Discount Brokers

Well, are you excited to learn about something new? Does this ring any bells?

You will be surprised to know that you already know most of the discount brokers out there. Some of you must have watched the Ads on TV and some of you must have watched targeted Ads if you have ever googled anything remotely close to the Stock market. 😜

Let me refresh your memory here, during the recently postponed IPL, you might have come across the name Upstox and their rather peculiar Ads on how easy it is to trade on their platform. You might have seen interesting ads of Groww in TV and YouTube. If you use Google Pay quite often, then you must have “scratched” your way into an offer for 5 paisa account creation.

If you follow business news regularly, then lately you may have skimmed through a news on a resolution being passed that the Zerodha directors could take home a salary of up to 100 crore per annum which created a lot of buzz among the netizens and finally the CEO Nitin Kamath had to come up with a clarification on Twitter.

There you Go... So basically, these companies are examples of discount brokers which are getting widely popular, all thanks to the Unforeseen Pandemic and its never-ending lockdowns. If I may rephrase, they were already popular among market participants but now they have clearly expanded their territory outside the circle of well-experienced traders and out to the general public with a basic understanding of the Stock Market.

What is a Discount Broker?

A discount broker is a stockbroker which allows us to carry out buy and sell orders at a marginally smaller commission rate. Unlike a full-service broker, a discount broker will not manage your portfolio, provide you any investment advice or analyze the market and take trades on the client’s behalf.

The discount brokers handle their operations only through online channels including queries, supports and trades. Thus, eliminating the requirement of a middle man (Dealers/Traders) between the client and the stock market. This basically entitles the customer as a trader.

A discount broker does not function through branches like a full-time brokerage and they depend on technology and online platforms to fulfill customer needs which enables them to save enough cost which they ultimately return to the customer by collecting a small brokerage fee. Since the brokerage is low or discounted, they are termed discount brokers.

Discount brokers in India mostly charge a flat fee of Rs. 10 –20 per executed order. However, traditional brokers may claim a percentage of the trade value as a commission fee. It may vary from as low as 0.10% to as high as 0.75%.

Discount brokers are always an advantage for people who has ample knowledge of trading, who is a frequent trader with a smaller capital. The smaller brokerage fee will help them increase their profit or thus will get a better return on their invested capital.

Impact of Discount Brokers

From its early days and well into the starting half of the last decade, the Stock market was not something easily accessible to an average person. Only the wealthy or people with actual exposure in this domain were able to trade in stock markets. Now the discount brokers are revolutionizing the stock market by reaching out to everybody with such a low commission rate which stands affordable for a normal person.

The internet boom and the upgrades in the telecommunication sectors can be deemed as the prime reasons for this revolutionary shift. To seize this opportunity, a lot of discount brokerages made their entry into the Market with impressive offers, sparking interest in those millennials to open their accounts with them.

To put this into perspective, I have a discount broker account because I can take trades in thousands and not in crores. For newbies like us, with smaller capitals, a higher brokerage is clearly unaffordable at this stage and we are forced to pick a discount broker.

The effects of this can be seen when you check the active users of India’s top 2 discount brokers, Zerodha and Upstox. They are far ahead in the race with a hefty lead. One might even say that these two brokers are the only few firms out there that have hit a jackpot out of this Covid-19 Pandemic. The world is still fighting this battle and we are all set to embrace this new normal.

Upstox is a discount broker backed by Ratan Tata. to open an account,

>>>>>Click here<<<<<

Zerodha is a discount broker and it is India's biggest stockbroker. To open an account,

>>>>>Click here<<<<< 

Groww is a discount broker. To open an account,

>>>>>Click here<<<<<