Yearly broker costs (wake up call)

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  • 10/11/2021 at 10:33 AM #179361
    JS

    Today I received the annual fee overview from my broker and am shocked again by the costs they charge on “normal” trades. The list of the different fees they charge is endless (>30).

    The costs run from 8 October 2020 to 7 October 2021.

    That year I executed exactly 83 (CFD) trades, mainly on the US indices, with an average position size of 1.2

    Costs € 3262,54

    1 user thanked author for this post.
    avatar PeterSt
    10/11/2021 at 11:22 AM #179368
    PeterSt

    Whoa !

    Eh, did I already mention that XXXXXXXXX?
    All right, a bank is even better at this.

    Now I am not sure whether I should look at my own costs (if they are traceable at all) because all is just incorporated in the commission I pay (to Interactive Brokers). Only PRT subscriptions are separate, but free because I receive a sufficient amount of credit (1 euro per trade).

    As far as I know, only the subscriptions to IB real time data for using their platform (Trader Workstation) adds additionally (relatively small costs).

    10/11/2021 at 11:53 AM #179372
    GraHal

    Please might you break your charges of 3262,54 down, does not have to be exactly correct.  You will know the language descriptors.

    For example, for 83 trades on the DJI, if all were worst case for spread then it should be no more than 83 * (4.8*1.2) =  478?

    Have you had tons of overnight fees, like almost 365 nights at 7 per night??

    Seems a scary amount of charges / fees, we all need to check our equivalent charges and see if comparable?

    1 user thanked author for this post.
    avatar PeterSt
    10/11/2021 at 12:03 PM #179374
    PeterSt
    GraHal wrote:

    Seems a scary amount of charges / fees, we all need to check our equivalent charges and see if comparable?

    Well, I just did and it appears I have about half of JS’s costs.  And that with around zero real trades (but having open positions).

    But a question, if I may :
    I just looked in my bank account for IG transactions and I can’t find any. Can someone (@JS ?) tell me what name to look for ?

    I have a PRT sponsored IG account. I was always told that it is for free, except for when you don’t trade 4 trades per month, then it costs 30 euros for that month.
    But then I don’t find any transaction in my bank account …

    10/11/2021 at 12:07 PM #179376
    PeterSt
    GraHal wrote:

    For example, for 83 trades on the DJI, if all were worst case for spread then it should be no more than 83 * (4.8*1.2) =  478?

    Apologies for being dumn :
    Is “spread” something which  is explicitly payed/charged for ? I would not think so. I would think it is the drop in gain on the instrument, visible (really so) at entering the position.

    10/11/2021 at 12:13 PM #179377
    JS

    I use a simple trend following system, long only, on the indexes.

    What annoys me the most are the weekend costs, the market is closed but the costs continue.

    10/11/2021 at 12:27 PM #179378
    JS

    @PeterSt Every working day and after the weekend I receive, by email, an overview of the costs incurred.

    Once a year I receive the annual cost overview.

    10/11/2021 at 12:41 PM #179379
    JS

    IG statement:

    CFDs and turbos are complex instruments and, due to the leverage effect, carry a high risk of rapidly increasing losses. 73% of retail investors make a loss when trading CFDs with this provider. 74% of retail investors in a loss when trading turbos with this provider. It is important that you have a good understanding of how CFDs and turbos work and that you consider whether you can afford the high risk of loss. Options are complex financial instruments. Your assets are at risk

    IG is actually saying that the customers who lose do not know about CFDs and Turbos, but to what extent do the costs they charge play a role in this?

     

    10/11/2021 at 12:42 PM #179380
    GraHal
    PeterSt wrote:

    explicitly payed/charged for ? I would not think so.

    You are correct, I was rambling! 🙂  So that makes JS’s charges even more concerning?

    I’ll check my annual statement and report back.

    But you IB guys will have commission as listed and explicitly charged for?

    10/11/2021 at 12:53 PM #179381
    PeterSt
    JS wrote:

    I receive, by email, an overview of the costs incurred.

    Nah, that does not sound familiar to me.
    What I receive on a daily basis is a “Rekeningoverzicht”. This only tells the added or written-off $ based upon closed trades or Mark-to-Market (open) positions (I am sure everybody receives this). And this $ is incorporated/netted in the portfolio (account). With the costs as such shown on the overview (screenshot) which is similar to yours, nothing seems to happen in my (lucky ?) case. Please notice that this cost overview was explicitly asked for my me from the IG system (hence it is not from an email). See third screenshot.

    10/11/2021 at 1:00 PM #179385
    PeterSt
    JS wrote:

    IG is actually saying that the customers who lose do not know about CFDs and Turbos, but to what extent do the costs they charge play a role in this?

    LOL

    The 75% or so number is well known and it is vented to any new trader quite explicitly. This is because e.g. de PRT salesman will know in advance that “you” are bound to disappear again because you will run out of money. That is, … with a 75% chance.

    Sadly I can not judge the impact of the IG costs I don’t seem to pay. But I do know about the commissions I pay to IB. On a daily basis they comprise the same amount I showed from my IG costs of the past year. But at least it brought me something so I can’t complain about that at all.
    So suppose I would find out after all that I pay that amount I showed to IG, then I really would now know about a realistic reason (apart from (overnight) interest) and I would be steamed. One thing which makes it vague for me : the 30 I need to pay per month when I don’t trade.

    Maybe we are sloppy with money. 🙁

    10/11/2021 at 1:07 PM #179386
    PeterSt
    GraHal wrote:

    But you IB guys will have commission as listed and explicitly charged for?


    @JS    , do you actually have a Prorealtime sponsored IG account ? or is it a direct IG account ?

    @GraHal, no, it is not explicitly charged outside the portfolio account (only PRT subscriptions are). See the little screenshot in the attachment;
    The commissions are deducted from the portfolio $. Also see the 2nd screenshot for what is added up (more items can be shown, like dividend accruals and more).

    10/11/2021 at 1:16 PM #179390
    JS

    @PeterSt I have a ProRealTime sponsored account.

    10/11/2021 at 1:25 PM #179391
    Eric

    “When should I use a forward bet / contract?”

    https://www.ig.com/uk/charges

    10/11/2021 at 1:30 PM #179392
    GraHal

    I had a quick glance at my Annual Statement and, in comparison, my conclusion is that JS incurred losses on trades in the region of 3262,54 for the 12 months to 7 Oct 21?

    Would you concure with above JS?

    IG refer to it as a cost and it is a cost … cost of trading with IG?

    I’m going to look at my statements in closer detail tonight, else the day will pass me by! 🙂

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