The trading is an area which attracts the traders to earn a profit. Those traders who know about the corporate world and change in pricing trend can make the right move and earn a profit. The trading is the skill that one can go within the stock market and make a considerable profit. The profit is the main motive for every trader, but it is necessary to take the calculative risk before trading. There are many companies in the market in the share of which one can go for frequent trading. The basic of the trading is simple as one needs to buy the shares at the low price and sell them at a higher one.
The difference amount between these both prices is considered as the profit. However, it is half-truth as there are many other expenses that one has to bear. Among these expenses there are broking charges and taxes of the government are included. The government charges cannot be avoided by anyone, but the brokerage is a charge that one can negotiate on with the broker. The brokers usually are not prepared to compromise here at it is the known part of their revenue. Hence one needs to make them understand that even if he allows the discount in brokerage, he can be in benefit. In many cases, the brokers know this and hence immediately allow the account after knowing the profile of the client. If one has a huge volume of trading, he can ask the top share broker to have an account with.
Why the brokers allow the discount?
There are not many reasons why the broker will allow the discount. The top share broker can also allow a discount on brokerage in specific situations. Here are some of such incidents in which the biggest broker may also be forced to check the probabilities of offering a discount on brokerage.
- Mass accounts: In the event when one can have accounts opened in bulk, one needs to think before fixing the brokerage rate. The mass of accounts is possible only when the brokerage rate offered is lower than what other brokers offer in the market.
- New area: The broker who is new in an area and competitors already have got the clients from the area, he needs to be competitive and hence reduce the brokerage rate that can attract the clients from the area and make the business a profit center.
- The cream client: A client who trades in a market in a huge volume will obviously expect better and discounted rate of brokerage than a retail client. In such a case even if the broker reduces the brokerage rate he can still have better revenue than many other accounts. Such a client can prove much important for the broker as he can offer regular revenue.
- The advanced brokerage: In many cases nowadays the brokers look for an advanced brokerage that can help them to secure their side, and hence they offer low brokerage rate which client readily accept.