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.

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

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 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.

Currently,

online trading brokerage fee is 0.42%.

Remisier trading brokerage fee is 0.6%

Day trading is 0.15%

Is this correct?