What are transaction costs?

Transaction costs are commissions and processing fees incurred within a business transaction. In some cases, these transaction costs are a percentage of total sales. In other cases it may be a flat fee. In general, money spent on transaction costs is often referred to as sreding .

transaction costs are very important for anyone who wants to buy or sell any financial product, be it stocks, bonds, currency or valuable metals. It does not matter whether you are buying or selling assets, transaction costs may arise in a number of different situations. It is important to read all the principles and agreements of the company to make a transaction in order to be fully aware of which transaction costs you can incur. Although these may be several different names, the range is the costs that the investment manager charges for the transaction. To provoke an example in the real world, assume a exchange rate of currency is $ 2 dollar (USD) per kAnd 1 eur (EUR). Although someone may expect to receive 5 euros if they pay $ 10, they are likely to receive somewhat less than that.

Why is the trader to be less than the published rate? To disseminate purchase/sales. A person or agency performing a store selects a reduction in order to provide a service. The amount charged for this service is likely to be different depending on a person or company.

Some companies will actually use their transaction costs as a motivation to attract customers. If the investment company has a competitive rate at its transaction costs, this can lead to significant cost savings for the investor, especially if this investor carries out a large number of trades as general practice. Although it is not as prevailing as it once was, several commercial companies spent their transaction costs in online stores.