Sunday, January 4, 2009

Minimum Trading Size vs Lowest Brokerage Fee

In last post, it was shared that in order to enjoy the lowest brokerage fee, you will need to identify the minimum trading size !

The Lower percentage of a brokerage fee, the Higher the minimum trading size becomes !  As a result, it seems like one should always pick an account type that matches his average trading size.

Wrong again ... I cann't stress enough that we need to analyse the real numbers to know the whole truth.  Not just the concept.

Compare different brokerage fee offers in an old post
As you can see the blue line in above graph.  Although your brokerage fee is as high as 0.8% when you only invest $1,000 but it is STILL ALWAYS lower than other type of accounts, ie. 1.2%

At the end, the lowest brokerage rate with the lowest minimum brokerage fee DOES equal to Maximum saving in this case !