Minimizing Costs. Commissions, fees and costs in the stock market
We've looked at a huge number of stock topics, it's time to know how much to "weigh in grams. Specifically, what costs await someone who plans to start working on the stock market. Naturally brokers have different conditions, I will try to give you a fairly universal answer, but with an emphasis on the conditions in my company.
1. Tuition
Your first possible expense, in my opinion, should be to spend on training. There are a huge number of free lectures on the Internet, but some of them are not up-to-date, do not contain information about changes in legislation, miss important innovations. Therefore, elementary courses should be taken.
They will give you a direction in which to move, teach you how to use terminalThey will tell you about your opportunities. If you have long ago (more than three years ago) attended courses for beginners, but have not started trading in that time - you have lost money, because you will have to study all over again. The market is not standing still!
Ways to reduce the commission:
- Find out about free classes from your broker,
- Ask for a discount,
- Learn about bonuses after the course for existing account holders,
- Take homework assignments from the coach,
- Schedule personal sessions after you have studied the materials yourself.
2. Fee for account maintenance
If you have money and securities in your account, even if you don't have any trades, you may incur a charge in the form of account maintenance fees.
Are you on vacation and you are being charged unfairly? While you are on vacation, a whole army of broker employees are working for you: someone is making your terminal better, someone is improving your personal cabinet, someone is developing new services and strategies for you. So this spending is natural.
Ways to reduce the commission:
- Make trades - often trading commissions reduce account maintenance fees,
- Ask the manager about the availability of tariffs without this fee,
- If you have rubles in your account, then buy OFZ (effectively fighting costs, if the term of the position is planned for at least 2 weeks).
3. Depository costs
Your securities - stocks and bonds - are kept in a depository. Not for free!
Ways to reduce fees:
- Always stay at the original number of papers overnight.
You have 100 lots Gazprom sharesYou make 1000 operations with them on the exchange during the day, but at the end of the trading session you buy back exactly 100 lots,
- Don't use the depository - always stay in the "cache" with cash overnight.
4. Transaction fees
The fee for transactions can be fixed, or it can be in the form of % of turnover. A combination of these two types of fees can be applied: fixed fee + fee from turnover. It is important that the fee "% from turnover" is charged only from performed transactions. Some brokers have a hidden commission, which is charged as a fee for any order placed. Regardless of whether a trade on that order went through or not.
Ways to reduce the commission:
- Find a broker with live managers who are willing to see you in the office or answer your questions over the phone,
- Clearly articulate to your manager your plans for trading - this will help him choose the rate card. For example: "I want to trade on my own, I don't need advice or training. But the average amount of the deal I will make will be 50 thousand rubles".
The managers of our company will offer you the "Advisory" rate. It includes an analytical newsletter as a nice bonus, even though you've decided to trade on your own. The manager understands you and hears you in this plan, but this rate does not have a minimum fee per transaction. And with your task, that's important! - On a monthly or, better yet, weekly basis, monitor your spending at your rate. It may not be as big as you think, and the fee goes to, for example, your use of borrowed funds. We'll talk about them in the next paragraph.
5. Fee for the use of borrowed funds
The broker is ready to give you credit, both for upside and downside games. Naturally, there is a certain fee for this service.
This fee is charged daily, despite weekends and holidays. The T+ mode can significantly increase this fee. This is a special mode of settlement on the exchange, when after the transaction is settled only on the second working day. So, if you borrowed money during the week and closed the transaction with borrowed funds on Friday, the money will not be received by your broker until Tuesday, which means that you will pay for the use of borrowed funds for two weekends and Monday. This does not mean that you have to say goodbye to your debts on Wednesdays. It does mean that when you enter into a trade, you should consider whether the profit on it is enough to recoup the expense.
Speaking of such a cost as a borrowing fee, I would like to ask you, do you know how a fee is charged when you play the long game? It's simple with "longing": I bought shares with my own money and borrowed a certain amount from a broker, for example 50,000 rubles. A fee will be charged daily for the borrowed funds. It's worth bearing in mind that the calculation takes place daily, and tomorrow interest will be charged on the principal portion of the debt and on the outstanding interest.
But what about the "short"? I'm borrowing stock from a broker, right? How much will this loan be charged? Reply to my email. afanaseva@corp.finam.ru. To the first three who answered correctly I will give you a month of free consultations! Even if you are not a client of my company (* the usual cost of the service for clients is 5000 rubles, for non-customers from 25000 rubles). And who does not know the answer, will receive it on the course "Beginner", which starts with me on June 26 at 19.00 MSK (in person, in absentia, video archive).
Ways to reduce costs:
- Trade within the day (if there is no rollover of debts overnight - there is no fee for the use of borrowed funds). Too extreme method, not everyone is suitable for such strategy.
- Remember T+2 mode, especially before a long weekend.
- Do not forget to assess the profitability of the operation, take into account the fee for borrowed funds.
6. The cost of the thrashing
[info_block align="right" linkText="dealers of Russia" linkUrl="https://mr-trader.com/learn/brokers-forex-trading/foreks-dilery-rossii" imageUrl="https://files.fortrader.org/cachethumb/images/229812.0944afd2850e06296b92f7f75dc7f59c.jpg"]From the legal point of view, the regulator has provided reliable protection of investors' funds from unfair actions of dealers.[/info_block].
Here, in general, are the main costs of the trader when trading on the Russian exchange, through Russian brokers. I did not consider such trash as a fee for the use of trading programs, as a minimum the broker must have three free programs to trade through the Internet. Only professional programs for algorithmic trading or complicated statistical researches can be paid. One more trashy service - charges for technical support. That is when a broker pays even for help in installing the terminal. Fortunately it is rare.
I did not include paid subscriptions to information resources and consulting support, work with a personal consultant - this is not a mandatory cost. And it's up to everyone to use them or not. We focused on the most constant and common costs. It's just worth repeating that with regard to minimizing costs - it's important to work clearly with your manager! Are your managers as good as mine?