Lowest brokerage charges in option trading
Are you searching for lowest brokerage charges for Option trading or Future Trading then you are at the perfect place. Here at Investallign, we do offer online trading account with cheapest commission rates & best services in Industry.
When we talking about future and option segment, 1st we start with what exactly is future and option trading so if you are beginner then its help you.
Future Trading?
Future trading involves trading in contracts in derivatives market, where two party mutually trade counter side one has bullish view and other has bearish view on particular stock.
Note, after reading through the following points you have more clarity about Future Contract
- Future contract base on underlying
- Fix lot size
- Easily tradable
- Future contract is time bound
- Always Cash settled
- Margin contract – to hold future contract pay specific margin ( Span margin )
Before you start your 1st Future trade keep in mind that Future trading involve market risk and leverage risk.
Open Free Account for F&O Trading
Option Trading?
Like future trading same here option contract between two parties who are to bullish orbearish on particular stock of lot at specific price on particular expiry date. Here Specific Price called strike price and bullish represented “CALL” and Bearish represented “PUT”
Below key point need to understand basic terminology in Option Trading.
Call buy – bullish
Call Sell – Bearish
Put Buy – bullish
Put Sell – Bullish
Like Future trading option trading also involve risk but here if you buy Option your risk is limited to premium paid but in same time if you sell option contract your risk is unlimited like future contract now days in India Option Trading 90% of trading volume at exchange.
When its comes to Future & Option Trading there are few things that need to consider before choosing a right stock broker for you
- Technical Software – high performance trading software with in-build charting tools and strategy Analyser
- Lowest Brokerage in F&O
- Customer Support Centre
- Transaction Charges
- Trading academy – Knowledge base Blog or Video library
Compare Discount Brokers for Lowest brokerage in F&O
Best Broker for Option Trading in India
Now, will discussed about Top 5 Brokers for Option Trading in India who fits above criteria.
When its comes to option trading brokerage rates in India. Every Broker has own structure. Will compare Two Leading Discount Broker and Three Leading Traditional Broker here.
1. Zerodha: Zerodha is pioneered the discount broking model in india.
- Leading Discount Broker who offer Zero Delivery Brokerage
- Lowest Brokerage charges in Future & Option Trading account – Flat Rs 20 Discount Brokerage Charges in Future and Option Segment.
- Zerodha allow 5 times high exposure in Nifty Future and Nifty 500 stocks with low brokerage in Intraday
- Zerodha offer Direct Mutual Fund Platform.
- Zerodha Varsity is unique knowledge university for novice to Professional trader and investor.
- Zerodha Kite (web)& PI( Desktop ) trading Platform offer streaming trading experience with facility to algorithm trading
- Ready to use charting tools, user friendly UI and fundamental analysis too.
- Zerodha has 22 Support office in India and more then 500 dedicated support Team
[ Also Know : Lowest Brokerage Charges for Intraday Trading ]
2. Angel Broking: is one of leading traditional broker in India. Angel Broking founded in 1987, Currently Angel has 3,06,541 active clients(2017 – Source: NSE )
- Option Trading Brokerage rates vary from Rs 30 – Rs 50 per lot.
- Future Trading Brokerage rates 0.01% – 0.05% on traded volume.
- 3x Intraday exposure in Nifty Future & other active Futures.
- More then 200 support office all over India
- ARQ automated recommendation engine for new investor.
- Angel offer mobile trading , web trading , Angel Broking Speed Pro .
3. Motilal Oswal: when we discussed about Traditional Broker then MotitalOswal name top of the chart. Because of their research and Pan India presence. MotitalOswal started in 1987 and 2,62,000 active clients in 2017 ( Source : NSE )
- 2000 + Active Sub Broker Network in Pan India
- Best in house Research Team
- Rs 30 – 100 per lot option trading brokerage rates.
- 01% – 0.04% Future trading brokerage rates.
- Web App , Desktop App , Mobile App with Smart Watch Support
- Margin Funding facility
[ Also Know : Futures Options Trading Brokerage ]
4. ICICI Direct: is a Banking Equity Broker, leading in chart in UCC activation in 2017 ( Source : NSE ). In 2000 Icici Bank started its broking arm ICICI direct.
- 3 – IN – 1 Account
- Rs 30 – 100 Per lot Option Trading Commission
- 03% – 0.05% Intraday Future Trading Commission
- Wing range of investing products
- ICICI Trade Racer web base trading platform.
- More then 100 location presence in India
5. UpStox: Upstox formally known as RKSV established in 2012 based out in Mumbai. They also offer Discount Broking services in India.
- Offer Rs 20 – per order in Future & Option trading brokerage charges.
- Own Frontend trading terminal Upstox Pro.
- User friendly Mobile trading platform – Android &Iphone.
- Head office in Mumbai with 150 + support staff
- They are backed by some kalaaricapital ,Ratan Tata and GVK.
Above comparison its clearly show that lowest brokerage for option trading in India provided by Zerodha and upstox. On High Leverage part Zerodha , Angel &Upstox are more or less equal. Pan India Presence Angel Broking , Motilal Oswal , ICICI Direct &Zerodha. And last but not the least Important aspect of Trading Terminal Zerodha , Angel &Upstox are leading.
So base out above calculation Zerodha is Leading in Chart of lowest brokerage charges in Future & Option Trading, best trading platform with pan India support network.
In the End will need to understand that only Brokerage , trading terminal or high exposure not only tools for win , Future & Option Trading understanding required for success
Zerodha Varsity – knowledge University for Future & Option Trading
If you Interested in Commodity Trading MCX – Compare lowest brokerage in MCX market.
[ Know About : Best Discount Broker in India ]
Case Study : Future segment (Nifty)
Mr. Dhaval has 1 lac fund for Trading with M/S X company which charge him Brokerage 0.02% for intraday
Nifty Range we assume whole year – 5200 to 6200
If Mr A is a trader in Nifty futures, who wants to double his capital by intraday trading within 1 year, then see the calculation below and see why a low brokerage is absolutely MUST to achieve this aim.
Who – Traders in Nifty Futures
Aim – Double a Capital of 1 lac in 1 year
How – Trade in Nifty Futures on Intraday Basis
With a Capital of Rs.1 lac, you should be able to trade in 4 lots of Nifty Futures at current rates & for doubling your money , need to earn 500 Nifty Points.
Now
If he trade in Nifty than , approximate working days 200 , considering that we are trading on daily & Intraday Basis ,
You need to earn 500 points / 200 Days : Rs.2.5 Point Per day
Looks Difficult to earn Rs.2.5 Point per day ?
No
But control your excitement and see below
Total No. ofDays =200 (Approximate )
Total Point to be earned in Nifty =500 points
Total Expected Money to be earned in a Year = Rs. 1,00,000( 500 points * 4 lot * 50 lot size)
Assuming that all our trade wont be convert into profit so ,
He does 2 Trades per day
Total No. of Trades Per Day = 2
Total Turnover Per day = Rs.44 Lacs (Avg nifty range 5500 *50 lot size * 2 (BUY & SELL) * 4 ( Traded lot) * 2 ( times trade in a day)
Total Brokerage Per day = Rs.880 (44,00,000 (Turnover Per Day) * 0.02% ( Brokerage)
Total Brokerage Per Year = Rs.1.76 Lacs( Rs.880 Brokerage Per Day * 200 Day of Working )
Net Profit / Loss = Total money earned – Brokerage – Statutory Charges = Rs. 1,70,000 Loss {Rs. 1,00,000 profit — 1,76,000 Brokerage — 94,000(Approx) }
Doing Profit is not in control of us but Saving of Brokerage is !!!!!!
How ?
If Mr. Dhaval pay Rs.20 per Order than Brokerage to be paid by Mr.X is just Rs.16000
Saving almost 91 % of his Brokerage ,
Penny saved is Penny earned !!!!