# What's an ideal maximum brokerage % on your trades?



## bond21 (16 March 2015)

I use CommSec where they charge $20 per trade under $10,000.

I'm in my twenties and am not swimming in the dough like a lot of guys investing in chunks of tens of thousands of dollars, so I'm generally investing around $1500 - $2500 per trade...so the brokerage is around 1%.

Just wondering what you guys think a good maximum brokerage percentage is for your trades. Obviously I know the more I invest the lower my percentage is, but is 1% considered a fair brokerage? Just looking for a bit of a guideline.

Thanks.


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## banco (16 March 2015)

bond21 said:


> I use CommSec where they charge $20 per trade under $10,000.
> 
> I'm in my twenties and am not swimming in the dough like a lot of guys investing in chunks of tens of thousands of dollars, so I'm generally investing around $1500 - $2500 per trade...so the brokerage is around 1%.
> 
> ...




That kind of commission ($20 on a $1500-$2500 trade) puts you well behind the 8 ball.  I think interactive brokers offers a $6 minimum commission for ASX.  Otherwise if you are holding the trades for a relatively short time the more reputable CFD brokers might be worth a look.


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## VSntchr (16 March 2015)

It all depends on your personal strategy.
If you are making long-term investments as part of an investment plan then brokerage should be largely irrelevant (within reason).

However, if you are* trading* then the answer is far different. When trading I prefer to express my brokerage as a % of Profits. This gives you a good idea of how much brokerage you are paying and will allow you to form your own judgement of whether the brokerage is prohibitive or not.

As an example, I run one strategy which I consider very commission heavy. Despite having what I perceive as a favourable commission structure - this strategy still runs at about 25-40% brokerage to PnL.


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## Habakkuk (16 March 2015)

NAB trade is slightly cheaper at $14.95 up to $5000

https://www.nabtrade.com.au/pricing


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## bond21 (16 March 2015)

VSntchr said:


> It all depends on your personal strategy.
> If you are making long-term investments as part of an investment plan then brokerage should be largely irrelevant (within reason).
> 
> However, if you are* trading* then the answer is far different. When trading I prefer to express my brokerage as a % of Profits. This gives you a good idea of how much brokerage you are paying and will allow you to form your own judgement of whether the brokerage is prohibitive or not.
> ...




Yea good point. I'm not a trader and my objective is to buy and hold for long periods of time. I think I might start trading in larger amounts, but the 1-2% brokerage doesn't seem that big of a concern.


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## VSntchr (16 March 2015)

bond21 said:


> Yea good point. I'm not a trader and my objective is to buy and hold for long periods of time. I think I might start trading in larger amounts, but the 1-2% brokerage doesn't seem that big of a concern.




There are alternatives to CommSec which will be cheaper for you if you desire to change. OpenMarkets ($14 min) is used by myself along with a few others here on the forum and as Banco suggested there are also others which are cheaper also.


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## qldfrog (16 March 2015)

I get $10 a trade with Bell Direct and am happy with the service but still end up with 20k or so brokerage a year which is basically as much as my profit on a good year
still too much for frequent trading, good for medium/long term investment


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