Decoding Trading Costs: The Brokerage Calculator
Success in trading isn't just about picking the right stocks; it's about managing your costs. Every trade you make involves multiple charges that eat into your profits. Even if your broker offers "zero brokerage," you will still encounter government taxes, exchange fees, and regulatory duties.
The FINRA Trading Guide highlights that these "execution costs" are a critical component of a trader's risk-reward ratio.
Common Trading Charges Explained
Brokerage Fee
The fee charged by your broker for executing the order. This can be a flat fee per trade or a percentage of the total trade value.
STT / CTT
Securities Transaction Tax. A government tax levied on the purchase and sale of securities listed on stock exchanges.
Exchange Transaction Charges
Fees collected by exchanges (like NYSE, NASDAQ, or NSE) for using their trading platform.
GST / Value Added Tax
Tax applied to the brokerage and transaction charges services provided by the platform.
Identifying Your Break-Even Point
One of the most valuable features of our calculator is determining the "Break-Even Price." Due to buy-side and sell-side costs, a stock must move a certain number of cents or points in your favor before you actually start making a profit.
According to SEC guidelines on investor fees, high-frequency trading in accounts with high fee structures is one of the leading causes of underperformance for retail investors.
Intraday vs. Delivery
Most brokers and governments have different fee structures for Intraday (buying and selling on the same day) and Delivery (holding shares overnight). Delivery trades often have higher regulatory taxes but may have lower brokerage incentive rates depending on the platform.
The Impact of "Slippage"
Beyond the visible fees calculated here, traders should also account for Slippageβthe difference between the price you want and the price you actually get. Using this calculator helps you set realistic profit targets that account for all friction in the market.