Share options – buying and selling and how best to do it
If you’re going to dabble in shares for the first time or venture online rather than maybe through the more traditional channels, where do you start?
Its lowest administration charge is €100 a year, but this varies depending on the nature of the advice given.
Its standard commission rates are 1.5 per cent for the initial €25,000 and the balancing amount above the €25,000 being charged at 0.75 per cent.
Custodial charges for foreign stocks range from €45 to €80 depending on the region.
Choose the pricing model that suits you
If execution-only is more your thing, you’ll find that the market has shrunk somewhat since Danske Bank’s departure.
However, there are still plenty of options available. Davy, for example, offers an execution-only option through its Davy Select service, with a minimum transaction fee of €14.99 or 0.5 per cent of the trade. You will need just €500 to open an account.
Campbell O’Connor operates a telephone dealing service only, but you can expect to pay a higher fee – €25 or up to 1.5 per cent of the transaction. However, unlike Davy, you won’t have to pay an account maintenance fee. So for the infrequent trader this could prove to be more attractive.
Another way of looking at it comes from Interactive Brokers, which applies different charges depending on where the shares you’re buying are.
For example, US shares cost $0.005 cents each to trade, for a minimum charge of $1 (€0.74) and a maximum of 0.5 per cent of the trade value.
British stocks will cost £6 (€7) to trade up to a maximum trade value of £50,000 (€59,087). Trades above this will attract an additional charge of 0.05 per cent on the incremental amount. It also offers a “cost-plus” option, where commission decreases depending on volume.
However, while transaction commissions may be low if you don’t spend $10 (€7.40) on commissions every month, the difference between this fee and the commission you have paid will be deducted from your account as an inactivity charge.
The best deals, not surprisingly, are often pitched at frequent traders. TD Waterhouse, for example, judges the frequency of trades transacted with it on a three-month basis.
If, for example, you have completed 10 or more trades in one three-month cycle, you will be eligible for a frequent trader rate for the next three months. This brings the transaction cost, which is typically €20, down to €15 a trade.
Davy has launched a new frequent trading account, Select Trading Plus, which has no maintenance fee, but rather an “all-in” annual dealing charge of 0.9 per cent of the account balance (subject to a minimum of €400). You need to do about 20 trades a year to get the value out of this account.