How much should stocks be sold for to avoid losing money? Master these cost details to make your investment worthwhile

Investors’ Most Concerned Question: When Is the Right Time to Take Profits?

Many novice investors make the mistake of deciding to sell based solely on stock price fluctuations. However, in reality, stocks must rise enough to cover all transaction costs before truly generating profit. For example, with Master Kong, assuming you buy 1 lot of stock at 200 yuan, and the round-trip transaction costs amount to 942 yuan, if your gains do not reach this amount, no matter how impressive the increase, you’re effectively losing money.

This is why understanding the calculation logic of stock trading fees is crucial.

Complete Composition of Taiwan Stock Trading Costs

Trading stocks in Taiwan involves two main expense items: Brokerage Fees and Transaction Tax.

When buying, only brokerage fees are paid, calculated as: Transaction Amount × 0.1425% × Broker Discount. Most Taiwanese brokers offer discounts ranging from 50% to 80%.

When selling, both brokerage fees and transaction tax are paid, with the tax rate at 0.30%. This means that the cost of selling one lot of stock is nearly four times the cost of buying.

For example, with a 200 yuan stock, 1 lot (1000 shares), and a 60% discount:

• Buying fee: 171 yuan
• Selling fee: 171 yuan
• Transaction tax: 600 yuan
• Total round-trip cost: 942 yuan

This figure tells us that the stock must increase by more than 0.47% to avoid losing money.

Broker Selection Directly Affects Actual Payment

Taiwan has dozens of brokers, with fee discounts ranging from 16.8% to 60%. This is not a minor difference—performing the same transaction through different brokers can double the costs.

Major brokers like Fubon, Yuanta, E.SUN, and UnionPay offer minimum fractional share trading fees as low as 1 yuan, but the promotional discounts for electronic orders vary significantly. E.SUN’s 20% discount is the most competitive in the industry, meaning that trading through E.SUN can be considerably cheaper than other brokers.

The number of physical branches is also worth considering, especially for investors accustomed to in-person service.

Cost Structure of US Stock Trading Is More Complex

Investing in US stocks from Taiwan can be done via two channels. The first is through domestic brokers’ cross-trading services, with fees ranging from 0.25% to 1%, but with minimum per-transaction fees (usually $35 to $50). This can significantly increase the cost ratio for small trades.

The second is opening an account directly with overseas brokers, many of which have eliminated stock trading fees but require deposit and withdrawal costs (around $30). For long-term investors, this is often more cost-effective because only one deposit/withdrawal is needed.

It’s important to note that if engaging in intraday or short-term trading, traditional US stock trading methods are not cost-effective. In such cases, CFD (Contract for Difference) platforms are more economical, as they only charge spreads and overnight fees, with no transaction tax or commission.

Practical Calculation of How Much Stocks Must Rise to Avoid Loss

The correct approach is to sum all buy and sell costs and set this as the minimum profit target for taking profits.

For example, if a Taiwanese stock is bought at 100,000 yuan with round-trip costs of 1,200 yuan, then to break even, the sale must be at least 101,200 yuan. This corresponds to a gain of about 1.2%.

For US stocks, all costs—brokerage, system service fees, remittance fees, etc.—must be accumulated. When using cross-trading, pay extra attention to each broker’s minimum fee requirements—ranging from $35 to $50—since small trades will have a high cost ratio.

Four Major Factors Affecting Brokerage Fees

Different Trading Markets: The fee structures of Taiwan stocks, US stocks, and Hong Kong stocks are entirely different; Taiwan stocks have transaction tax, but US stocks do not.

Broker Policies: The same trade can cost several times more depending on the broker. Active comparison is necessary.

Trade Volume: Small trades are significantly affected by minimum fee restrictions, increasing the cost ratio. Large trades tend to be relatively cheaper.

Trading Frequency: Every buy and sell incurs double fees. High-frequency traders face much higher fee burdens than long-term holders.

Choosing the Right Trading Method to Truly Save Costs

Long-term investors should open accounts with overseas brokers to buy US stocks, as this offers the best cost-performance ratio. Short-term traders can consider CFD platforms to avoid complex fee structures, only needing to compare spreads. For Taiwan stock investors, selecting a broker with the best discount based on their trading frequency can directly reduce overall costs.

Finally, the key advice is: Before placing an order, always calculate the full round-trip costs as your true profit target, rather than being misled by surface-level gains. Only then can every trade be genuinely profitable.