Cost of Trading ETFs

Discussion in 'ETFs' started by dac8555, Aug 30, 2006.

  1. dac8555


    I am a bit confused as to cost of ETFs. I know they have a small expense ration (say between .1 and .7%)...but is the charge:

    a. annualized
    b. is that what they charge every time i buy and sell
    c. something else.


  2. Surdo


    Your broker will send you a bill for ETF expenses quarterly.
    Don't miss a payment, they do charge interest.
  3. Surdo


    Just kidding, it's built into the NAV/Price of the stock.
    Not something to be concerned with.

  4. dac8555


    surdo..I agree...but i wonder if there is something i am missing. I read a few article where people said "if you trade them too much, they get expensive".

    But the only charges i see are

    If i hold a $100k of aan ETF for one month with a .4% sexpense ration my charge is...

    $400/12=$33+ cost to broker for the trade ($10)=$43 right?

    i dont think there is anything i am missing here?


  5. S2007S


    dac8555 good question

    I was wondering the same thing, all i do is trade ETFs, I have Traded QID, QLD, PHO, MZZ, DXD, SDS, PIV, PSI, PBE, USO etc. I have researched and havent really found anything on it.
  6. Surdo


    You are making this more complicated than it really is!

    All you pay is commission, any management related expenses are BUILT INTO the price of the ETF already.
  7. S2007S


    I would assume the same thing as well. For example the proshares I trade have a pretty high expense ratio of around .75-.95, the one i hold now has an expense ratio of 0.95%.

    $10,000 X .95% = $95/360 = = .26 a day to hold this proshare ETF.
  8. S2007S


    Surdo thanks for the reply. If its built then I have no problem with that. About 75% of my portfolio is ETFs.
  9. Surdo


    BUY low and SELL high, that's all you need to know Bro.
  10. minmike


    I think what they are really trying to say is that if you trade anything to much it can get expensive.
    #10     Aug 30, 2006