How are US stock trading fees calculated in 2025? Proprietary trading vs. overseas brokers, how should small investors choose

If you want to trade US stocks in Taiwan, choosing the wrong method can eat up your profits just in commissions. Today, I’ll break down the costs of the two main ways to invest in US stocks.

These are the two paths for US stock trading

In Taiwan, the main ways to play US stocks are through either a securities firm via a local broker or an overseas broker.

What is a local broker? Simply put, it’s when you entrust a domestic securities firm to buy US stocks for you. Investors open an account with a local broker, and the order goes through the domestic broker to the overseas market. Since the process involves two steps, it’s called “dual agency” or “dual entrustment.” The advantage is that you place orders in New Taiwan Dollars (NTD), and the domestic broker automatically handles currency exchange, protected by Taiwan’s financial regulators, with local channels for dispute resolution. The downside is that the commission fee ranges from 0.15% to 1%, due to the complex process.

How about overseas brokers? You open a US stock account directly with an overseas broker, skipping the domestic broker and placing orders directly. It’s like opening a stock account in the US to buy US stocks yourself, similar to buying Taiwanese stocks through a local broker. Currently, most overseas brokers offer zero or very low commissions, which is friendly for frequent traders. But the downside is you need to handle currency exchange into USD yourself, which can be more complicated.

What costs are included in US stock trading fees

Using dual agency trading, your costs are divided into two parts:

Part 1: Direct broker charges

• Trading commission: Usually 0.25% to 1% of the transaction amount, varies by broker. But there’s a catch—almost all brokers set a minimum fee, typically $25 to $100 USD. For example: buying $1,000 worth of stock, at 0.3% you’d pay $3, but if the minimum is $25, your actual cost becomes 2.5%.
• Other miscellaneous fees: Wire transfer fees, account inactivity fees, etc. (depending on each broker’s policies)

Part 2: Hidden costs

• Exchange fee: Collected by the US Securities and Exchange Commission (SEC), only charged when selling, at a rate of 0.00051%
• Transaction activity fee (TAF): Collected by the US Financial Industry Regulatory Authority (FINRA), also only on sell, at $0.000119 per share, with a minimum of $0.01 and a maximum of $5.95

These hidden fees are usually integrated into the broker’s overall fee, so you might not see them directly, but they are there.

When trading with overseas brokers, costs include:

• Commission: Most mainstream brokers now offer zero commissions
• Currency exchange fee: Charged by banks, usually 0.05% of the exchanged amount, but watch out for minimum fees
• Remittance fee: Bank charges for transferring money from Taiwan to the overseas broker, ranging from NT$100 to NT$900
• Withdrawal fee: Some brokers charge $10 to $35 USD when withdrawing funds
• Financing interest: Only charged if you buy stocks on margin

Major dual agency broker fee comparison

Overseas broker fee comparison

Bank currency exchange and remittance fee table

Let’s do the math: dual agency vs. overseas broker, which is cheaper?

Assuming the cheapest options:

• Dual agency with Fubon (0.25% fee rate, no minimum
• Overseas broker Mitrade )0 commission
• Currency exchange via Bank of Taiwan (0.05% rate
• Exchange rate 1:30

From this table, you can see: for amounts over $6,000, using an overseas broker becomes cheaper. But it also depends on your trading frequency.

If you trade $10,000 four times (buy and sell twice), dual agency would charge $100 in commissions ($25×4), while the overseas broker, with zero commission, only incurs the one-time currency exchange and remittance fees, totaling about $11.67. The difference is huge.

How to choose? Here’s a decision tree

Small capital + infrequent trading → Dual agency is more cost-effective, placing orders in NTD directly without worrying about currency exchange

Large capital + frequent trading → Overseas brokers save more money; a one-time exchange fee spread over multiple trades makes it worthwhile

Need frequent access to funds → Dual agency is convenient, allowing direct NTD deposits and withdrawals without currency conversion

Want margin trading → Must go with overseas brokers; dual agency cannot provide margin or short selling

Finally, a reminder: if the stocks you buy pay dividends, regardless of the method, a 30% withholding tax on cash dividends applies—this cannot be avoided.

So, choosing the right trading method is sometimes more important than picking the right stock. Don’t let high commissions eat up your entire year’s gains.