Discount broker is a one stop solution for the high costs plaguing the financial domain. In a way you can compare their service to a low cost airline. The broker would offer you a platform to conduct your transactions as the low rates of commission make a considerable benefit for the client. Stock calls are available via research or through the medium of the internet in modern times. Many paid providers are there who do give a lot of ideas on which stock to invest and what to keep away. For all these services a fixed fee is levied.
The difference between discount brokers India and full time service brokers is options trading. There are brokers who levy a particular charge on the stocks beyond a specified level. In case of options trading, the brokerages have a flat rate per contract. If you calculate brokerage by this method this has a big impact on the profitability of the client. In addition one of the focal points of a discount broker is that they are unbiased in nature. As they are not going to provide you any advice it means they will not ask you to buy or sell a stock. They are not going to bother you about the constant research calls that did click while going to brush apart the recommendations under the pillow of stocks which did not perform as per standards.
In the last few years the Indian stock markets have a massive degree of change for the good. With digital trading not only a level of transparency has emerged as the business was not only known for the opaqueness but did bring down the cost. With the help of internet trading cost parameters and transparency have been taken to a new level. There are some brokers who have gone on to provide rock bottom rate for their transactions and they are known by the name of discount brokers.
Generally speaking a brokerage charges you brokerage for the platform they allow you to transact. The traditional brokers are going to levy a high charge as they offer value addition by research calls. On a lighter note the broker could even go on to claim that there research calls are supported by a team of experts. The net result is that a broker makes money only if the client transacts. More the client goes on to transact more money accumulates to the kitty of the broker. The brokers have varied rates of brokerage depending upon the frequency along with quantum of trading.
Before you are planning to open an account with a discount broker, charge out the commission charges and whether there are any hidden costs involved. A lot of brokers may claim that their commission rates are low but additional charges might accrue. Do check out the infrastructure of the broker and find out whether an alternative mechanism is involved or not. What is going to be the case if there is no internet connection.