For a trader in the stock market, the brokerage and exposure margin money are the most significant issues to focus on. For a broker, the brokerage is the primary source of earning, and that is why he never compromises to it. On the other side, for a trader, it is not easy to bear a high rate of brokerage that is why he loves to go for a service provider who can offer services at a low rate of brokerage.
While opening the Demat and trading account, the trader has to provide some amount to the service provider. Presently as per the market practice, it is a minimum of 10,000 which one needs to pay to start the trading.
The trader can trade in the intraday segment where the amount is invested for a day only. If the exposure is provided by the service provider up to 10 times, one can buy the shares up to the value of 100000. Hence the trader can have better chances to make more money in short duration. In the intraday segment, one needs to reverse the trade in the same trading session. If one fails to do so, the transaction can be converted to the delivery, and it attracts more brokerage. However, the exposure to the same is reduced to the amount he has used in such transaction. Therefore for every trader, the margin money, as well as the exposure, is a serious point to consider. The traders who believe in bulk trading but do not have huge margin money to offer needs to find such service provider who can provide more exposure for the given margin money and also provide trading services at a low rate of brokerage. If a service provider offers such services, it can be beneficial to the service provider as well as the client. In the market, one can find such a service provider but needs to check him thoroughly with the limit of exposure as well as the brokerage rate for bulk trading.
Usually, companies do not prefer to offer services at low brokerage & high exposure because it is their main earning. Those companies who want to attract more clients from the market offer various schemes which can provide some benefits to the clients also. Sometimes they come up with a scheme of a low rate of brokerage, and sometimes they offer more exposure to the clients who want to go for bulk trading.
The low brokerage:
Many service providers in the present market offer service at low brokerage rate with certain conditions. If the branch of the service provider is new to the area, it offers a low rate of brokerage to attract new clients. The company has some specific event it offers benefits of low brokerage rate to the client base to make the event a memorable one. In case of heavy competition in the market to keep the business running sometimes sucks service providers offer services which low rate of brokerage to remain in the competition. Hence every service provider may have a different reason, but the client can have the benefit of a low rate of brokerage.