Every trader is different. There is a wide range of fees that brokers tend to charge when you open up an initial account. Some will charge as little as $500. Others will charge up to $2500-3000. There is one universal rule that applies with any account being opened. You should read the fine print before signing up. Many traders fail to do this. They open up an account and realize they do not have enough. This is a waste of time to both you and your broker.
The Commissions and Fees
1) The ones who charge between $5-15 per trade are what you call the dirt-cheap brokers. On the plus side, they do get the job done right. The one downside is they will not offer great perks or support. They will only offer the bare minimum.
2) Those who charge $15-20 are the mid-priced brokers. These are the guys who offer more perks. They will offer more support and better customer service. They will offer special incentives for doing business with them.
3) The last tier of online brokers are your most expensive ones. Thye will charge between $100-200 per trade. This is on the lower end of the scale. Many will charge more. These are the brokers who offer a full-scale service to their customers.
The Hidden Fees
Yes. There are going to be hidden fees. You cannot get out of this one. Some are just better at hiding these fees than others are. The hidden fees you will have all depend on the broker you do business with. Pay attention.
1) There are fees for transferring your assets both into and out of your accounts. These fees will add up and count against your earnings.
2) You will have maintenance costs. This is the cost for doing business with your broker. Speak with your broker to find out what they will charge for this.
3) You will get charged for not doing anything. This is what they call the “inactivity fee”. It is an absurd fee that you will get charged. This a fee that will also count against your earning. The fees for this vary depending on who you work with.
2) You will get charged for not keeping a minimum balance in your account too. You will get charged from both ends.
3) Ever hear of margin loans? You will get charged interest on these too.
4) You will get charged on some securities and loans you invest in.
General Information and Tips on Online Trading and Brokers
This is a rough estimate of what you can expect. Some brokers will charge low and some will charge high. It all depends on who you go with. You can try to negotiate with your broker before signing your agreement. Make sure you do any negotiating before you sign. Once you sign on the dotted line, you are committing yourself to the process.
Do your own research before investing your time and money in the process. About 80% of online brokers are trustworthy, but there is always an exception to the rule. Find out as much as you can before you hire someone.
You do not want to get involved with someone who is going to move your money around without telling you. You do not want someone on your side who does not care about you. Hire someone who has your best interests at heart. There are many brokers who only care about making money. They will only see you as another number to their portfolio. You do not want this.
Get referrals and look over them. Some brokers will get branded bases on their reputation. This can be both good and bad. Find out what others have to say about the person you are looking at. Read the online reviews. Find out if they cost is worth the price.
Some brokers charge a high cost and do not offer anything to back it up. These are the brokers you need to be weary of. Brokers who are not listed with the BBB and other reputable business sites are not to be trusted.