Here is an article in The Star worth reading regarding the costs difference between online vs remisier/broker trading.

Online Trading Vs. Remisier

Discuss the Pros and Cons of your preferred method of executing your buy/sell orders. Personally I like to call up my broker for a chat, since I don't trade in hundreds of thousands, the amount saved by the commission is negligible for me. But I experienced once that I wanted to execute an order fast but my broker's phone was busy. So I had to call another number and her colleague passed her the message for me.

remisier is better when u r newbie... coz some of them will teach u d basic rules of tradin.. like swappin, T+4 on monday n u will b charge interest included saturday n sunday.. etc...

but when u expereince d, online tradin will b better since lower brokerage fees..

would like to quote cherroy's post @ Stock Market Discssion Thread

which means, we shall trade at 2.8K and above in order to escape from the RM 40.00 brokerage fees, am i right?

me noobie also
dont have remiser


i use online trading

i wanna get an online trading account liao

wanna do it on my own

it shud b 9k n above...

online trade -> 0.42% x rm9000 = rm37.8 ~ 40

u need to activate onli ma

Aiyo, the RM40 minimum is not the brokerage fee lah, its the stamp duty or tax i believe

Current old system of Rm12. I always make sure the transaction will be 2.8K or above, (sometimes, play small small for fun leh, like buying Airasia 2k shares like that)
2.8K x 0.42 = 11.8, <-- so minimum Rm12

But next year or 2 weeks from now,
You need 9K as Low yat82 said
9K x 0.42 = 37.8 <-- min Rm40

So next year, one needs to trade above 9K to get an effective rate of 0.42%, other below that, your effective commission is higher than 0.42%.


RM40 is the minimum brokerage fee, FYI.

This post has been edited by cherroy: Dec 20 2007, 10:16 AM

Although the new minimum brokerage fee has increased to RM40, I do NOT think it is advisable to think that you HAVE to make a purchase of RM9K - RM10K above to get a fair brokerage of 0.42%.

For example;

YTLPOWR is now trading at RM2.50

At the current moment, if I wanted to buy it with the minimum brokerage fee of RM12

RM2.50 * 2000 shares = RM5000

RM5000 + 0.42% = RM5021

Now come January 2008,

YTLPOWR at same price and same amount of shares

RM2.50 * 2000 = RM5000

RM5000 + (0.42% or RM40 whichever is higher) = RM5040

Cost of purchase changed by + 0.378% or RM19.


Now let's say we follow the "We MUST BUY at least RM9.8K to get a FAIR brokerage fee."

RM2.50 * 4000 shares = RM10000

RM10000 + (0.42% or RM40 whichever is higher) = RM10042

Cost of purchase changed by +100% or RM5021.


In other words, you are shelling out more money or risking more of your capital for a mere savings of less than RM20 for the example above. Is it even wise to think like that? In my opinion, an increase of charges should be accepted as it is, using this method of increasing your purchase just to get a fair brokerage rate would just make the brokers more than happy to accept.

It's the same like saying I'm buying a Honda City VTec because the I get better milleage compared to a Proton Wira. But then you would have paid RM40K extra in advance for what you would normally take more than 5-10 years to achieve in costs savings in terms of fuel consumption.

So in conclusion, I advise everyone to trade like they normally do with an increase in trading costs in mind. Don't risk more to save less.

This post has been edited by skiddtrader: Dec 20 2007, 11:55 AM

Noted with Thanks cherroy.

I fully understand your above statement, just normally I want to purchase a shares of 25K, I can or normally split it to several transaction or buying piece by piece. Just like your above YTLPower case, I can always buy a few lot first before committing fully and finally.

Eg. I have 25K allocated for this shares, I can buy 1-2 lots first, to see whether the stock will drop further or not, if it drops to 2.48 then I can buy 1-2 more lot to and if it still going down to 2.30, I can buy more and make up my initial intended purchase of 10 lot (x1000).
Now with new system, I need to buy at least 4 lots and above as even I buy it at 2.48 with 1 lot afterwards, it is same as buying 2.50 with more lots one. So basically I got only 2 times to do it.
In this way, my exposure and risk is increase espeically in downwards market trend. I cannot opt to buy over a longer period of time, I need to make the purchase at 1 shot and more decisive.

It would have detrimental effect on the small retailers. If one only has 1K of capital, he/she wants to purchase stock then effectively with RM40 min, the total transaction cost is 8%, that's mean the shares he/she bought need to appreciate more than 9% before starting to gain any money. It is not easy for a stock to go up more than 9%. Over long run, may be, short term, a daunting task.

I am not against totally or purely the Rm40 min, but I am upset with the Rm40 together with the 100/lot as well as allow stock split which make a lot of shares trading at few ten cents only.
Just like Tsarena case, he/she sold the Sinopec (through queue, at last minute somebody only buy 100 shares from the queue). The sold price is RM0.22 but only 100 share (1 lot) done, so the effective selling price become Rm0.095 due to the minumum set. Is it that fair?
Sometimes, it is not we don't want to make the transaction amount more, it is the counterparty (buyer/seller side) that don't want to do it, just like Tsarena case)

Just like my above mentioned case, it does affect quite much especially the CWs are issued at a few cent to ten cents only and trade in 100 shares/lot. If the KLSE just like when 1990's where you seldom see shares are trading below Rm1 and with 1000 share/lot then the Rm40 is not an issue there. But there are plenty of penny stocks and trade in 100 shares/lot.
If they said the Rm40 is meant to discourage small retailers participate in penny stocks or trading, then fine, no problem. But KLSE now is keen to promote small retailers to participate (the reason why BursaPursuit contest as well), then said want to implement Rm40. It somehow feel like somebody persuade you to come in their house to play, then give slap on your face.

But I totally agree don't risk more for the sake of lowering commission. Just pointed out the RM40 does have signifcant effect on small transaction. One doesn't necessary to trade more 9K & above, but for my future investment, it does affect my decision as I am not big fish leh.

This post has been edited by cherroy: Dec 20 2007, 12:58 PM

act d most hurt is those cheap stock...

let say muiind. now at 0.35

0.35x 10000x0.42=14.7~15
purchase price(not include clearin fees n etc) = 3515+15 = 3530
effective price = 0.353


next year,
.35x10000x0.42=min rm40
purchase price(not include clearin fees n etc) = 3540+40=3580
effective price = 0.358

cheap stock need increase 1cents jus for d sake of breakeven...

d point to argue is not how much to buy, its that, rm12 VS RM 40... increase of 4 times brokarage fees...

1st, no shortin 2nd, brokerage increase... this clearly r handicapped war..

I think you calculated wrongly.

0.35 * 10000 = 3500

3500 + 0.42% = 3514.70 or average price of 0.3515 rounded up to 0.35 (0.005 is minimum)

New Price at Jan 2008

3500 + (0.42% or 40 whichever is higher) = 3540 or average price of 0.354 rounded up to 0.35 (0.005 is minimum)

Both require at least 1 pip or 0.005 to make a profit.

I agree it will hurt a lot of people trading in minimum lots especially dealing with penny stocks like HK-CW.

Difference of purchase price is RM25.30

This post has been edited by skiddtrader: Dec 21 2007, 02:19 PM

i include d brokerage fees of sellin

Those people who sell/buy 100 shares are a complete nuissance unless the value of the 100 share is more than 3K.

I suggest the concluding party only should pay the min brokerage fees if the share value traded is below min charge. If not, people trading in good faith will be hit by 100 shares jokers everyday


This post has been edited by Kinitos: Dec 24 2007, 07:06 PM

I agree those nuissance 100 share last minute jokers who buy it at the last second of closing time to jack up the prices by 1 pip should be dealt with.

There are plenty of jokers around, really, if you watch carefully even on blue chips counters, to make index slight higher for the closing.

Currently,

online trading brokerage fee is 0.42%.

Remisier trading brokerage fee is 0.6%

Day trading is 0.15%

Is this correct?

Yup. Can be varied but mostly are on this range.