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Costs

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Super Contributor
I have just realized how costs kill you as a trader. The only answer is to find shares that look good on a slightly longer term basis. Getting in and out quickly is a mug's game. Thank you Wellington VO for that insight.(Yes, I know, not the best, but things haven't been going so well lately).
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Frequent Contributor
This is why I like to trade CFDs. Cost is relatively low at just below 60 bucks a pop.
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Super Contributor
Russ,it is good that you are aware of these costs. A few months ago , i did an analysis of my equity trades in term of profit and loss and brokerage cost. Result was shocking. I had a profit of R44 000 (+/-) but my equity cost was 50% of my profit. My hard work buying ungeared shares was basically making the brokers rich. Since then, i have changed strategy.
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Super Contributor
I have also being struggling to make a decent profit using cfd's. In all fairness, macro economic factors, is making it extremely difficult to make money. My position sizing is like 1/20th of what it use to be.
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Frequent Contributor
have you considered international brokers?
The brokerage structures is very different.
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Super Contributor
Nope! You pay a "commission" which is presented as a spread - both ways. My brokerage is about the same as my "spread." You save on the various taxes which would be half a pip. The interest quickly absorbs this at 9,5%. You cannot get out when you want as the bank takes forever to process a transaction - especially when the market is chaotic and you NEED to get out. Sometimes you cancel a transaction and reprocess only to find that it DID indeed get processed and you are now double processed... half an hour later! CFD's are NOT cheap to trade - it's an illusion! They offer leverage - and that is all they offer. They lack "accuracy" - due to SBK's lethargic processing platform you cannot determine a price with adequate precision at a given point in time - also known as slippage! Interest is charged daily - the effective annual interest rate is very high!
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Super Contributor
Yes, your completed trade shows the price you bought (or sold) and the underlying price. That difference is the cost to you and is quite substantial.
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Super Contributor
Yes, Preston, if you add up the cost of your trades on the trade page it is quite shocking. The only people who are definitely making money are SBK.
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Frequent Contributor
Thanx Russ. Never looked at it in this way. I just wonder why Std bank never show these costs as well. Or are they just in the business of making money and not looking after their customers?
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Frequent Contributor
Thanx Russ. Never looked at it in this way. I just wonder why Std bank never show these costs as well. Or are they just in the business of making money and not looking after their customers?
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Super Contributor
You can find the costs if you go to "my account" then "cash" then "cost structure'.I think what I'm referring to is the "market maker spread rate" which is 0.35% (on top of the flat fee of R50).
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Super Contributor
costs are the reason i stuck with alsi. manipulate leverage by keeping more capital and trade smaller position size but more consistently 30 bucks odd cost and a few hundred points gives better numbers for me. alsi you're exposed to top 40 shares anyway. plus its liquid and regulated. and if alsi isnt your thing or getting bored, ftse100 jpn225 djia they all work in similar ways. and if more adventurous dabble in forex spot. again position size small but technique consistant returns and costs are far better. plus platform and live charts are free unkike ost and many local cfd guys
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BullsnBears
Contributor
Stick to index futures. Lowest net costs in my experience.
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Stlucia
Occasional Contributor
I wonder what would happen if Standard Bank removed the minimum brokerage fee and charge a percentage only of .75%. Probably total pandemonium reaching all the way to the higher echelons at the JSE, who want the current system to continue. I am aware of the issue of live pricing, but I am sure that the costs can be recovered by reviewing the current pricing structure that is outdated.
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Super Contributor
lowest cost for in and out is ALSI.
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Highlighted
Super Contributor
Glad to have you back, Rams.
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