Brokerage

Brokerage is what your broker earns for routing your trade to the exchange. In India the figure has collapsed over the past decade, but the *total* cost of trading is more than just brokerage, and understanding the difference protects your returns.

How it works today

India now runs on two broad models. Discount brokers (the segment Zerodha pioneered, alongside Groww, Upstox, Angel One and others) typically charge zero brokerage on equity delivery and a flat fee, commonly around ₹20 per executed order, on intraday and F&O trades. Full-service brokers charge a percentage of turnover but bundle in research, advisory and relationship support. For most self-directed investors, the discount model is dramatically cheaper.

Brokerage is not your only cost

This is the part beginners miss. On top of brokerage you pay statutory and exchange charges that the broker merely collects: Securities Transaction Tax (STT), exchange transaction charges, SEBI turnover fees, GST on brokerage and exchange charges, and stamp duty. When you sell delivery shares, depositories (CDSL/NSDL) levy a debit charge even when delivery brokerage is zero. So a "free" delivery trade still carries unavoidable costs.

Why it matters

These costs compound against you, especially for active traders. A frequent intraday or options trader can pay far more in cumulative charges and STT than in brokerage itself. A long-term investor who buys and holds barely feels them.

Practical POV

Don't pick a broker on headline brokerage alone, read the full contract note after a trade; it itemises every charge. Many brokers also levy a yearly demat Account Maintenance Charge (AMC). The cheapest path for a buy-and-hold investor is a low-AMC discount broker with zero delivery brokerage. Active traders should model the all-in cost per trade, because frequent churning is where charges quietly erode profits.