Discretionary Trading vs Overseas Brokers: A Complete Analysis of US Stock Investment Costs in 2025 | How to Calculate US Stock Transaction Fees to Save Money?

Looking to invest in US stocks from Taiwan? Choosing the wrong trading method could cost you 2 to 3 times more in fees. This article provides an in-depth analysis of the fee structures for both the cross-brokerage (複委託) and overseas broker accounts, helping you find the most cost-effective investment path.

Two Ways for Taiwanese Investors to Trade US Stocks

Cross-Brokerage (複委託): Using Domestic Brokers

Cross-brokerage, officially called “Trust Business for Buying and Selling Foreign Securities,” simply means opening an account with a domestic broker who then places orders on your behalf to buy US stocks. Since the order goes through two delegation processes, it’s called “cross-brokerage.”

Advantages of this method:

• Use New Taiwan Dollars (NTD) throughout, no need to exchange USD yourself
• Trade with a local account, avoiding the hassle of overseas account setup
• Regulated by Taiwan’s Financial Supervisory Commission, with legal protection for your funds

Clear disadvantages:

• An extra layer in the process, leading to higher US stock trading fees
• Usually charges 0.15%~1% per transaction, with minimum fees
• No margin trading allowed

Overseas Brokers: Direct US Trading

Skip domestic brokers and place orders directly with overseas brokers, similar to how Taiwanese investors trade Taiwan stocks through local brokers. You need to exchange NTD to USD yourself and transfer funds overseas.

Advantages:

• Most brokers have eliminated commissions, some even offer zero-commission US stock trading
• Fast transaction speeds, supporting real-time execution
• Wide selection of investment options

Disadvantages:

• You must handle currency exchange and remittance yourself
• Possible additional withdrawal fees

What Do Cross-Brokerage US Stock Fees Include?

When trading US stocks via cross-brokerage, costs are divided into Direct Fees and Hidden Fees.

Direct Fees

Trading commissions are the main cost, usually between 0.25%~1%, but varies by broker. More frustratingly, almost all brokers set a minimum fee per order, typically between $25 and $100 USD.

For example, buying $1,000 worth of US stocks at a 0.3% fee would cost $3. But if the broker’s minimum fee is $25, you actually pay 2.5%, which is 8 times higher!

Other service fees like remittance charges and account management fees are usually negligible, depending on each broker’s policies.

Hidden Fees: Third-Party Regulatory Charges

Exchange fees are charged by the US Securities and Exchange Commission (SEC), only when selling, at a rate of 0.00051%. This fee is usually integrated into the broker’s fee and not itemized separately.

Transaction Activity Fee (TAF) is charged by FINRA, also only on sell orders, at $0.000119 per share, with a minimum of $0.01 and a maximum of $5.95.

Additionally, if you buy dividend-paying stocks, a 30% withholding tax on cash dividends applies regardless of the method used, which can be reclaimed later through tax refund procedures.

Breakdown of Costs for Overseas Brokers’ US Stock Trading

Choosing an overseas broker, the main US stock trading costs include: trading commissions, currency exchange fees, remittance fees, and withdrawal fees.

Trading commissions: Most mainstream brokers now offer zero commissions.

Currency exchange fees: When converting NTD to USD at a bank, a fee of about 0.05% of the exchanged amount is charged, with minimum and maximum limits (usually NT$100~NT$600).

Remittance fees: Transferring funds from Taiwan to an overseas broker account via bank wire costs NT$100~NT$900.

Withdrawal fees: Some brokers charge an additional US$10~US$35 when withdrawing funds.

Third-party exchange and transaction activity fees are similar to those in cross-brokerage and will incur additional costs.

Actual Cost Comparison: How Do Major Brokers Charge?

Main cross-brokerage fee table

Main overseas broker fee table

Bank currency exchange and remittance fee table (NT$)

Cost Comparison: Cross-Brokerage vs Overseas Brokers

Using the lowest-cost institutions as benchmarks:

• Cross-brokerage with Fubon Securities: 0.25% commission, no minimum fee
• Overseas broker with zero commission: 0 commission
• Currency exchange via Bank of Taiwan: 0.05% fee, NT$100 minimum, NT$200 telegraph fee

Sample cost calculation (Exchange rate 1:30)

Key insight: When investing more than US$6,000 in a single transaction, overseas brokers tend to be cheaper.

However, this assumes only one transaction. What if you are a short-term, frequent trader?

Suppose you buy and sell US$10,000 four times (2 buys, 2 sells):

• Cross-brokerage cost: $25 ×4 = $100 (since each transaction incurs a fee)
• Overseas broker cost: US$11.67 (one remittance fee, subsequent trades are commission-free)

In this scenario, overseas brokers become clearly more advantageous.

How to Choose the Most Cost-Effective Method?

Based on your actual trading volume, consider the following strategies:

Small capital and infrequent trading → Cross-brokerage is more economical, as the fixed remittance and exchange fees are amortized over fewer trades.

Large capital or frequent trading → Overseas brokers save money, as the zero-commission advantage becomes more significant with more trades.

Need frequent deposits and withdrawals → Cross-brokerage is more convenient, since withdrawal fees at overseas brokers can add up.

Summary of Key Points

Cross-brokerage trading is suitable for beginners and conservative investors, with simple account setup and direct NTD trading. However, the fees are relatively high, especially if you trade small amounts or frequently.

Overseas brokers are better suited for investors with large funds and frequent trading. Although you need to handle currency exchange and remittance, the zero-commission structure offers long-term savings. Regardless of the method chosen, remember to consider hidden costs like dividend withholding taxes and third-party fees to accurately assess the true cost of US stock trading.