Question about trading ASX shares

[JulianG]

Hi all

Feedback noted, thanks.

Yes we are more expensive for Australian trades than most Australian brokers. That is because the volumes of trades they receive from their citizens is much larger than we receive from ours. E*Trade puts through more trades in a day on the ASX than the entire number of NZX trades in a month. Broking firms are largely fixed cost scalable businesses so that explains the difference.

However, we are the cheapest in NZ for your purposes. We are a discount broker so you will receive discount choice. So no, we won't let our competitor clip the ticket on interest while you transact through us for the best brokerage rate. We'd like to make some money somewhere, as has been pointed out.

The FX is up to 1.5%. We charge the fairest rate of the day and rarely charge 1.5%, normally about 0.4% as many customers will testify. It is there to ensure we don't lose on volitility.

So Tobo if our honesty disturbs you it is because we are not playing smokes and muirrors. What you see is what you get. Nothing hidden. If you want more you will have to pay more. Our promise remains the cheapest brokerage in NZ.

[POSSUM THE CAT]

Julian Have A read of some of the conditions on those cheaper brokerage accounts like having large $ amounts in highly uncompetitive call accounts or an account maintence fee if you did not put through enough trades. For years as an investor rather than a trader it was cheaper to trade through a NZ online broker than an Australian broker. Some had $80.00 minimum brokerage. Have a look at the interest rates on CMC website compared With your Macquarie and does not seem to have the B/PAY or cheque book facility.

[JulianG]

Yow, thanks I will. It's always in the small print isn't it.

[Brut]

I have both ASB Securities a/c in my business name & Directbroking a/c in my personal name as I'm a trader I trade in both accounts.

Directbroking is cheaper to trade, the cost is $29 for up to $30k. ASB Securities are much more expensive. I brought 20,000 NZO @ $1.20 ($24k) this week & was charged $72. I trade alot so this makes a big difference to me.

My only complaint with Directbroking is that when you place an order to buy or sell it takes about 3 - 5 mins for the order to get processed (where ASB is instant). I'm not sure why it takes so long with Directbroking but it's fustrating especially when the price has moved (up or down)

[George]

ASB are also slow, daytrading through NZ firms is a waste of time
but can work for or against you.
Yesterday, sold TEL shares at break even as don't want the divvie
and thought they might run up a bit but not so.
Normal trading stops at 4.45 and you can only place limit orders so put
mine at 2.40 (last bid at 2.39) and if I missed so be it.
Guy rings me to say I had not changed my address so trade would
not proceed but could only get 2.38 anyway so I said that would do.
A few minutes later he says I was in luck as shares had traded
at 2.42. As I said, try daytrading with crap like that.

Daytraders could transfer money to a broker like Traderdealer
in Australia who have 12 trades on each note for one price of $30.
So $60NZ for 12 buys and sells on each stock or warrant (incl. puts).
This is not necessarily an advantage as one could trade more
by impulse than reason but the option is there.
But you need 16 trades each month so you don't get another
$40 or $80 for use of the Iress platform etc.
Aussie trades through an ASB AUD account can trade instantly but not
NZ ones so you could daytrade Aus stocks but at min $30
each trade.
George

[tobo]

Possum, thanks, I understand your point about extra fees whenever transacting between any bank and a broker. It occurred to me that ASB Securities had an advantage in that they could deal with themselves since they are a bank too, and thus I avoid the external transaction.

Regarding brokerage rates, I find it rather a concern that you are not always going to know how good a rate you are getting (speaking as a retail part-time investor with no Reuters screens surrounding me), so I had not realised that a worse rate might apply if I have insufficient AUD in my account and they take it out of my CMA. Thanks for the heads-up.

Julian, honesty is good, thanks for the clarification on FX rates.

Brut, my trades are mostly under $10k so $30 is the fee for ASB and $29.95 is the fee for Direct Broking. But i had forgotten about the Direct Broking fee going right up to $30k (versus $10k ASB) so that might become important if I get wealthier (had a slight stumble as I started my learning and buying in the dying months of the 2007 boom and thought those conditions were 'normal')

ToBo
I am finding this thread very helpful. Thanks to all.

[tobo]

...
...Aussie trades through an ASB AUD account can trade instantly but not
NZ ones so you could daytrade Aus stocks but at min $30
each trade.
George

Oh, so THAT'S whats going on.
Most of my (ASB) trades are Ausi. Some NZX.
I have noticed that mostly my trades are immediate but occaissionally up to 3-5minutes delayed.
It had not occurred to me to watch if it was the NZ ones that were slower.
Yesturday I bought CUE on ASX at a limit price. The time it took to refresh the webpage (on fast broadband*) from placing the order to looking at the depth...and my trade had already gone through. (I thought at the time "no human must have been involved, that transaction must have been computerised".)
Obviously buy is different from sell (as they must make sure you are not selling something you don't own. Can't have any accidental short-selling stuff can we?)

* yeah, I know, there's no such thing as fast broadband in NZ. I did it from work in Auckland CBD, we have fastest connection I have seen in NZ. Much faster than my home broadband, which itself is supposed to be Vodafone's premium "Red" network.

ToBo

[POSSUM THE CAT]

Tobo I have Australian bank accounts and to transfer money to NZ I transfer to Macquarie Cash management account with Direct Broking and get DB to pay it into my NZ accounts This way I get wholesale exchange rates. Rather than retail exchange rates and do not have to pay a bank fee at each end of the transaction. Also if you place an ASX order with Direct Broking with settlement in NZ dollars the order screen gives you the estimated price in NZ dollars and you can cancel if you do not like it. Are ASB giving you wholesale or retail exchange rates? You can get the current Mid Point Exchange rate off DB's Web site without being a client compare it with what ASB are Quoting you.

[tobo]

Possum,
I did a test and found I was getting an exchange rate three-quarters of a percent on the mid-point rate wholesale rate.
That was exchanging from NZD CMA (ASB) to ASB AUD bank account.

Now,
regarding your method,
say you already have a balance in your AUD account, and you just want to use that to buy on ASX, (and no conversion to NZD is wanted) what do you do? I presume the CMA you have with DB is a NZD account.

[POSSUM THE CAT]

Tabo I have a Direct Broking Call account run through Perpetual Trustees for NZ $ trading and A Macquarie Cash Management Account for A$ trading set up through Direct Broking I specify the settlement currency on the online order form & Direct Broking work from there. The Macquarie account has an A$ cheque book if you want it and an A$ B/PAY facility that allows you to pay for most Australian rights issues up to the night before the closing date by direct transfer. This saves the hassle of sending cheques many days before & possibly being delayed or lost & you can change your mind or decide much later. If you want more Phone Me if you have lost the Number private message me