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ETMarkets Smart Talk| STT, GST, brokerage, UPI charges: Varun Saboo on the hidden cost of frequent trading
Economic Times 1 hr ago·23 Sept 2026, 3:49 am
Frequent trading often feels rewarding, but it comes with a hidden tax that can quietly erode your profits. Varun Saboo, Head of Equities at Anand Rathi, explains that every trade incurs multiple charges, including Securities Transaction Tax (STT), Goods and Services Tax (GST), and payment gateway fees. For active traders, these costs are incurred constantly, whereas long-term investors pay them only once upon selling their holdings. This difference means that high-frequency trading can significantly reduce net returns, sometimes turning a profitable strategy into a loss-making one.
The key takeaway is that transaction costs are not just a minor detail; they are a critical factor in evaluating the true performance of your portfolio. Investors must calculate these expenses to understand their real impact. Looking ahead, it is important to compare the net returns of active trading strategies against the costs involved. For those focused on wealth creation, understanding these charges helps in deciding whether the benefits of frequent trading outweigh the financial toll, ensuring a more realistic assessment of investment success.
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