Trading in financial domain advocates selling and buying of shares. On purchase of shares you become a small part of the company and you sell it a higher price to obtain profits. Brokers are present in the trading sector that renders their expertise in the form of advice. They give you valuable inputs to gain profits on the shares. For the services they provide the brokers charge a small fraction of profit in the form of commission.
Of late main firms have come up with a revolutionary concept termed as Zero brokerage. This has gone a step ahead in the form of zero brokerage trading. A few of the companies also provide zero brokerage. With the concept gaining momentum this new form of business is embarking new milestones. This helps to increase the monthly returns of the traders. A marked reduction in turnover was observed because the brokerage charged by the brokers was on the higher side.
Since 2015, the investments undertaken with the leading broking houses were assumed to be brokerage free. This is an initiative that was started by the companies in India to encourage investors to trade. At present there are only 1 million investors in India, which is really negligible figure in a country like India where 65 % of the population is below 35 years. This drive is aimed at attracting new investors to pick up trading.
In order to attract new investors the need of the hour is to introduce the concept of zero brokerage. At the same time the entire experience of trading has to be user friendly and even hassle free. This is the correct time for the investment culture to really flourish.
But zero brokerage schemes are restricted to equity investors. The partnership or the corporate firms are anticipated to pay the normal rate of 0.1 % or the Rs 20 per order whichever appears to the lower among the two.
These zero brokerage plans are expected to aid investors to enhance their savings and earn profits in the long run.
Features associated with Zero brokerage
- The benefits of zero brokerage can be enjoyed by an investor for an unlimited period of time
- This scheme is bestowed with lifetime warranty with no major restrictions on the trade front
- No form of strings is attached to this type of brokerage in the form of capital amount or even the required amount to trade.
An example will make things more clear. Suppose an investor has a turnover of Rs 20 lakhs on delivery that is based on trade and the brokerage is 25 paisa which means that the sum adds up to Rs 25,000. When the concept of zero brokerage is introduced you do not have to pay a single rupee and that would enable you to earn an increased return of 2 %.
To sum it up zero brokerage is a new concept that is expected to churn in instant results. More and more people will pick up trading because of this noble initiative.