The price of trading stocks
Nothing is free in the financial world — including buying and selling stocks. Brokerage commission is simply the trading fee you pay to the broker (the bank or online broker) for executing a trade on your behalf.
Think of it as a commission. The broker connects you to the exchange, executes the trade and charges for the service. That is brokerage.
"The one who does not know the price of their choices always pays more than necessary."
— Florence Scovel Shinn
How to minimize brokerage costs
Trade less often
Buy and hold — do not constantly buy and sell. Long-term investors pay much less in brokerage than active traders.
Trade larger amounts
When you trade for large amounts, brokerage becomes a smaller percentage of the total. Trading for 100,000 NOK and paying 50 NOK is 0.05% — trading for 1,000 NOK is 5%!
Choose a cheap broker
Compare brokerage rates between brokers. Nordnet is known for low rates in Norway. Some online brokers also offer free trades up to a certain number per month.
Use index funds
Many index funds have no brokerage — you only pay the annual management fee. For regular saving this is often cheaper than buying individual stocks.
"The wise count all costs before taking the step. The unwise discover them only when looking back."
— Florence Scovel Shinn