SEC & NASD Fees

M

Marc to Market

Quick question guys: I recently changed brokers and after looking at my first few online account statements, I see that I am charged not only an SEC fee for each sale, but an NASD fee as well. Do all brokers charge the NASD fee? Even the deep discount brokers like E-trade, Ameritrade, etc? I remember paying the SEC fee at my last broker but not an NASD fee. BTW, my current broker says the NASD fee is multipled by the total amount of shares; not the principal amount like the SEC fee. Does this all sound right?

Thanks in advance,

Marc
 
Quote from Marc to Market:

Quick question guys: I recently changed brokers and after looking at my first few online account statements, I see that I am charged not only an SEC fee for each sale, but an NASD fee as well. Do all brokers charge the NASD fee? Even the deep discount brokers like E-trade, Ameritrade, etc? I remember paying the SEC fee at my last broker but not an NASD fee. BTW, my current broker says the NASD fee is multipled by the total amount of shares; not the principal amount like the SEC fee. Does this all sound right?

Thanks in advance,

Marc
More...

Sounds right to me. Genesis charges the NASD fee. I believe the this fee is 0.00003 times the number of shares, with a $0.009 minimum and a $0.18 maximum per order. So on a 1000 share order, this pass through fee would cost three cents.
 
My response was to correct the rates in the previous post (where Genesis apparently charges an old rate).

While I'm at it, though, there are a lot of threads lately about which brokers charge which fees and pay which rebates. It seems they are asking the wrong question.

Isn't your total trading cost the important part?

Like any other business, a broker looks at their total costs, adds the profit they want/need to make, and charges the resulting price.

Let's say, for the particular way you trade, your fees plus ECN charges minus rebates add up to a cost of $0.0015/share. It doesn't matter whether you go with broker A at $0.0035/share plus/minus fees/rebates (net $0.0050) or broker B at $0.0050/share all-in. Factor in software and other fees, too, of course.

Personally, the last time I compared brokers, I took a copy of my trade accounting spreadsheet and built columns in it that calculated costs according to different brokers' schedules. Sum the columns, and you know which is cheapest.
 
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