Stock Market Trading: In these ways, you can increase earnings from the stock market, know how real profits decrease

When you invest money in the stock market, then you have to pay taxes and charges like brokerage, STT (Security Transaction Fee), Exchange Transaction Charge, GST, SEBI Charge, Stamp Duty and after deducting these, you get net profit or loss. (Image- Pixabay)

Stock Market Trading: If you trade in the stock market and actively buy and sell shares, then the charges related to this should be calculated in advance. This calculation is important because it helps in increasing profits. When you invest money in equities, be it intra-day or delivery or futures or options, the return on investing in all these methods is different. When you invest money in the stock market, then you have to pay taxes and charges like brokerage, STT (Security Transaction Fee), Exchange Transaction Charge, GST, SEBI Charge, Stamp Duty and after deducting these, you get net profit or loss.

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Trading is done in these four ways

• Intra-Day Equity: When you buy and sell a share i.e. long or short position for only one day i.e. buy and sell today itself, then it is considered under intra-day. Equity holding is not available in this.
• Delivery Equity: Unlike intra-day, the shares you buy in delivery trading are kept in a demat account and hold for a period of time. In intra-day, it is necessary to square off the position, be it loss or gain, whereas in delivery equity trading, you can sell the shares at any trading time as per your choice.
• Future: It is a futures between buyer and seller under which the stock is traded on a particular day at a fixed price. After the deal is done, it is mandatory for both the parties to complete the deal and neither side can back down.
• Options: Under options, there is a deal to trade at a certain price on a particular day in which some premium has to be paid. Under options, two options are available, call and put. Under call options, the buyer gets the right to buy and under put options, the buyer gets the right to sell.

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Such is the effect on profits

Information was given about the above four ways by which you earn money through the stock market. Now let’s see below how much profit you are getting in all the ways-

• Let’s assume that you buy 400 shares of a company worth Rs 1 thousand and sell it for Rs 1100 in intra-day itself, then the total turnover is Rs 8.40 lakh. On this, including brokerage, STT, exchange transaction fee, GST, SEBI duty and stamp duty, about Rs 202.24 will have to be paid as tax and charges. In this trading you will make a profit of Rs 39795.76.
• If you buy and take delivery of 400 shares of Rs 1 thousand, that is, sell them on any other day at a price of Rs 1100, then the total turnover is Rs 8.40 lakh but Rs 935.04 will have to be paid in the form of taxes and charges. It made a profit of Rs 39064.96, which is less than intra-day trading. However, there is a lot of risk in intra-day as there is profit or loss, the position has to be squared off.

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• In the case of futures, if you have bought and sold 400 shares for Rs 1000 for Rs 1100, then in this transaction with a turnover of Rs 8.4 lakh, you will have to pay tax and charges of Rs 119.86. There will be a profit of Rs 39880.14 in this.
• If a deal is done for 400 shares of Rs 1 thousand under the option, which is sold at a price of Rs 1100, then in this transaction of turnover of Rs 8.4 lakh, Rs 805.38 will have to be paid as tax and charges. There will be a profit of Rs 39194.62 in this.
  (This calculation is done with the calculator of brokerage firm Zerodha and it is calculated for trading on NSE- National Stock Exchange. Charges like brokerage differ for all firms.)

Higher profits on BSE in F&O trading than on NSE

According to the Zerodha calculator, if you trade futures and options on BSE instead of NSE, then profits can increase. There is no exchange transaction fee for F&O on BSE and this also reduces GST. Keep in mind that in intra-day equity and delivery equity, the exchange transaction fee on BSE is same as that of NSE.