Reading a broker fee schedule

A broker’s fee schedule is the single most important document you will read before opening an account. Every broker has one, every fee schedule is written to be skimmed, and every skimmed schedule hides at least one cost that materially changes the maths.

There are six fee families to look for. Spread (the gap between bid and ask). Commission (a per-trade or per-share fee). Financing (the cost of holding a leveraged position overnight, also called swap or rollover). Inactivity fee (charged after months of no trades). Withdrawal fee (a fixed or percentage charge to take your money out). Currency conversion fee (often the largest hidden cost on multi-currency accounts).

Two of these — financing and currency conversion — are the silent killers for AI bots that hold positions overnight or trade across currencies. A bot showing a 12% annual return at zero cost can become flat or negative once nightly financing of 0.03% per leveraged dollar is included. Always model financing as a continuous drag, not a one-off fee.

A trustworthy broker shows all fees on one page in plain language. A risky one buries them across multiple PDFs, applies them per-account-tier, or expresses them as “up to X%” without specifying the conditions that trigger the maximum. If the only way to know your true cost is to open an account and place a trade, walk away.

A useful exercise before depositing: simulate a single round-trip trade end-to-end. Deposit £100, place a small trade, hold it overnight, close it, withdraw the proceeds. Compare the final number against the original £100. Whatever is missing is the broker’s real all-in cost.