Ok, the topic title seems vague since I couldn’t think of a better one, but
I just wanted to share my perspective on ACTUAL scrip rates and the ACTUAL
profits, when doing trading of any kind.
Its easy to overlook this when
you look only at quoted prices… but fact is everytime a retail investor trades
(cash market), at least 1.4% eventually gets added to the quoted
This 1.4% is profit from your trade that is split between the
Broker and the Govt.
The figure is assuming a normally quoted brokerage
(delivery) of 0.5% , STT of 0.125%, Service Tax 12.24%, 0.01% stamp duty and
0.07% transaction charge.
Since its a Percentage, so it makes a lot of
difference for high price stocks e.g. if you bought RELIANCE today at (approx)
1172, you would need to sell it at 1189.60 just to break even. And
today’s HIGH for the scrip was 1189.80, so you would really have to sell at the
peak to even break even.
And if you wanted to cut a profit of say
1.4%, you will have to wait till it hits 1207.20…that’s a hell of a way
off what even market experts would even suggest for this scrip in the short
This understanding of the underlying maths of trading will
hopefully help new traders who hit the SELL button whenever they they see any
small upward movement.