All 0.088% of trade value + For Hong Kong, exchange trading fees, exchange trading tariff, CCASS settlement fees, and CCASS custody fees are included. Government stamp duty (0.1% rounded up to the nearest 1.00, applies to stocks only) and SFC transaction levy (0.003%, applies to stocks and warrants) are directly passed through to the customer. = close to 0.2% of trade value ??? that is very high
I think that in the real world outside the U.S., people usually trade a substitute called CFD's to avoid all of the taxes etc. that are levied on actual shares. CFD's are widely available for Hong Kong stocks and have much lower transaction costs and higher leverage. Oh, all of the above does not apply for U.S. traders. The S.E.C does not allow us access to CFD's. So the only thing we can trade are the high-transaction cost actual shares.
The problem with CFD's is that you have significant counter party risk, the firms offering the CFD's need to hedge on the listed market and hence you are often, paying for the exchange costs in the spread and the financing rates on the CFD's from some issuers are a massive hidden cost. In many case kind of like the guys offering "free" commissions on FX trades. Simply put, there is no free lunch.
It's better to just pay the stamp duty and trade on the exchange. If you trade CFD, you need to unwind through the same dealer. That's when they will try to get you. HK maybe slightly different in that I think the market makers are exempt from paying the stamp duty? So they can pass some of that cost saving to you.
MM stamp tax exemption is for hedging option transactions. If someone is making CFD markets and hedging on the HKEX w/o paying stamp they could be setting themselves up for big trouble with inland revenue.
U.S. investors and traders really need access to options on foreign stocks and access to trading foreign stocks on margin, along with access to the foreign stocks themselves. The options are needed so as to be able to hedge underlying stock positions, among other reasons. I am aware that these are U.S. regulatory restrictions that apply to U.S. residents, and as such are beyond the control of IB or other U.S. brokers, but until they are lifted I am very reluctant to trade foreign stocks, including HK ones, through U.S. brokers.