With more inclination towards trading, the volumes of Indian Capital Markets are on the rise. The derivatives volumes are touching new peaks every year giving a big push to broking business. Such large volume and increasing community of traders lead to an upcoming of all new breed of Online Discount brokers. These brokers are offering attractive schemes to lure Investor or traders community and mainly focusses on online volumes.
What is Online discount broking
The discount broking is a concept where a broker charges significantly lower commissions as compared to market norms and attract the existing customers of other companies in the field. Since the rates are extremely low, they normally resort to lesser or automated servicing i.e. mainly online or through a call center. The lower cost encourages provide a better Return on Investment to a Trader and significant revenue to a broker.
The discount broking concept is not something new but a replication of International trend in India. In US brokers like E-trade, Ameri-trade, Charles Schwab have already proves their success in this area.
Who are the Best Discount Brokers
In an earlier articles we saw the Best Stock brokers in India. Now, let us see the best discount brokers, according to a brief study by us, are as follows.
Zerodha is among the first few discount brokers in India. The company was founded in 2010 as started their operations as discount brokerage firm. When most of the brokerages were charging on volume parameter they started charging Rs 20 per trade and change the entire dynamics. Today, they caters to almost 42000+ customers. Apart from a unique brokerage proposition, they offers fully automated signup with online account opening form.
RKSV started in Jan 2012 currently handles a volume of about 4000 crores every day. Being a technology driven platform, it offers broking at very low costs and caters to more than 60000 customers across length and breadth of country. They offers discounted brokerage plan with Rs. 20 per trade. One trade is counted as executed order. The android application, Upstox is very fast in terms of streaming quotes and enable you to trade while you are on the move.
SAS (South Asian Stocks) Online offers trading at Rs 9 per trade along with a unique proposition of unlimited trading plan. As per unlimited trading plan they offers, unlimited trading in Equity at Rs. 999 per month. Similarly, unlimited trading in MCX at Rs. 999 per month and Unlimited trading in currency in Rs. 499 per month.
TradeJini started their operations about 2 years back with an attractive offering of Rs. 20 per trade. They also supported their customers with a Call n Trade however you need to shell out little more if you plan to avail such facility.
MyValueTrade is newer discount broker based out at Delhi NCR offering extremely lucrative brokerage rates. They charge Rs.10 per trade. In another plan, they offer unlimited trading at Rs.1000 per month. Unlike other brokers, they offer all segments i.e. Equities, Derivatives, Commodities and Currency within this amount. One can aso opt for a annual plan for Rs. 10000 thus further saving Rs. 2000. Not only this, a client may also seek a refund of the unutilized amount in a annual plan.
How to choose a Discount broker
Choosing among the full service broker and Discount broker is very easy one. You need to be sure of your exact requirement. If you need research advise, if your need service and customized offering, definitely Discount brokers are not meant for you. However, if you are a Computer Savvy, frequent investor or a derivative trader and wishes to reduce your cost, then Discount broking is an obvious choice.
When it comes to choice between different discount brokers, you should look for the following parameters
- Pricing plans offered that suits your needs
- Platforms available – Though, now-a-days all brokers offers trading through desktops, Tablets and Mobile platforms. However, features that may improve your experience (like calculators, market watch linking with excel, multiple or batch order window, online customer support, etc) can be a decision point.
- Background of the Discount broker (Since your money will be lying with your broker)
- Leverage offered and Risk Management mechanism- It is important to understand that the traders are important customers of these discount broker and loose risk management may put their platform at risk. So always choose a broker with Robust Risk Management mechanism for your own safety.
- Demat Account – Few discount brokers have started very small and does not even provide Demat accounts facility. They mainly focusses on derivatives turnover in equities, commodities and currencies. It is better to take a very concious call on them as they may also turnout to be a fly by night operators.
So if you are all set for flight into the sky of Stock Markets, you must try these Discount brokerages.