For a trader, it is necessary to save on his brokerage. For the broker, it is necessary to get good clients who can trade in bulk so that the broker can have more revenue in the form of brokerage. For those who love to go for trading in bulk, it is necessary to go for a broker who offers the services at a low rate. As the trader needs to have the trading on the platform of the broker, he needs to trade with the help of a terminal operator where he can call and trade.
The broker and brokerage:
For a broker, the revenue from the brokerage is the main source of income. Hence no broker is ready to compromise with the rate of brokerage. As the market has no standard specific for the brokerage the same has to be decided between the trader and broker at the beginning of the trading only. There are various viewpoints as per which the trader and broker negotiate the rate.
The trader who deals in bulk needs to control this cost. Hence it is imperative for him to find the best broker who can offer the services at a low cost. He is concerned with the trading only, and in majority cases, the trader has his own computer and know how to place an order or carry out the trade. He needs the support of the broker to have the desired limit and settle the account at a regular interval, and therefore he pays the brokerage. He needs to know the rate of the brokerage in the early stage of a relationship and get the best brokerage calculator with the help of which he can know how much brokerage he pays.
From the broker’s viewpoint, the trader who deals in bulk is an important one as with a low rate of brokerage also he can get a good amount as revenue from one trader. If he has a good client base in the same segment, he can have a better income. However, he needs to know that the trader really deals in volume and hence; he needs to check his history of trades with the help of the past statements.
The types of brokerage:
One can find several types of the brokerage in the market. Some of the brokers go for the transaction to transaction brokerage while some go for the advanced brokerage. In the advanced brokerage, the trader needs to pay an amount towards brokerage for a specific period so that the broker is safeguarded with his revenue. This brokerage is valid for a specific period, and after completion of that period, the trader needs to pay the brokerage again.
In some cases, the brokerage is counted as a fixed percentage for the transaction that one has done on the platform. Hence every broker follows a different pattern for the brokerage and the trader needs to be sure about how the brokerage will be counted with a particular broker. One also needs to note that the brokerage for the intraday and delivery trades is different, and the same must be discussed before starting the trade.