Remember, even if you’re day trading and avoiding swap fees (overnight fees), there are other costs associated with trading, which can vary depending on the type of instrument and broker.
Here are the main types of fees you might encounter:
Spreads: The difference between buy and sell prices. Brokers often earn from spreads, so every trade costs a small cost.
Commissions: Fees some brokers charge per trade. These add up quickly with frequent trading, especially on stocks, options, and forex.
Platform/Data Fees: Fees for using advanced trading tools or getting live data. Usually, these are monthly or annual charges.
Deposit/Withdrawal Fees: Some brokers charge fees when you deposit money or withdraw your funds.
Currency Conversion Fees: If your trades involve different currencies (e.g., buying U.S. stocks from a non-U.S. account), you may be charged a currency fee.
Slippage: When trades execute at a slightly different price than expected, often due to fast-moving markets.
Inactivity Fees: Some brokers may charge a small fee if you stop trading for a while.
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