A stock is an ownership of a company where each share denotes a part of ownership for a shareholder or stockholder of that company.  A group of shares together is known as stock holdings.  Stocks are traded in financial markets known as stock exchanges. To name a few such institutions – The New York Stock Exchange in the US and the Bombay Stock Exchange in India.

Investors buy shares of the company that is listed on the stock exchange and become a part owner of that company. They can then trade it in short term for profits or hold it for long term as an investment. Shares come in three different forms common, preferred and unlisted. Most shareholders will invest in the purchase of common stock as the aim will be growth of capital in the long or short term as well as income from interests and dividends.

A broker can be an individual or a firm who helps such interested parties to execute their preference for buying or selling shares. This buying and selling of stocks has a integral cost as part of the process charged by the brokers as their service fees. It is known as Stock Commission and is the brokerage that every brokerage house or sub broker gets for helping process the trade.

One has to pay as commission a charge percentage of the trade value. It is the quantity multiplied by the share price. It usually stands between 0.1% and 0.5%. Stock commissions are different depending on the nature of the trade one indulges in. For Futures and options the amount would be different from what one would pay for an acquisition,derivative or investment holding.

Brokerage is fairly low on Derivatives because derivatives charge only on the option premium. Till the advent of online trading the only way to indulge in stock trade was through the phone. Calling up brokers to take their advice or just to direct them to buy or sell for you. Now online trading has opened up a whole new world of trading possibilities where banks and share trading organizations can be accessed easily and selling and buying can be done without having to directly connect with a broker. With sites like pfgbestcommission, moneycontrol etc there have been a fall in the brokerage as the competition is now much more and has lead to a boom in the share trading market as well.

Stock commission would vary from broker to broker and also on the kind of trade indulged in. The following is a rough list of the amount charged by the different banks and brokerage houses in India for general buying and selling of stocks-

ICICI Direct – The commission for Cash delivery in ICICI Direct varies from 0.75% for value less than Rs. 10 Lacs to 0.25% for value above 5 Crores

HDFC – The commission for Cash delivery in HDFC is about 0.5% Sharekhan – The commission for Cash delivery in HDFC is about 0.5%

Ackley  has penned down different write-ups on forex services.In this article  he briefly describes  many things concerning  pfgbest commission.

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