How to find the best stock market broker in India?
In stock market there is no one to inform or tell the truth. If you believe a broker just ask him whether any of his clients is trading successfully in his office. If he says yes then ask the client’s two or three years trading statement. If you are satisfied with the trading statement then you can surely follow that broker and can make your investment as per their guidance.
How to check the stock market brokers in India?
Before entering into the market you need to research about your broker. Because, some brokers without the knowledge of you will trade in your account for commissions. There are many investors who lose their amount like this. Some brokers will say we will trade in your account and will make a profit of 10 to 30% per month. Do not believe these types of brokers. There is no one to tell about the risks involved in the market.
Low and cheap brokerage plan brokers
Nowadays there is an increase in the number of brokers who charge less brokerage amount. Instead of charging for the trade like rupees 9/trade plan, 10/trade plan, 15/trade plan, 20/trade plan for a lot it is good to have a trace amount (needless of how many lots) which has many benefits. It will be very much useful for option trading.
How will benefit from low brokerage brokers
For example if a trader buys 100 lot nifty options (100*50=5000 Qty) for one rupee his investment for that will be 1*5000 = 5000. If he sells the option for 1.25 rupees then he will be earning 25% profit. But if you trade with the broker who charges 10 to 50 rupees per lot then you will face loss. In that case if you sell that option at 1.50 to 2.50 then only you will be able to make your investment money. This difference will bring you loss because 50% to 150% will be charged for brokerage. If you trade with the broker who charges 10 to 20 rupees then you will be able to make a profit of about 50% to 150%.
Low Margin money brokers
Since if there is no heavy investment in the market, some brokers might reduce the brokerage amount or reduce the margin money off future for Intraday trading in order to make the clients to trade more so that they can get more brokerage amount. They will not take care of their clients profit or loss. Their motive is to make more brokerage amount. In this case brokers will allow 60 to 80% of loss in which their client holds in their trading account. If it exceeds more than 80% then they will square off without the permission of the client. The traders also aware of the risks involved in this and since the traders are getting more profits with smaller amount they will get the margin money from the brokers.