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| Jenita |
 Posted: Thu Mar 22, 2007 9:08 pm Post subject: |
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New Poster
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Here are some questions you should consider when choosing your online trading broker:
1. What are the real commission rates?
2. Are there any extra fees?
3. Can you trade multiple markets, and are the commissions the same?
4. Does it cost extra to make a trade by phone?
5. Will they pay you interest on the balance of uninvested cash in your account?
6. Do you need to start with a large deposit?
7. How reliable is service? |
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| efflandt |
| Posted: Sun Apr 01, 2007 4:28 pm Post subject: |
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Investing Manager
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Sometimes prices can be deceptive if you do not take everything into account. Suppose you keep an average of $10,000 cash instantly ready for trades more or less split between 2 accounts.
I looked at one broker with very cheap trades (less than half a penny per share) that came out of the $10/mo minimum charge. If I had my IRA and Roth IRA there, 2 accounts x $10 x 12 = $240.00 per year. They pay no interest for first $10,000 of cash, so net cost is $240.00/yr.
My broker charges $10.95 per trade x 54 trades past yr = $591.30 (no other fees). But they also pay ~5% for cash in core account. So interest on $10,000 is roughly $500. Net cost less than $100.00/yr.
In this scenario the first broker would not be an advantage unless making more than 67 trades/yr. Hopefully as my learning curve flattens out I will be making fewer more profitable trades. |
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