker? For our online stock trading and for online stock broker day trading, here we will learn here today.
It is very important for you that if you are a Day Trader or you are trading in Future & Option then you should have a Low Cost Online Stock Broker,
And if you are an investor, then you invest your money for long term in the stock market, if you do not have a Low Cost Online Stock Broker, you will trade here for 5 to 7 times in 2 to 10 years.
What is online stock broker?
First we need to know what the stock broker is, and why we need a stock broker.
You must have seen that if we do any banking related transfers, that is to deposit money in the bank, or to make a bank FD, or to deposit a check, then for all of these you have a Savings Bank account, or your business, you have to make a current account and for the savings account and current account, we go to the bank, and the bank gives us the service.
Similarly, if you want to invest in the stock market and you have to make a trading account, then you have to create a De-mat account and a trading account, and the services we make online are available through the online Stock Broker, which is very accessible to many banks.
When we buy or sell any shares by opening their through account, these people of this online service take charge, so they call online Stock Broker.
Why should prefer Low Cost Online Stock Broker or Discount Online Stock Broker?
If you are a Day trader or trade in Future & option, then you will save a lot of money from the Low Cost Online Stock Broker because they have very little brokerage from the rest of the stock broker firm.
For an example, I had an account in the bank's securities, in which it traded in stock options. Now, people who buy me a call option would get me rs.110 (with all service tax), and if they were to sell the call, they would also be rs.110, that means buy and sell me at a call total rs. 220 used to be.
It means, if the profit is above 220 then only I will be profitable, otherwise I will lose. Now in this trade If I have 500 total profits, my profit in virtual is only Rs.280, because my brokerage firm is taking the money back as a brokerage cost.
Here I talked about a single trade, but if I take 5 or 10 trades in the day, then my daily brokerage will be more than Rs.2000.
And here you have given an example of taking a call, but if you take more than one call in it then it is also cost multiply.
Now if my account is with Low Cost Online Stock Broker, and if I take any trade in it, then those people charge per trade rs.20 for buy and rs.20 for sale and also add service tax. It was 80 only. This means that if I had a profit of Rs.500, then the actual profit would be rs.420 here, and only rs80 would go to my brokerage firm, which means that I will have more profits here.
And if you take 5 calls of the same strike price of a stock together in the same trade, you will still have to give a cost rs.20 for buy and rs.20 for sell. This means that there is no multiply in getting more calls in the same trade.
If you see year wise here, you will save a lot of money, give an example of the option above, but if you also look in stock trading, you will save a lot of money.
Or if you want to take advice like a stock market tips in commodity, future and option an individual can also receive a recommendation in currency market. According to his individual risk appetite because, in currency derivative an individual can trade with the minimum investment as compare to the equity, commodity and its derivative.
Signature – Mahendra Rajput [Senior Digital Marketing Executive] | Ways2Capital provides mcx tips , Intraday Stock Tips, NCDEX Tips, Forex tips. We provide full support also during market hours. | To get more details- visit us on http://www.ways2capital.com | Contact us on 0731-6626191.