Money Basics · Stocks & demat

The real cost of a 'free' trade

Your broker says delivery trades are ₹0. True. Their brokerage is zero. But run a ₹50,000 buy-and-sell through the bill and small print appears. None of it goes to the broker; all of it comes from you.

The charge sheet (delivery trades)

1. STT, Securities Transaction Tax: 0.1% on buy AND sell. The big one.

2. Stamp duty, 0.015% on buy

3. Exchange transaction charges, ~0.003%

4. SEBI turnover fee + GST, tiny percentages on the charges

5. DP charge, ~₹13-16 + GST every time you SELL a stock, however small (this is why selling 1 share of a ₹100 stock is a terrible trade, the DP charge alone is 15%)

₹50,000 round trip ≈ ₹130-150 in charges. About 0.3%. Harmless once. Deadly on repeat:

~0.3%cost of one buy+sell round trip

~26%your yearly cost if you churn your portfolio 100 times (~23% compounded)

> Every trade starts at a small loss. Trade weekly and the market has to beat inflation AND your churn just for you to break even. This maths, not intelligence, is why frequent traders underperform patient holders.

Intraday looks cheaper. It isn't safer.

Intraday STT is lower, but brokers charge ~₹20/order and you make many more orders. Costs scale with activity, always.

What this means for you

Every charge here is a percentage except one: the depository charge is flat, so below roughly ₹1,900 a trade it alone exceeds 1% of the trade. Each trade also opens at a small loss equal to its charges, roughly a 0.26% hurdle on a delivery round trip, which the price has to cover before any profit starts.

Takeaway. 'Zero brokerage' still costs ~0.3% per round trip in STT, duties and DP charges. Costs scale with activity. Trade less, in bigger lots.