Brokerage
Trading & ordersThe fee a broker charges for executing a trade.
In plain terms
Only one line of the bill. STT, stamp duty and exchange fees are charged on turnover regardless of profit.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Cost drag
Trading & ordersThe cumulative effect of brokerage, taxes, spreads and slippage on returns, rising with how often the account is turned over.
In plain terms
An account turned over twice a month pays roughly 6% of capital a year in friction before any question of skill. Choosing a rhythm is choosing a headwind.
Discount broker
Trading & ordersA broker offering execution with little or no research or advisory, typically at zero delivery brokerage and a low flat charge per intraday or F&O order.
In plain terms
A ₹20 saving per order is irrelevant if the app freezes on the day the NIFTY moves 3%. DP charges, annual maintenance and square-off penalties are where a zero-brokerage broker actually earns.
Proprietary trading
Trading & ordersAlso called: Prop trading
A brokerage trading its own capital rather than client money, mostly intraday and in derivatives.
In plain terms
Plumbing, not a signal. These desks have no directional view worth copying, and the market would work far worse without them.
Transaction costs
Trading & ordersThe total of brokerage, STT, stamp duty, GST, spread and impact.
In plain terms
Charged per trade, so frequency is the largest controllable drag on returns.
Payment for order flow
Trading & ordersAlso called: PFOF
An arrangement found in some foreign markets under which a broker is paid to route client orders to a particular firm rather than to an exchange.
In plain terms
Not part of the Indian arrangement. Your order reaches the exchange order book, and the broker is paid by the brokerage shown on your contract note.
STT
Regulation & taxSecurities Transaction Tax — a government levy collected on exchange trades.
In plain terms
Often larger than your brokerage. Unavoidable, and charged on both sides for delivery.