The Hidden Costs of Intraday Trading

Intraday trading is thrilling. The idea of making quick profits within a single day is attractive. However, many new traders are surprised to find that their actual profit is much lower than they expected, or that a small profit has turned into a net loss. Why? Because of a series of mandatory charges that are often overlooked.

Your Gross Profit is simple: (Sell Price - Buy Price) x Quantity. But your Net Profit—the money that actually goes into your bank account—is: Gross Profit - Total Charges.

Understanding these charges is not optional; it's essential for survival and profitability in the stock market.

---

Decoding the Charges: Where Does Your Money Go?

When you execute an intraday trade, several charges are levied by your broker, the stock exchange, and the government. Let's break them down:

1. Brokerage: This is the fee your stockbroker charges for facilitating the trade. For discount brokers in India, it's often a flat fee per executed order (e.g., ₹20) or a small percentage of the trade value, whichever is lower. Our calculator lets you input your broker's fee for an accurate calculation.

2. Securities Transaction Tax (STT): This is a direct tax levied by the government on stock market transactions. For intraday equity trading, STT is 0.025%, but it is charged only on the sell side of the transaction.

3. Exchange Transaction Charges: The stock exchanges (NSE or BSE) charge a small fee for using their platform. This is typically around 0.00345% of your total turnover (buy value + sell value).

4. GST (Goods and Services Tax): A tax of 18% is applied on the sum of your brokerage and the exchange transaction charges.

5. SEBI Turnover Fees: The Securities and Exchange Board of India (SEBI) charges a fee to regulate the markets, which is usually about ₹10 per crore of turnover (or 0.0001%).

6. Stamp Duty: This is a state-level tax. For intraday trading, it's typically 0.003% and is charged only on the buy side of your transaction.

---

A Practical Example

Let's see how these charges affect a real trade.

• Stock: XYZ Ltd.
• Buy Price: ₹100
• Sell Price: ₹102
• Quantity: 500 shares
• Brokerage: Flat ₹20 per order

Gross Profit Calculation:

• Gross Profit = (₹102 - ₹100) x 500 = ₹1,000

Now, let's use the Intraday Profit Calculator to find the net profit.

• Buy Value: ₹100 x 500 = ₹50,000
• Sell Value: ₹102 x 500 = ₹51,000
• Turnover: ₹1,01,000

Charges Breakdown:

• Brokerage: ₹20 (buy) + ₹20 (sell) = ₹40
• STT (on sell): 0.025% of ₹51,000 = ₹12.75
• Transaction Charges: 0.00345% of ₹1,01,000 = ₹3.48
• GST: 18% of (₹40 + ₹3.48) = ₹7.82
• SEBI Fees: 0.0001% of ₹1,01,000 = ₹0.10
• Stamp Duty (on buy): 0.003% of ₹50,000 = ₹1.50

Total Charges: ₹40 + ₹12.75 + ₹3.48 + ₹7.82 + ₹0.10 + ₹1.50 = ₹65.65

Net Profit Calculation:

• Net Profit = Gross Profit - Total Charges
• Net Profit = ₹1,000 - ₹65.65 = ₹934.35

As you can see, over 6.5% of your gross profit was eaten away by charges. For smaller profits, these charges can even result in a net loss.

---

Why Use Our Intraday Profit Calculator?

• Accuracy: It accounts for all the relevant charges to give you a precise net profit/loss figure.
• Speed: Get instant calculations without manual math, allowing you to make quick decisions.
• Strategy Planning: Use it to determine the exact price at which you need to sell to make a desired profit after charges (your "break-even" point).

Successful trading is not just about predicting market direction; it's also about managing costs. Always factor in these charges before placing a trade.

👉 Try the Intraday Profit Calculator now to trade smarter.