Cost of trading


    How much does it cost to trade online?

    In trading, financial institutions such as online brokers fulfil the important role of bringing buyers and sellers together. This creates a lot of efficiency compared to a situation where every market participant would need to organise their own trades.

    This means that thanks to brokers and the Internet, the cost of trading is lower than ever before, allowing traders to enter the market even if they do not have a lot of trading capital.

    Still, there is some cost to trading: the brokers and banks need to take money for their services. Usually, this is done by asking for fees in the form of commissions and spreads.

    For example, a bank might ask for a $5 fee if one of their customers wants to buy stock market shares of a company through them.

    For a trader, managing the cost of trading is an important skill. You need to choose the right broker, where the trading fees are one of the important criteria.

    Also, it is important to adhere to the correct money management to protect your trading capital: