Trading Fees For Foreign Exchanges

Ask your investment, budget, and other money related questions here
Post Reply
Jason
Posts: 2173
Joined: Mon Jan 30, 2017 8:37 am

Trading Fees For Foreign Exchanges

Post by Jason » Thu Aug 01, 2019 5:16 pm

Motley Fool recommended the CBD producer Charlotte's Web. I paid for that shit so thank you very much. I decided to take a small position in my Vanguard SEP. A message came up saying I needed to call customer service who explained that the stock was not traded on a US exchange and there was a $50.00 trading fee on top of the typical commission. I said "Are you fucking high?" Ok, that part is not true. But I put off the trade. Anyone else deal with this issue? $50 seems excessive especially since it will be an on-going if I decide to increase my position.

FIRE 2018
Posts: 127
Joined: Fri Jul 19, 2019 7:32 am
Location: Florida

Re: Trading Fees For Foreign Exchanges

Post by FIRE 2018 » Thu Aug 01, 2019 7:02 pm

Seems ok

slowtraveler
Posts: 767
Joined: Sun Jan 11, 2015 10:06 pm

Re: Trading Fees For Foreign Exchanges

Post by slowtraveler » Fri Aug 02, 2019 6:12 am

Ridiculous. That's like 16 hours of massage now that I found a $3/hr massage place.

Fidelity and Schwab wont charge this ridiculous fee. They will, however, charge $50 to buy most mutual funds so keep both Vanguard and F/S for different purposes.

Seppia
Posts: 1012
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Trading Fees For Foreign Exchanges

Post by Seppia » Fri Aug 02, 2019 7:38 am

It was up 15% yesterday BTW

I don't understand where this is traded (is it Canada?), but I would expect Etrade or similar o charge you much less.
If it's canada, I paid like $9 a million years ago via Etrade to buy Suncor, so should be the same

jacob
Site Admin
Posts: 11154
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Re: Trading Fees For Foreign Exchanges

Post by jacob » Fri Aug 02, 2019 7:51 am

Not even all US stocks are traded on all US exchanges. There's no such thing as the "stock market" in any physical sense. Instead, there are a bunch of physical exchanges (e.g. NYSE, AMEX, CME, ...), a bunch of electronic nets featuring direct market access (substituting computers for the yelling pit), a bunch of dark pools, and for really big institutions (Goldman or GetCo) internal crossing networks. In 2015, when I quit, there were about 40 in total in the US. No idea how many there are now. It would be exceedingly rare for a company to access all of them directly. To execute retail trades, a broker needs to have access (called a seat if it's an exchange; dunno what pool access is called) to an exchange which is something they pay a lot of money for.

If you're requesting to trade some security that is only traded on an exchange in Elbonia, your broker probably have to go to a bigger operator (like Bank of America) who then might have a division in Elbonia which then has a trading desk which then have access to a seat at the relevant exchange.

Each institution along this path (back and forth) takes a cut. The longer the path or the more exotic it is, the more it adds up to your commission. If you were able to look at the individual costs and fees for a trade (I have), it would look a little bit like your electric bill in terms of all these little fees.

One of the reasons common US equity trades have become so cheap (some brokers offer free trades) is that some exchanges actually PAY them to post liquidity (limit orders) to attract business. The broker gets the money and you get the trade for free. As they say, when anything is free, you're the product.

TL;DR - Just stay away from exotic investments. They're a hassle for so many reasons.

Jason
Posts: 2173
Joined: Mon Jan 30, 2017 8:37 am

Re: Trading Fees For Foreign Exchanges

Post by Jason » Sat Aug 03, 2019 8:36 am

I tested out purchasing a share on my ETRADE account. I did not have the same issue with special fees, just the normal commission. Although like Vanguard, it has to be a limit order. I think these types of indexes are associated with penny stocks. The problem is its SEP money so I can't remove it from Vanguard so I'll have to transfer some other money for this particular purchase and figure out what to purchase with the new cash. Try to take advantage of Trump's phony trade war. This guy's policy decision making process is like a thirteen year old girl figuring out what to wear to school.

My 70+ still smoking dope associate says he thinks Charlotte's Web is a good investment. He gave up dropping acid when he became a father so its not like he's completely irresponsible.

Thanks to Seppia for the Etrade idea. Now whoever wants to can shit up my thread. Although that's usually me.

zocab
Posts: 10
Joined: Fri Jul 26, 2019 1:04 pm

Re: Trading Fees For Foreign Exchanges

Post by zocab » Sun Aug 04, 2019 7:00 am

Jason wrote:
Sat Aug 03, 2019 8:36 am
I tested out purchasing a share on my ETRADE account. I did not have the same issue with special fees, just the normal commission. [...snip...]
I don't know how fees compare, but Interactive Brokers are also a good option for trading (A) specialty things and (B) around the world (including for non-US persons not living in the US, who may want to cheaply trade US or other markets). E.g. fees for Canada (since someone mentioned Canada) are 0.01c / share with a 1 CAD minimum. For this thread it looks like the issue is it's an OTC stock, which I have no experience with - but chances are good IB would work.

Jason
Posts: 2173
Joined: Mon Jan 30, 2017 8:37 am

Re: Trading Fees For Foreign Exchanges

Post by Jason » Sun Aug 04, 2019 10:29 am

Fidelity also has guidelines re: OTC or "pink sheet" stocks but not an additional fee. Just normal commission.

jacob
Site Admin
Posts: 11154
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Re: Trading Fees For Foreign Exchanges

Post by jacob » Sun Aug 04, 2019 12:10 pm

For OTC and other thinly traded markets (e.g. US equity options) paying the spread (large difference between bid and ask) and/or slippage (price moves away from you when you enter) might be the bigger cost depending on what size you trade. That kind of cost is a zero-sum game, so if you're a shark, this is also a way to make money.

Jason
Posts: 2173
Joined: Mon Jan 30, 2017 8:37 am

Re: Trading Fees For Foreign Exchanges

Post by Jason » Sun Aug 04, 2019 3:35 pm

I'm not a shark. Unless you mean the child dressed in a shark's costume riding around the house on a roomba pretending to be a shark type of shark. In which case, I'm like fucking Jaws. I'm just trying to get into the marijuana game because people love getting high and I'm buying this stock like I buy other stocks.

Post Reply