How do brokerage charges affect my profits?

Brokerage charges directly reduce your profits from buying and selling stocks. The higher the brokerage, the lower your net profit, especially for frequent traders. Keeping brokerage costs low is key to maximizing overall returns from the stock market.

What Are Brokerage Charges?

Brokerage charges are fees that stockbrokers charge when you buy or sell shares through their platform. These fees can be fixed or a percentage of your transaction value. There are two main types: delivery brokerage (for holding stocks) and intraday brokerage (for buying and selling the same day).

Different brokers offer different plans—some charge flat fees, while others offer zero brokerage on specific trades. It’s important to understand these charges because they directly cut into your profit margins.

How Do Brokerage Charges Affect Your Profits?

Every time you buy and sell stocks, brokerage is deducted. Here's how it impacts you:

• Reduces Net Gains: If you earn ₹2,000 profit but pay ₹500 as brokerage, your actual gain is only ₹1,500.
• Losses Become Bigger: Even in loss-making trades, brokerage is still charged, making your total loss worse.
• Frequent Trading Costs More: Intraday traders pay multiple brokerages daily, which adds up quickly over time.

Why Choosing the Right Broker Matters

Selecting a broker with low or zero brokerage is smart if you want to keep more of your profits. Angel One, for example, offers zero brokerage on equity delivery and competitive charges for other segments—ideal for beginners and active traders.

Also, low-cost brokers allow you to invest small amounts frequently without worrying about fees eating into your returns.

Real Example of Brokerage Impact

Suppose you bought ₹1,00,000 worth of shares and sold them at ₹1,05,000. That’s a ₹5,000 profit. If your broker charges 0.5% brokerage both sides (buy + sell), you’ll pay ₹1,000 as brokerage. So your actual profit is ₹4,000—not ₹5,000.

This shows why it’s important to track charges carefully. Even if profits look good on paper, brokerage eats a chunk of it if you aren’t careful.

Brokerage charges may look small at first, but they have a big impact on your actual profits over time. Whether you're a long-term investor or short-term trader, choosing a broker with low or zero brokerage like Angel One can help you retain more of your returns and grow your wealth faster.