How to calculate stock commissions? What price should I sell my stocks to make a profit? A comparison of the costs of various stock trading methods as of 2025!

What is the stock trading Commission? What fees are included?

“Stock trading Commission” refers to the costs that must be paid when conducting stock transactions. These costs are typically collected by the brokers of the securities company for the execution and processing of stock trade orders. The specific amount of the Commission varies depending on the trading method, trading frequency, securities company, and exchange.

Generally, commissions include “transaction commissions” and “other costs” (settlement fees, transaction taxes, etc.). It is important to have a detailed understanding of these costs before engaging in stock trading.

How is the commission for Japanese stocks calculated?

For Japanese investors, the most common way to invest in Japanese stocks is to trade through a specialized stock trading account. The main costs include a “Commission of 0.1% to 0.3% of the transaction amount” and a “0.3% securities transaction tax.” The transaction tax is only imposed when selling stocks. Many Japanese securities companies offer discounts on commissions, which are usually around 50% to 60% of the standard commission rate.

The calculation method for trading commissions for Japanese stocks is as follows:

Costs incurred when purchasing stocks: Commission

Commission = Stock price per share × Number of shares × Commission rate of 0.1% to 0.3% × Discount rate

Costs to be paid when selling stocks: Commission + Transaction Tax

Commission = Stock price per share × Number of shares × Commission rate of 0.1% to 0.3% × Discount rate

Transaction Tax = Stock Price per Share × Number of Shares × 0.3% Transaction Tax Rate

For example, taking SoftBank Group (9984.T) as an example, if you buy/sell one unit (100 shares) at 10,000 yen and assume a 60% discount on the brokerage's Commission, the costs you need to pay would be as follows:

Cost of purchasing stocks: 600 yen

Cost when selling stocks: 600 yen + 3,000 yen = 3,600 yen

How is the Commission for US stocks calculated?

Generally, when investing in US stocks as an overseas investor, you do not need to pay a 30% capital gains tax. The main way to trade US stocks in Japan is through overseas securities companies or domestic securities companies' agency services. Here, let's calculate the stock trading Commission using these two methods. The costs associated with US stock trading include the securities company's commission and other costs (0.3% settlement fee, 0.0008% SEC fee, 0.0145% transaction activity fee, and 30% dividend tax). The dividend tax is only levied on stocks that pay dividends, and other costs are collected by US securities companies on behalf of the investors.

U.S. stock trading using the agency service

Sub-brokerage refers to what is also called “foreign securities entrusted trading business”. Specifically, it means that an investor first opens a sub-brokerage account with a domestic securities company that has qualifications for foreign securities brokerage, and then uses that account to buy and sell foreign stocks. The actual flow is that after the domestic securities company receives a commission order for buying or selling, it places the order with a foreign securities company. This process involves two commissions, which is why it is called sub-brokerage.

How is the commission for the intermediary service calculated?

Strictly speaking, when placing orders for US stocks through the agency service, it includes Commission, exchange fees, and TAF fees, but the latter amounts are usually small enough to be negligible. The main cost is the Commission. The standards for the fees charged by securities firms differ, but they generally range from 0.25% to 1%. Additionally, the securities firms that provide agency services usually set a “minimum Commission” or “minimum consumption Commission,” ensuring that the Commission does not fall below the “minimum consumption” regardless of the order size.

For example, taking Gate as an example:

Gate's commission for U.S. stocks is divided into face-to-face orders and electronic orders, with a commission of 1% for face-to-face orders and a commission of 0.5% - 1% for electronic orders.

According to the overseas market trading regulations stated on Gate's official website, the minimum consumption for the US stock market is: the minimum Commission per face-to-face order is 50 USD, and the minimum Commission per electronic order is 35 USD.

In addition to the Commission, there are additional costs as follows:

• Transaction tax at the time of sale 0.00278%

• System service fee 3 USD per transaction

• ADR Custody Fee Based on the prospectus of each issuing company, 0.02 USD - 0.05 USD per share

• Daily international remittance Commission 15 USD

Therefore, when investing in stocks through the brokerage services of a securities company, it is necessary not only to compare the Commission but also to check the other cost structure on the securities company's official website.

At what price should I sell stocks to avoid a loss?

Minimum profit to avoid losses in Japanese stocks:

When trading stocks, you cannot simply sell because they have risen. For example, in the case of SoftBank Group mentioned above, you would not incur a loss unless you make a profit of more than 600 yen + 3,600 yen = 4,200 yen. Therefore, you need to calculate not just the rate of increase or the costs incurred at the time of sale, but all the costs associated with that stock transaction. You should only consider taking profits when your earnings significantly exceed all the costs incurred.

Minimum profit to avoid losses in US stocks:

In actual transactions, it is necessary to use the calculation method shown above and check the cost statements from different platforms to calculate the Commission. When selling stocks, you must secure a profit amount that exceeds all costs that need to be paid at the time of purchase and sale; otherwise, you cannot guarantee that you will not incur losses. You should not only look at the rate of increase.

However, when engaging in short-term trading of U.S. stocks, neither of the methods mentioned above is actually very advantageous. This is because the commissions incurred from high-frequency trading are too high. Therefore, for investors who are engaged in short-term (high-frequency, day trading) trading, it is recommended to first consider trading U.S. stocks on a CFD (Contract for Difference) platform.

Why are the costs of CFD trading low?

CFDs are contracts with no fixed expiration that allow investors to buy or sell the rise or fall of specific assets, enabling them to profit from the difference between the buy and sell prices. This logic is similar to making a profit from a single transaction in stock trading. However, since CFDs do not involve actually holding the stocks and the trading is done on price differences, only the spread and overnight Commission are charged in CFD trading. When trading US stocks through a brokerage that offers CFD services, there are no Commission, transaction taxes, or deposit and withdrawal fees. This makes it very suitable for investors engaged in short-term (high-frequency, day trading) transactions, as there is no concern about increased Commission regardless of the number of trades. However, when choosing a platform, it is necessary to compare the spreads of each platform.

What factors influence stock trading commissions?

The differences in stock trading commissions are mainly influenced by the exchange, brokerage, trading frequency, and transaction amount.

Trading Market:

In different stock trading markets, the buying and selling Commission varies, and especially in exchanges where the settlement currency differs, the regulations regarding the upper and lower limits of the Commission vary, and these regulations change over time.

Securities Company:

Full-service major brokerage firms tend to charge higher commissions and have higher fees, but they may also offer different commission discount promotions for investors. As a result, the trading fees of different brokerage firms can vary significantly, and even the same brokerage firm may have different costs depending on the time.

Transaction Amount:

The commission for stock trading is calculated at a fixed rate, so usually, the higher the transaction amount, the higher the trading commission. However, some brokerage firms may offer commission discounts to investors with large transaction amounts or charge a fixed fee per transaction instead of a percentage.

Trading Frequency:

A single stock transaction includes two commissions: one for buying and one for selling. The more frequently transactions occur, the more commissions need to be paid. Frequent trading generates high commissions. Some brokerage firms may offer commission discounts for high-frequency traders.

Frequently Asked Questions about Stock Trading Commission

Q1: What costs are associated with trading Japanese stocks?

A1: The main costs of trading Japanese stocks are the commissions of the brokerage and the transaction tax. The commissions of Japanese brokerages range from 0.1% to 0.3% of the transaction amount, and the transaction tax is 0.3%. When buying and selling stocks, the brokerage charges a commission once for each purchase and sale, and the transaction tax is only levied when selling stocks.

Q2: Which securities company for Japanese stocks offers the most favorable Commission?

A2: All major securities companies in Japan offer preferential discounts to users, but the specific discounts vary by securities company.

Q3: How can I purchase US stocks in Japan? Are there any recommended US stock trading platforms?

A3: You can purchase through overseas brokerage services of Japanese securities companies or trade directly with US securities companies. Recommended platforms for trading US stocks include Gate, Interactive Brokers, and others.