If you are someone who indulges in intraday trading, you will understand the importance of brokerage charges levied on the trades. When you pay regular brokerage charges on your trades, your take away profits take a hit, thereby, lowering your own gains. Yes, you do have the option of choosing a discount broker that will definitely reduce the overall brokerage you pay but they come with their own limitations.
Kotak Securities, a prominent bank-based full-service stockbroker in India, is trying to break this norm and has come up with a Free Intraday Trading Plan or FIT. This is first of its kind coming from a conventional full-service stockbroker. Thus, the success of this concept depends a lot on its execution at the ground and how this bank-based stockbroker actually executes.
Now, before we explain this plan, let’s take a step back and understand the current dynamics of Intraday trading.
An intraday trader, by the definition of the very concept, looks at his or her profits on a daily trading session day’s basis. The nature of these trades is generally quickly placed with a focus on short-term profits. Most of the times, these profits are monetarily small in nature. However, when brokerage charges are applied at the trade level, the overall profit from the already-small-monetary-gain takes a further hit.
From an actual research done by BCG, an average Indian Intraday trader spends ₹220 on brokerage every trading day. In other words, it is close to around ₹5k per month or ₹60k every year.
This is where a product such as FIT by Kotak Securities comes into the picture.
How Kotak Securities FIT Works?
Kotak Securities FIT or Free Intraday Trading is basically a subscription-based product at a yearly level. A potential or an existing client of Kotak Securities can sign up for this plan by paying a yearly charge of ₹999 per year and subscribe to this plan.
Once subscribed, you will be availed free brokerage based trading across Equity, Futures & Options. A brokerage of 1 paisa per script traded will be levied.
This needs to be known that Kotak Securities FIT (Free Intraday Trading) is available only for orders that are executed by you using a trading platform of the stockbroker, for instance, Kotak Stock Trade or Keat Pro X. That is if you are using facilities such as ODIN Diet or call and trade facility, then FIT cannot be used by you.
Furthermore, as mentioned above, it is available at Equity & Derivatives levels only for now and cannot be availed in Currency or Commodities trading segments. At the same time, if your intraday trade is not squared off in the trading session, then the converted delivery trade will have the delivery brokerage charges levied.
Thus, it is highly adviced that you understand the specific terms and conditions around the plan before you actually pay and sign up for it.
What do You Get in Kotak Securities FIT?
As mentioned above, this is a first of its kind initiative by a full-service stockbroker towards cutting down the costs for its clients, there are multiple incentives you may end up getting once you sign up for it. Those are listed below:
No burden of brokerage getting generated as the subscription fee is a one-time yearly charge and you can place any number of orders with no limit on the quantum of the trade value as well.
Regular research, tips and recommendations for your intraday trades along with Target Price and Stop Loss numbers.
Analysis of long /short built up, for all derivative stocks & customized derivative strategies. It is suggested that you learn to understand these strategies and then place your orders based on what is concluded.
Reasonable quality of customer support and service with multiple channels of communication.
Offline assistance in the form of sub-broker and franchise offices in different parts of the country.
What do You NOT Get in Kotak Securities FIT?
There is always the other side of the coin, its just we need to figure out whether it is dark enough to avoid or not. Let’s see some of the concerns related to Kotak Securities FIT.
The product is not available for currency and commodity trading segments.
NRI investors and traders cannot avail this plan, for now.
Clients of Kotak Securities who have already subscribed to plans such as Super Multiple, Derivative plus & Option plus orders, cannot avail this feature.
The plan is available only for self-generated orders and people using call and trade facility cannot avail intraday trading with the FIT plan.
Kotak Securities FIT, as mentioned above is a first of its kind a concept, however, it seems to bring in a win-win situation for both the client and the stockbroker. For clients specifically inclined towards intraday trading, it is a cost-effective option to place trades for the whole year at a nominal cost. For the stockbroker, it is a great way of client acquisition which is placed at #6 in terms of active clients in India.
Having said that, discount brokers are there for a reason and they offer competitive brokerage charges across all trading segments. Thus, to hit that mark will definitely be not a possibility. This concept is targeted towards a very niche of intraday traders and nothing beyond.
Thus, if you are looking for Intraday trading ONLY and need some assistance in intraday research and tips, Kotak Securities FIT is worth a try. Let us know your thoughts in the comments section below.