I see many advertise for 0.05% and 0.1% for day trades. But what about the miscellaneous cost like stamp duty and clearing fees? Normally, how many % do we need to estimate for that?

e.g. if buy 0.1% commission plus 0.3% for stamp duty and clearing, then total for buying is 0.4%. That means buy and sell is 0.8% for TOTAL cost. Am I right? So, is this 0.3% estimate good enough?

commission varies. mine is 0.42% or min RM28
clearing is fixed at 0.03%
stamp duty is RM1.00 per RM1,000 or fraction of it... so can round up to 0.1%

for a trade (buy+sell) i usually round up to 1.5% for a guaranteed profit.

Generally 4 bids for overnight and 2 bid for day trade will breakeven. But today 1 bid is 1sen for all share priced above RM1. You just have to remember the old bid system.

Your avatar is quite scary!

For Intra-Day transaction i.e. buy & sell on the same day, you may need to pay only a very small % commission, for example 0.1% or RM8 whichever is higher when you use MayBank2u to trade.

Due to the minimum commission charge of RM8, you have to buy a stock with total gross purchase cost of RM8,000. If the market price for the stock is RM2, then you need to buy at least 4 lots (4,000 shares) in order to benefit to the fullest of the 0.1% commission charge.
Total gross purchase cost: RM2 x 4,000 shares = RM8,000
Commission of 0.1%: RM8,000 x 0.1% = RM8
Clearing fees of 0.03%: RM8,000 x 0.03% = RM2.40
Stamp Duty of RM1 for every gross purchase cost of RM1,000 or fraction = RM8
So, the total charges: RM8 + RM2.40 + RM8 = RM18.40 i.e. 0.23% for one way transaction.

For you to breakeven, you can just sell at RM2.01,

Total gross purchase cost: RM2.01 x 4,000 shares = RM8,040
Commission of 0.1%: RM8,040 x 0.1% = RM8.04
Clearing fees of 0.03%: RM8,040 x 0.03% = RM2.42
Stamp Duty of RM1 for every gross purchase cost of RM1,000 or fraction = RM9


The total charges for buy & sell on the same day (intra-day) = RM18.40 + RM19.46 = RM37.86.

Therefore, total profit = Net Sale Amount less Net Purchase Amount = RM8,020.54 - RM8,018.40 = RM2.14.

So, you can see it is just around 0.5% of the buying price for the two way transactions (buy & sell) which is much much lower cost if you able to play the INTRA-DAY contra & provided that your total gross purchase cost is RM8,000 or higher to benefit maximum from the 0.1% commission charge.

If your total gross purchase cost is less than RM8,000, then the stock price have to increase more than 0.5% of the buying price in order to breakeven.

To be always accurate, it is advisable to do your calculation for every stock that you trade.

This post has been edited by eYuppie: May 3 2010, 01:15 AM

So in other words you would rather risk RM8k of investments for less than RM8 of savings? hehe I find that very "frugal".

Isnt the minimum buy in now at 100 unit = 1 lot

Yes

Hi eyuppie,

Thank you very much on time taken to do such an elaborate illustration. Very much appreciated.

So, the cheapest roundturn commission is 0.46% for DAYTRADES. what about for those longer than daytrades i.e. overnight trades?

Thanks