Whenever it comes to investing in the stock market, brokerage charges of the trading platform are a must. Dhan broking platform is one of the favorites of Indian investors. But how much brokerage does Dhan charge? This question is very important for both new and experienced traders to implement their strategy. In this article, we will understand the brokerage structure of Dhan, which will help you understand the cost associated with trading.
Dhan’s brokerage model
Flat fee structure
This flat fee structure is an excellent feature of Dhan. Most traditional brokers charge brokerage as a percentage of turnover. Dhan’s fee structure keeps it simple and cost-effective for traders. The flat fee model proved beneficial for traders doing high-volume trading.
Services with rs20/- or 0.03% of turnover, whichever is lower
1. Intraday equity trading 2. All segment futures
Services with flat rs20/-
All segment options
At one time, Dhan had introduced 50% discount on brokerage for female traders. However, because of misuse and SEBI regulation, it had to be closed.
Additional charges to consider
Along with having knowledge of Dhan’s brokerage, it is also important to be aware of the charges associated with trading. These additional costs can significantly affect your trading costs.
Security Transaction Tax (STT): This tax is levied by the government on all transactions.
Exchange transaction charges: Stock exchanges charge this to facilitate trade.
SEBI turnover charges: SEBI charges this for regulatory purposes.
Stamp duty: The government imposes a state-specific charge on security transactions.
GST: Goods and Service tax applied to brokerage and other charges.
All brokers, not just Dhan, levy these charges. But these significantly affect your total trading cost, hence you will have to keep all this in mind during your trading decisions.
Comparing Dhan’s charges with other brokers
We divide brokers into two categories: discount brokers and full-service brokers. They differ in the way they charge for different services.
Full-service brokers
Many full-service brokers charge as a percentage of total turnover. It is quite expensive for large position trades compared to flat brokerage.
Discount brokers
Other discount brokers also charge flat brokerage like Dhan, with little difference in price. Pros and cons of Dhan’s brokerage structure Pros: 1. Simplicity: The flat fee structure is easy to understand and calculate. 2. Cost-Effective for large trades: Particularly those that deal in large volumes. 3. Predictability: One knows the exact cost before planning the trade. Cons: 1. Can be expensive for extremely small-size trades: Percentage-based trades may be cheaper for them. 2. No discount for high-frequency trade: Dhan’s flat fee applies to everyone, while some brokers charge reduced fees from active traders.
How to minimize your trading costs on Dhan?
Dhan’s brokerage charges are competitive, but we can make trading costs even more cost-effective.
1. Consolidate your trade: Instead of taking too many small trades, consolidate into fewer larger trades. 2. Use limit order: when you place a market order, the trade gets executed at a higher price. A limit order ensures that you execute the trade at the right price. 3: Avoid unnecessary trades: Strictly follow your trading strategy and trade accordingly. 4. Consider delivery trades: Instead of taking multiple intraday trades, delivery trades are more cost-effective.
Dhan’s brokerage knowledge is very important for making an informed investment decision. Dhan offers a competitive and transparent model along with its flat brokerage. You cannot choose your broker only because of brokerage, other charges, your trading style and trade volume also hold a lot of importance. While choosing a broker, pay attention to not only the brokerage but also the user interface, research tools, customer support, and reliability.
When Dhan is not charging for account opening and annual maintenance, it is better to open an account with Dhan, to test how much its brokerage and other facilities suit you.
