Moving Away From Zero-Commission Broker

[Nowler]

Hey folks!
Nothing important, but thought it was worth saying.

Recently opened an additional brokerage account in order to cover the shortfall in companies offered by my zero-commission broker.

First impressions are the fee's!
The new account has relatively low fees, so certainly not complaining.
What I was shocked by was the fee cost as a percentage of the position I was about to buy... 20%+!

With my zero-fee broker, I could just buy a little of this and a little of that each month when I got paid - topping up my current positions.
I can tell you that I will absolutely NOT be able to do that with this broker! lol
Instead, I will have to buy bigger tranches to get more bang for my buck.

This will be interesting as I certain have a level of FOMO and have been topping up on positions when I have the money, rather than waiting on the correction I expect to happen. So opening this new account could be a very valuable lesson in restraint.

Interesting times...

 

[Henow1969]

Can you name of this broker with zero commission?

 

[Nowler]

Trading 212

 

[nikkiscy]

lol, I shut down my accounts on all 0% commission. they all advertise like that but they cranch you on the spread

 

[Nowler]

Well they certainly aint charging 0% commission for the good of their health

 

[MasterOfCoin]

...." 0% commission. they all advertise like that but they cranch you on the spread"

Well, of course they recoup on the spread, they're not doing charity.

The point being missed in that attitude, is that for smaller trades, that's a damn sight cheaper than what a fixed commission charge would cost. Thus facilitating a lot of potentially profitable trades that would otherwise not be viable.

For those with ambition, but modest resources, this allows an entry to not only profitable trading, but also to spreading the risk across multiple trades that would be loss-making with more conventional commission based brokers.

I'd say that was a win-win for everybody involved.

Of course, those who'd rather pay hefty commissions to make fat cat brokers richer at their own expense, by all means carry on, giving money to the already rich is always the easiest thing to do.

 

[Nowler]

... The point being missed in that attitude, is that for smaller trades, that's a damn sight cheaper than what a fixed commission charge would cost. Thus facilitating a lot of potentially profitable trades that would otherwise not be viable.

For those with ambition, but modest resources, this allows an entry to not only profitable trading, but also to spreading the risk across multiple trades that would be loss-making with more conventional commission based brokers...

Well said.

 

[nikkiscy]

...." 0% commission. they all advertise like that but they cranch you on the spread"

Well, of course they recoup on the spread, they're not doing charity.

The point being missed in that attitude, is that for smaller trades, that's a damn sight cheaper than what a fixed commission charge would cost. Thus facilitating a lot of potentially profitable trades that would otherwise not be viable.

For those with ambition, but modest resources, this allows an entry to not only profitable trading, but also to spreading the risk across multiple trades that would be loss-making with more conventional commission based brokers.

I'd say that was a win-win for everybody involved.

Of course, those who'd rather pay hefty commissions to make fat cat brokers richer at their own expense, by all means carry on, giving money to the already rich is always the easiest thing to do.

well, crypto trading platforms, they charge just 0.10% or 0.25% per transaction fixed. I won't name the specific platforms because im not sure if is allowed but one of them has also forex pairs.

 

[MasterOfCoin]

well, crypto trading platforms, they charge just 0.10% or 0.25% per transaction fixed. I won't name the specific platforms because im not sure if is allowed but one of them has also forex pairs.

Yes, true indeed.

And it's good to explore alternative trading platforms.

Although, that aside, this topic is specifically about the OP opening an additional brokerage account to trade in a wide range companies stocks.

Not that OP might also consider trading in crypto or forex pairs as well, but that's not the topic here.

🙂

 

[Farm Yard Forex]

lol, I shut down my accounts on all 0% commission. they all advertise like that but they cranch you on the spread

Probably dodged a bullet there anyway as it seems they are getting in trouble with the FCA as well!

 

[HeavLeighGill]

A lot of the 0 commission brokers have super high spreads, but sometimes you might find one or two that actually have competitive pricing. Kinda like finding a unicorn.

 

[Jungletrader]

It's the hidden costs eh .
Some will catch you on the spreads alright serves as a warning to others.

 

[IceThor]

Brokers have to make money somehow lol

 

[pezza55]

You do have to weigh up costs when it comes to finding the right broker. Between commission, spreads and swap fees you need to calculate which is the best option for you and the way you trade. It's a bit of a minefield.

 

[NVP]

heads you lose tails they win.......the main killer in trading is transaction cost.....if you can crack a half decent system (a few do) you then face a wall of costs ...that will kill you over time

welcome to trading
N

 

[TraderAlex11]

You do have to weigh up costs when it comes to finding the right broker. Between commission, spreads and swap fees you need to calculate which is the best option for you and the way you trade. It's a bit of a minefield.

I had a similar issue but found a broker who provides both an 'all in' spread option + low spread and reasonable commission. I think we need to consider the accuracy between the conditions advertised vs. the conditions you can execute on..

these 0% commission brokers work the spread / run a b book on the flow they receive so either way they maximise their profits. An STP / A book model brokerage will just pass the order on to the market, take a commission and have no interest whether you are profitable or not!

 

[IceThor]

commission is not everything