In every country, the economy runs on big companies. These companies collect the money from the general public in the form of shares and start their business activities. As and when the company makes a profit the shareholders get some dividend. These type of shareholders are called investors. The type of shareholders varies as per the type of shares, and hence some type of shareholders can get a fixed return while some may not. There are also other people who just like to trade in these shares which are listed on the stock exchanges and the rates move fast. Hence they love to buy shares at less prices and when the prices increase they come to sell them. This activity is called trading, and many people also earn good amount from this trading activity.
The fundamentals of brokerage:
To carry out the trading one needs to have a Demat account as well as a trading account which he can open with any such service providers. There are many banks as well as other share trading companies in the market who can help the trader in trading. For their services, they charge a small amount which is called brokerage. For a trader, the brokerage is an expense and hence to optimize the profit on every trade he needs to see that the brokerage amount is at the lowest. Hence he needs to find out the cheapest broker in the market. Same is the pattern of commodity market also. But in the commodity market, there is a lot size of every commodity, and hence the brokerage amount is huge. To save the expense here also one needs to get the cheapest commodity broker so that he can earn on every lot he trades on and reinvest the same amount which can again turn to profit.
The low brokerage plans:
In the market, there is minimum brokerage in India which the service provider charges. Now the simple question comes here is why any service provider will offer a low brokerage plan. Well, the logic behind such scheme is simple. The brokers do not offer the scheme without any conditions and to each and every trader. They search for the trader who has high volume and love to trade in huge lots. Hence the service provider can get the brokerage amount also to a good extent. Though if one see it in percentage, it can be much lower, but when it comes to the volume, it becomes a handsome earning for the service provider. Hence in some cases, if the client is ready to pay the brokerage in advance or provide a cheque of a huge amount of investment in the market, the service provider offers low brokerage schemes also. Many times a service provider who is new to a particular area also offers such scheme for a limited period so that he can attract more clients and in a short span of establishing the branch he can develop the same as a profit center.
