Often when new people enter into the world of financial markets more commonly known as share market, they face many challenges.
The challenges of making the right trading decision, the challenge of maintaining the right amount of capital and also the selecting the right Broker.
The choice of the right broker can make a huge difference in the trading outcome of the trader or investor.
The payoff process, the ease of trading, maintenance of proper contract notes and a good trading software, all of these are dependent upon the actions of the broker
So, today I am presenting you on how to select the right broker.
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Readers are requested to present their own views about their broker and give them a rating upon five. Some of the main things to keep in mind before selecting your broker can be: –
Type of service of the Broker:
You can select between a full-service retail broker or a discount broker.
The main differentiating factor between the two is that the retail broker can charge you a percentage of your trade value as brokerage.
For eg: For Religare Securities, this can be between 0.3% to 0.5% of your traded value.
We should keep in mind that this is charged on both – the buy order and the sell order separately.
On the other hand, the discount broker can charge between Rs.10 to Rs.20 per trade irrespective of the volume of trade.
So, if you are a very frequent trader, choosing a discount broker will be a much better option.
2.Frequency of trading:
There are certain investors who invest their money for a long period of time.
This can be a month, a year or even multiple years.
For them, the brokerage is not a major factor. But they will value personal interaction with their brokers and also their convenience of trading and advisory.
So, retail brokers will be a much better choice for them
Compared to that, traders who trade multiple times a day can have a huge difference if their brokerage cost is high. So, the discount broker will be a better choice for them.
3.Online or offline trading platform:
Online trading platforms are provided by most brokers nowadays to their clients.
A trading software is provided to the client which the trader can trade by themselves from the comfort of their homes.
There are also offline facilities provided by most brokers
These facilities are for people who are usually busy with their jobs and do not have time to use their computers.
For them, call and trade is a better option where they can call their brokers and place their orders.
The trader can also choose whether he or she will require a financial advisor to select which stocks to buy or sell.
There are also other kinds of traders who are financially literate.
These types of traders have the skills and knowledge to take their own trading decisions by using fundamental or technical analysis or sometimes purely based on their guts and experience.
So if you require trading advice, the full-service brokers i.e. the retail brokers will provide you with Relationship managers who can call and provide you with investment ideas throughout the day.
Based on these factors, here is a list of the top brokers in India for the year 2015. This list can be subjective in nature.
Feel free to comment your own choice of broker and rate them.
Best Full-Service Retail Brokers in India:
They are the biggest and best known full-service broker in India.
Their rates are usually between 0.2% to 0.5% depending on the value of trades.
Their service is decent and their user interface is very high in demand.
They also provide easy integration with their ICICI bank accounts for transfer of funds which makes withdrawal and deposit of money into trading account very easy.
So, we can say they are a Good Broker for an investor but not for the trader.
This company was founded in the year 2000 and is India’s 2nd largest broker as per the number of customers.
They have more than 1950 offices across 575 cities in India.
They also provide services like asset management etc.
As of July 30th, BNP Paribas has purchased ShareKhan for Rs 2,200 crore.
They are also a well established full-service broker in India.
They have their branches in all the major cities in India.
Hence they are able to cater the needs of all their major clients and provide their services.
Their online service is decent but brokerage is not that competitive.
Best Discount Brokers in India:
RKSV was founded by three Indian friends who were traders in the NYSE. Within just 2 years of their establishment, they have more than 1,00,000 and more clients.
Their brokerage structure is very simple.
They charge a flat brokerage of Rs.20 per order irrespective of their trading volume.
In their Dream plan, they provide an additional 5 free orders.
They also have unlimited trading plans for large-scale traders where they charge about Rs.1999 per month for unlimited trading.
They also provide the NEST platform for trading in PC and also the RKSV mobile app which provides real-time data to the traders on the go and place orders from it.
Zerodha is one of the oldest discount brokers in India.
It has more than 50,000 clients presently.
Their brokerage is very competitive and is suitable for frequent traders.
The account opening process is also very simple and can be completed online.
They also provide the ‘PI’ trading and charting software which is very interactive and useful.
It also allows writing custom algorithm.
Discount brokers like Zerodha are new to the Indian Trading Scenario and are giving a stiff competition to their retail counterparts.
This a very new discount broker.
They provide rates even lower than RKSV and Zerodha.
They charge the most competitive rate of Rs. 9 per trade.
They also provide unlimited trading at Rs. 999 per month.
Its main office is based in Bangalore.
They also provide the NEST trading platform and provide assistance to the traders in terms of the process of trading and in case of technical difficulties.
Hence, we can see that selecting the right broker can be a major stepping stone in your path of becoming a successful and profitable trader.
Feel free to give your feedback by using the comment box below