Recently, I’ve noticed many beginners don’t really understand how much they need to pay when buying stocks. They look only at the price change percentage and think about whether to sell, but after calculating, they realize they haven’t actually made a profit. So today, I want to talk about how stock transaction fees are calculated and how much a stock needs to go up to avoid losing money.

Let’s start with Taiwan stocks. If you buy Taiwanese stocks, there are basically two fees: commission fee and transaction tax. The commission fee is 0.1425% of the transaction amount, but most brokerages offer discounts, usually around 50% to 60%. The transaction tax is only charged when selling, and it’s 0.30% of the transaction amount.

For example, suppose you buy one lot of stocks at 200 NT dollars each. If the discount is 60%, the purchase fee is 171 NT dollars. When selling, besides the 171 NT dollars commission fee, you also pay 600 NT dollars in transaction tax, totaling 771 NT dollars. This means the stock needs to rise by at least 942 NT dollars for you not to lose money. Many people don’t calculate this clearly, so they think they’ve made a profit with a small increase, but in reality, they haven’t even recouped their costs.

Taiwan brokerages offer many options, like Fubon, Yuanta, E.SUN, and Uni-President Securities, which are all pretty good. Their discount rates range from 16.8% to 60%, and the minimum fee for odd lots is usually 1 NT dollar. When choosing, mainly consider which broker offers bigger discounts or which has branches closer to you.

Talking about US stocks gets a bit more complicated. Taiwanese investors generally have two ways to buy US stocks: one is through Taiwanese broker’s cross-border agency trading, and the other is by opening an overseas brokerage account directly.

For agency trading, the commission fee is usually between 0.25% and 1%, but there’s often a minimum fee, typically $25 to $50 USD. Yuanta charges 0.5% to 1%, Cathay is 0.35%, and Fubon is the cheapest at 0.25%. Besides the commission, there are other miscellaneous fees like system service charges, remittance fees, etc., which add up. So, agency trading is more suitable for those with larger trading amounts.

If you use an overseas broker directly, it’s a different story. Platforms like Interactive Brokers and Firstrade often waive stock trading commissions, but there are deposit and withdrawal fees, around $30 USD. CFD platforms like Mitrade even support deposits and withdrawals in New Taiwan Dollars, with a minimum deposit of only $50 USD, and they have very low spreads. For small investors, this can save a lot of costs.

But here’s a key point: if you want to do short-term or high-frequency trading, trading stocks isn’t cost-effective. Because each trade incurs a fee, frequent trading can rack up high costs. In this case, trading US stocks via CFD platforms is smarter, since CFDs only charge spreads and overnight fees, with no transaction tax or deposit/withdrawal fees.

Returning to the core question of how to calculate stock transaction fees, there are four main factors: trading market, broker, transaction amount, and trading frequency. The fee structure varies completely depending on the market where the stock is traded. Large brokerages usually have higher fees but offer better service. The larger the transaction amount, the higher the absolute fee, but sometimes big traders can negotiate discounts. For frequent traders, it’s crucial to compare carefully, because the round-trip fees can eat up most of the profit.

Therefore, before buying stocks, you must calculate the costs clearly. Whether it’s Taiwan stocks or US stocks, add up all the buying and selling fees, then see if your profit exceeds this total. Just looking at the price change percentage isn’t enough—that’s a common reason many beginners lose money. Choosing the right platform and method according to your trading style can save you a lot of unnecessary expenses.