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Are there any stockbrokers who only charge a percentage of the trade as the transaction fee, without a flat fee (e.g just 0.1% rather than £1.xx and 0.0xx%)? If not, why not? Is this flat fee something the stockbrokering company has to take upon themselves with every trade, and so something they choose to pass to the client with every trade? When it comes to transaction fees, the best I've found is Degiro but I have a small amount of initial capital so a percentage-only transaction fee has the potential to save me money. I'm based in England and wish to trade mainly stocks on the London Stock Exchange.

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If not, why not?

What about this - because they do work. And the work is independent of how much moeny is in use. I.e. ONE order is ONE order, whether the number is 100 or 10000, still one order.

And guess what, in the past in many areas you DID pay percentage - and it was a lot higher ;)

the best I've found is Degiro but I have a small amount of initial capital

And the low initial capital is what you have to fix. Because seriously, not a lot of moeny also means - you are not important for any broker. If you can not make them money, why should they provide the service?

So, yes, in cases like this you pay for every operation done, which results in a flat fee. You really do NOT want a percentage based fee, which would not be "0.0xx", but more like "x.xx" percent, and have a minimum transaction value.

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  • "And the low initial capital is what you have to fix. Because seriously, not a lot of moeny also means - you are not important for any broker. If you can not make them money, why should they provide the service?" Lots of people trading small amounts of money could represent a significant revenue.
    – CheapWill
    Nov 19, 2018 at 13:46
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    Not if you moe from 6USD per ticket to cents, which a 0.0xx% number would indicate. It would in fact likely be less than the other fees for the trade. Math matters. And lots of pople trading small amounts COULD - but DO NOT represent significatnt margin. Revenue yes, and most will be eaten up by providing the service. Companies focusing on revenue LOOSE money, not make money. It is all about margin.
    – TomTom
    Nov 19, 2018 at 13:59
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20+ years ago, retail trade in the US was dominated by full-service brokers whose commissions were based on percentage. Today we're in an era of deep discount brokerage where the there are two primary commission structures: per-trade and per-share rates and full-service brokers now lean toward an annual 1% to 2% fee based on a client’s managed assets. There are also a couple of no commission brokers.

The size of your trades determines which structure is best for you. If you trade a larger amount of shares all at once, a per-trade fee is better. If you scale in and out of positions, a per-share structure is better.

I can't see how paying a percentage commission is likely to be better than paying as low as $2.95 (per-trade) or 50 cents for 100 shares (per-share).

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