When you buy or sell a stock, you don’t only pay for shares. There will be additional cost for every transaction called “trading fees.”
For example, if you are to buy 300 shares of SCC at P32.30, it will cost you P9,690 + trading fees.
To compute for trading fees, refer to COL’s trading and handling fees.
For every stock you buy or sell – win or lose, you will have to pay for commission, taxes, transaction, and clearing fees.
So, if you trade a lot, you might want to rethink about your trading strategies.
Minimum commission fee
If you look at the commission fee, it is either 0.25% of the gross trade amount or a minimum of P20.
For this trade, the commission fee is P24.23 which is calculated based on 0.25% of the gross trade amount (P9,690 x 0.25%).
Here’s the breakdown…
But what if you are to buy only 100 shares of SCC?
If you take 0.25% of the gross trade amount (P3,230 x 0.25%), the commission fee would be P8.08 only. But since there’s a minimum charge, it would cost P20.
So, how many shares of SCC should you buy to maximize commission fee?
Simple. If you divide P20 by 0.25%, you get P8,000. Meaning, you need to buy at least P8,000 worth of SCC shares to maximize trading fees.
This applies every time you buy or sell a stock. If you spend lower than P8,000, you will still have to pay the minimum charge of P20.
Key take aways
- If you trade a lot, make sure it’s worthwhile since it affects your portfolio. Keep in mind, the more you trade, the more fees you pay.
- When buying or selling a stock, spend at least P8,000 worth of shares to maximize trading fees.
In this article, you’ve learned how to maximize trading fees when buying and selling a stock. If you have some questions, feel free to drop me a comment below.
Thanks for reading!