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Advantage of Opening a Zero Brokerage Trading Account and Futures Trading

Opening an account with the broker assures you of the chance to make trades. But, did you know that you could lose money even when you do not make any trades? This happens when there is a change in the interest rate. Decrease in the interest rate means that the money you receive will no longer be as much as what you received previously.

Choose the lowest brokerage trader

So, you go to choose your broker to trade on the market. How do you know who is the best one for you? The primary consideration in making the choice will be the brokerage that they charge. One will choose those that offer low brokerage rates. This is because it is not financially gainful for a trader to keep paying more money for making trades. That said, let us turn our attention to Zero brokerage trading.

With zero brokerage trade plans, the trader has no worry regarding the size of what you buy and sell. This brings break-even point lower and increases the chances of your trade making a profit. You don’t have to pay any advance fees, monthly charges or yearly fees. Since there are no fees at all, you become stress free – you need not calculate the brokerage at every point in time.

Freedom to choose

Traders prefer these plans since they can trade on all the major exchanges. Nobody will force them to make trades and they are free to trade when they choose to. The procedure to open an account is simple. You can transfer funds instantly from and to an account. Most of the brokers will have phone and email support for the traders.You can check with the discount broker for plans with zero brokerage. Also, you must be able to carry out unlimited trade on NCDEX, MCX, BSE and NSE.

Doing futures trading

Some traders prefer to do futures trading. They do this because the it can offer high rewards but likewise it also carries high risks. Futures contracts trade against the values of commodities and other related financial instruments. Due to the high leverages that the futures exchanges offer, the traders can gain significant profit from small sums of money. The exchange will set the amount needed to trade in a specific futures contract.

While the trader should check for the Lowest brokerage offered among various brokerage houses, the other point is that the trader must have a sufficient cushion. The money in the account must be above the minimum to such an extent that it can take up losses. The potential for a trade to enter a losing position is high and if the positional loss is big enough, the broker will close the trade. This might wipe out all the money the trader has made and will even wipe out the money in the account of the trader.

If you make sure you keep enough money in the account, you can continue trading for a longer time and possibly recoup the losses. Also, determine at the beginning what minimum amount of money you will use for the trade. This will help keep the losses down and make your trading crisp.

Reena Rawat
Author: Reena Rawat