Full Analysis of US Stock Brokerage Commission Fees | Which Trading Method is More Cost-Effective for Small Investors vs. Large Investors?

For Taiwanese investors, the cost structure of entering the US stock market is often a key factor in decision-making. Is it better to use domestic brokers’ sub-brokerage channels or to open an overseas broker account directly? How big is the difference? This article will analyze the true burden of US stock sub-brokerage fees from a cost perspective.

The choice of trading method determines how much you pay

Basically, there are two ways to trade US stocks in Taiwan, and the hidden fee differences are significant.

What is sub-brokerage?

Sub-brokerage allows you to buy and sell US stocks or ETFs directly through a domestic broker without opening an overseas account. Investors place orders with the domestic broker, which then delegates the order to a US broker. This is called “sub-brokerage.”

The advantage of this method is that all transactions are conducted in New Taiwan Dollars, with the domestic broker automatically handling currency exchange and international settlement complexities. However, because the process is complex, US stock sub-brokerage fees are generally higher, with common charges ranging from 0.15% to 1% of the transaction amount.

What about going directly to an overseas broker?

Skip the domestic broker and place orders directly on an overseas broker platform. This is as simple as buying Taiwanese stocks through a domestic broker, but the underlying assets are US stocks. Major overseas brokers have already achieved zero commissions or very low commissions, making them very friendly to high-frequency traders. The trade-off is that you need to handle currency exchange, remittance, and bear the associated bank fees yourself.

Hidden costs within US stock sub-brokerage fees

When trading US stocks via sub-brokerage, your costs include “direct broker charges” and “hidden costs.”

Direct fees charged by domestic brokers:

Transaction commissions are the core expense. Nominal rates are around 0.25% to 1% of the transaction amount, but there’s a catch—almost all brokers set a minimum fee, usually between US$25 and US$100.

For example, if you buy US$1,000 worth of stocks with a 0.3% fee rate, you’d expect to pay US$3, but if the minimum fee is US$25, you pay that instead, making the effective fee 2.5%! This minimum fee is most damaging for small transactions.

Other service fees vary by broker and may include remittance fees, paper statement fees, inactive account fees, etc.

Invisible but charged costs:

Hidden costs in US stock sub-brokerage come from third-party regulatory fees—exchange fees and transaction activity fees. The SEC charges 0.00051% of the transaction value when you sell stocks. FINRA also charges a Trading Activity Fee (TAF), calculated per share at US$0.000119, with a minimum of US$0.01 and a maximum of US$5.95.

Domestic sub-brokerage brokers generally do not itemize these fees separately; instead, they incorporate them into the overall commission quote.

How do costs differ for overseas brokers?

Overseas brokers have a completely different fee structure, mainly including:

Trading commissions have become a thing of the past, as most mainstream brokers now offer zero commissions. However, some still charge for certain products.

Currency exchange fees are a major factor. When converting TWD to USD, banks charge a currency exchange fee, typically around 0.05% of the exchanged amount. Be aware of minimum fees, usually set between NT$100 and NT$600.

Remittance fees are also not cheap. Sending money from Taiwanese banks to overseas brokers via telegraphic transfer costs NT$100–NT$900 per transaction, depending on the bank.

Withdrawal fees may be charged by some brokers when you withdraw funds, roughly US$10–US$35.

Interest on margin loans only applies if you use margin accounts; not everyone will encounter this.

Third-party exchange fees and transaction activity fees are similar to those in sub-brokerage, and the comparison of US stock sub-brokerage fees includes these parts equally.

Actual fee comparison table of major brokers

Sub-brokerage fee overview:

Overseas broker fee overview:

Bank remittance exchange fee table:

Practical cost comparison: sub-brokerage vs overseas brokers

Let’s see how big the difference is with real numbers. Using the lowest fee combination: sub-brokerage with Fubon Securities (0.25%, no minimum fee), overseas broker Mitrade (zero commission), and remittance via Bank of Taiwan (0.05% fee + NT$200 telegraphic transfer fee).

Assuming an exchange rate of 1:30, calculations are as follows:

From the table, it’s clear that for transaction amounts below US$6,000, sub-brokerage is cheaper; above US$6,000, overseas brokers start to have the advantage.

But there’s a hidden variable—trading frequency. Suppose you trade 4 times (2 buys and 2 sells), with US$10,000 capital in sub-brokerage, you’d pay US$100 in commissions (US$25×4). In contrast, Mitrade, with zero commissions and a one-time remittance fee, totals US$11.67. The result flips.

Which trading method is more cost-effective?

Decide based on your actual situation:

Small capital, infrequent trading: sub-brokerage is more cost-effective. It saves the hassle of currency exchange and remittance, and avoids repeated costs from multiple transactions.

Large capital, frequent trading: overseas brokers are more economical. The advantage of zero commissions is amplified, saving significant fees with each order, accumulating to substantial savings.

Frequent fund deposits/withdrawals: sub-brokerage is cheaper. Each remittance incurs bank fees, and multiple transactions add up. Sub-brokerage avoids this burden.

Long-term dollar-cost averaging, large single investments: overseas brokers are better. The initial remittance cost is amortized over time, and subsequent trades are almost cost-free.

Conclusion

US stock sub-brokerage fees and overseas broker costs each have their pros and cons. There is no absolute “cheapest” solution. The key is to decide based on your trading volume, frequency, and fund flow habits. Sub-brokerage offers convenience and risk mitigation, especially for beginners; but if you’re experienced and trade actively, using overseas brokers directly is more economical. The most important thing is to calculate your actual costs clearly, rather than being misled by a single indicator.