Broker advice needed.Low startup fund+extra US trading fees. How do i beat the rake?

Dgee_2

Hi guys,



I'm a new to stock trading and setting out on my path. AsI'm only starting out I only want to dip my toe into the water. I'm thinking £ 700 ( approx 1000 usd ) I won't make frequenttrades as the cost would eat into my small capital.



As the title suggests I'm looking for a brokerage that wouldgive me the most bang for my initial buck.

Requirements for a broker:

I must be able to trade on the US markets as well as the UK.



There is a specific companies stock I want buy on thenasdaq. Let's give this company the name XYZ.

After some research my concerns are:



With such a small starting stake I'm worried it will makebeating the rake (overcoming fees of the brokerage sites) very hard. To put it another way after all the fees there may not be much if any profitleft.



For example I buy 1000 us dollars worth of XYZ.

Let's say a brokerage costs over a year:

£ 15 when making the initial trade. ( I know there are lower charges but I'vetried to average this out as some sites charge higher for trading abroad)



£20 every 6 months account fees x 2 ( if the site doesn't have this charge itmay charge a roughly comparable "holding forgien stock charge")



1.5% currency FX exchange rate when buying

 

1.5% currency FX exchange rate when Selling



( I'm sure there are many hidden fees I'm not spotting too)



Add all this together it would cost approximately

100 us dollars for this one trade



So for me to even to even break even on this trade XYZ wouldhave to increase in value by 10%.



This seems a very hard rake to beat repeatedly for a smallinvestor.

Are there any cheap brokerages which would get this 10%figure down dramatically for investing in overseas markets?



Or have I made misstep in how I'm looking at the wholesituation?

Do I need to be braver and dip my toe more into water? I.e. The rake becomes less the bigger your trade....

Looking forward to reading advice as my heads spinningwith questions



Thanks,

Dave

Plus

Have a look at Interactive Brokers. They're a low cost US broker that operate over here, and the costs are substantially lower than those you cite.

Dgee_2

Thanks for the reply but it doest look good to me. The juice is high for in frequent traders.

From a review site.

"
New clients should be aware of the miscellaneous fees and minimums with Interactive Brokers. In a nutshell, spend at least $30 in commissions each month and you are in the clear; otherwise, charges for inactivity can reach up to $20 or more. A full breakdown can be found on the Commissions & Fees tab in the navigation menu above this review. "


Also there is a min deposit required. that's on the high side. 10k

Id post links but they don't trust me as im so new haha,

masonic

https://www.degiro.co.uk/ might be more suitable. However, it is not covered by the FSCS, so you'd have to rely on the Dutch compensation scheme if it went under.

Dgee_2

Thank you. Just looked into in detail. Looks superb for what I require,

Plus

DeGiro does a lot of stock lending, which means if they go bust you might discover they don't actually have your shares. In addition, the shares are not registered in your name (unlike most other brokers) so if they went bust you have to depend on there being enough left over to give back to investors. They also aren't covered by the Dutch compensation scheme (due to a quirk they exploit).

So somewhat more risky than other brokers.