Choosing an online broker… continued

To re-cap, I’ve decided that I want a new online broker so that I can benefit from cheap share dealing.

I think I’ve narrowed it down to a shortlist of two .

  • x-o.co.uk
  • The Share Centre

x-o.co.uk

x-o.co.uk seems to be a no-frills online broker offering trades at a flat fee of £5.95
Not much more needs to be said about x-o really.

The Share Centre

The Share Centre has introduced a Premium Trading option. For £2,500 + VAT per annum you can trade as often as you like, with no dealing commission per deal. Great for high volume traders.
If you trade frequently with The Share Centre, the dealing commission is a flat £7.50 per deal (this option costs £20 + VAT per quarter).
There is also quarterly account administration fees (Dependent on account).
So deal 20 times a month and your annual dealing commissions will be:
20 deals at £7.50 x 12 months = £1,800 per annum.
Plus 4 x quarterly account administration fee (£2.50 + VAT each quarter on the frequent trader option) = £12
So a total of £1,812 for the year (this doesn’t include stamp duty or PTM Levy).
But what if you deal more often than this?
Say you trade 40 times per month. The costs then are:
40 deals at £7.50 x 12 months = £3,600 per annum.
Plus 4 x quarterly account administration fee (£2.50 + VAT each quarter on the frequent trader option) = £12
So a total of £3,612 for the year (again, this doesn’t include stamp duty or PTM Levy).
When you are dealing at this level of frequency, their “Premium” dealing option costing £3,000 per annum starts to make sense.
So the question is, should I go for the “cheap and cheerful” x-o.co.uk at £5.95 per deal, The Share Centre “Frequent Trader” option at £20 + VAT per quarter and £7.50 per deal, or The Share Centre “Premium” option at £3,000 per annum but NO dealing commission.
I have some thinking to do…

One Reply to “Choosing an online broker… continued”

  1. X-o.co.uk is definately a no frills share dealing. However one other that i came across was Halifax share dealing at £11.50 per trade plus stamp duty and PTM levy.
    They also have another option of advanced trading for £1.50 plus stamp duty and PTM which can be set up to 2 days prior. They usually have 4 days a month for this preset. This can make quite a nice saving.
    Plus they have a good research centre. I am also on the road of amateur investing not started long ago. Keep up the good work.

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