How it unfolds, step by step
The setup
On this example a position is opened and closed twenty times. Each round trip carries a fixed cost. Nothing about the market matters here. The chart is a running total of money that has left the account. That is money gone before any outcome is counted.
What happens next
By trade 10 the cumulative cost has passed the level marked on the chart. That level is the gross profit the whole sequence would have to produce. It is what the sequence needs simply to return to where it started.
What it means — and does not
Twenty round trips have spent a fixed, knowable amount. That happens before a single decision is judged. This is why cost is not a detail to be tidied up later. It is the first number in the arithmetic. It compounds with frequency. And it is the only figure in the whole exercise that is certain in advance.
- Cumulative charges paid (₹)
- Gross profit needed to stand still · 600
A fixed cost per round trip, totalled. The dashed line is the gross profit the sequence must produce before any of it is a gain.
Show the underlying data
| Round trips taken | Cumulative charges paid (₹) |
|---|---|
| 1 | 60 |
| 2 | 120 |
| 3 | 180 |
| 4 | 240 |
| 5 | 300 |
| 6 | 360 |
| 7 | 420 |
| 8 | 480 |
| 9 | 540 |
| 10 | 600 |
| 12 | 720 |
| 14 | 840 |
| 16 | 960 |
| 18 | 1,080 |
| 20 | 1,200 |
What this does not establish
The reading is that cost is a constant per trade. It stops being constant in two directions. It falls as a fraction when the position is larger. Several lines are percentages, while brokerage is often capped in absolute terms. It rises, sometimes sharply, when the trade is small or the instrument is . The price actually filled at differs from the price on screen. That difference is a cost the charge sheet never shows. The level to check is the cost as a PERCENTAGE of the position, not the rupee figure.
Things to check
4How many separate charge lines apply to this segment, and which are statutory rather than the broker's?
What is the round-trip cost as a percentage of the position, not in rupees?
How many round trips are planned, and what does that make the total?
Count every charge before comparing the gross and net result.
Common mistakes
2Comparing brokers on brokerage alone. The statutory lines are identical across all of them, and often larger.
Ignoring the difference between the price on screen and the price filled at. It is a real cost that appears on no statement as a charge.
Two brokers quote the same brokerage. How much can the total cost of one round trip differ between them?
- Substantially, since brokerage is most of the cost
- Barely, because most of the stack is statutory and identical everywhere
- It cannot differ at all
Show the answer
B. Barely, because most of the stack is statutory and identical everywhere
Securities transaction tax, exchange transaction charges, the SEBI turnover fee and stamp duty are set by statute or by the exchange, not by whoever routes the order. Brokerage is the smaller and the only genuinely variable line — though the price a trade is actually filled at can differ, and that is a cost no charge sheet lists.
Frequently asked
3Which charges are set by the broker and which are not?
Brokerage is the broker's. Securities transaction tax, exchange transaction charges, the SEBI turnover fee and stamp duty are set by statute or by the exchange. They are the same wherever the trade is placed. GST is levied on some of those lines rather than on the trade value.
Why does the cost matter more on a small move?
Because it is fixed in the arithmetic and the move is not. The same cost is a rounding error against a large move and the whole of a small one.
Where can I work out my own figure?
The trade cost calculator on this site lists every line from your own inputs. It states the source for each rate. The contract note decoder does the same in reverse, from a statement you already have.