Table of contents:
- 1 Fees & Spreads at Lynx at a glance
Fees & Spreads at Lynx at a glance
A key element in any broker comparison, which is designed to help you as a trader find the right Forex broker for you, are the costs and fees associated with trading. On the one hand, it is of course important and sensible to take a close look at the trading platform, customer service and other services offered by the broker. Especially for traders who trade relatively often or with high volumes, costs are of course an extremely important factor. There are different fees, which are charged for one or the other service depending on the broker. With the Lynx broker, for example, it is necessary to differentiate exactly which financial instruments are traded in detail. Lynx, for example, offers trading in shares, bonds and funds, as well as currency pairs and CFDs, and is therefore ideally positioned in terms of its range of services.
The usual costs for securities, foreign exchange and CFD trading
Brokers such as Lynx are not very numerous on the market yet, because usually a broker either offers trading in securities or specializes in trading currency pairs and CFDs. Therefore, the market often differentiates between securities brokers, CFD brokers and forex brokers.
Lynx Broker is somewhat different, as customers can trade stocks and other securities as well as CFDs and forex pairs. This example shows very clearly the different types of costs that can be incurred by different brokers.
Usually, the following types of fees and costs can be incurred depending on the broker and trading product:
- Custody account fees
- Transaction costs or order fees
- Financing costs
- Fees for additional services
With CFD and Forex brokers, for example, there are usually two types of costs to consider, namely the spread and the financing costs. Alternatively to the spread, some brokers also charge commissions or there is a mixture of spread and commission. As you can already see from this, it is extremely important to look at each individual broker and the cost types in detail. For example, many securities brokers do not charge custody fees, but of course order fees are a cost factor in trading.
Costs for trading in shares, options and futures at the broker Lynx
As mentioned in the introduction, the broker Lynx is one of the few providers that in principle offers almost all financial products that can be traded today. The offer ranges from shares to foreign exchange, so that you can trade the following financial products through Lynx, for example:
- Foreign exchange
In terms of costs, we would like to start by looking at the financial products equities, options and futures. It is important to mention that there are no custody account fees with the broker Lynx. The opening of the securities account and the safekeeping of the securities as well as the entire custody account management are therefore free of charge for the trader and investor. The fees begin when a trade order is placed. If, for example, you decide to buy or sell shares or ETFs via XETRA, the costs amount to 0.14 percent of the traded transaction volume. However, a minimum fee of 5.80 euros must be observed, while a maximum of 99 euros per order is charged.
With the broker Lynx, as with many providers in this field, the order costs for shares, options and futures are often even lower on foreign exchanges. This is evident, for example, if you trade shares on a US stock exchange. In this case, the broker Lynx has a fee of only $0.01 per share up to a turnover of 2,000 shares, with a minimum fee of only $5. Due to this fact the broker Lynx is in our opinion also one of the cheapest providers in the field of trading of shares, options and futures, as shares can be traded on XETRA from as little as 5.80 Euros. The costs for options and futures are even much lower, as these derivatives can be traded at a price of two euros per contract.
Fees for warrants and certificates
In addition to shares and many other financial products, you can also trade warrants and certificates via the broker Lynx. Naturally, there are also costs involved, which, for example, for warrants and certificates traded in the currency of the Euro, amount to 0.2 percent of the transaction value.
However, a minimum fee of eight euros must be observed, so that trading warrants and certificates as a whole may even be somewhat more expensive than trading shares in some cases. Nevertheless, in our opinion, the fees charged by the broker Lynx for trading in warrants and certificates are quite reasonable.
Forex trading at Lynx: spreads and commissions as cost factors
In the case of the broker Lynx, the costs of currency trading are divided into spreads and commissions.
Spreads are particularly favourable in the ECN area, where they start at as little as 0.50 pips for practically all frequently traded currency pairs.
This is especially true for the following currency pairs:
- EUR / USD
- USD / JPN
- GBP / USD
- AUD / USD
- USD / CHF
As the broker Lynx has opted for a mix of spreads and commissions as fee factors in this area, commissions are also incurred when trading the respective currency. In the case of the euro, for example, these are 0.4 basis points multiplied by the respective transaction volume. However, there is also a minimum fee to be observed here, which in this case is four euros. Trading with the other main currency pairs is similar in terms of costs, so that, for example, Swiss francs are also subject to a commission of 0.4 basis points multiplied by the transaction volume, although a minimum fee of four francs must be observed here.
The costs of CFD trading
The third large trading area that the broker Lynx makes available, besides securities or derivatives and foreign exchange, are the various CFDs. For example, you can trade stock, index and commodity CFDs via Lynx. For example, if you have chosen to trade equity CFDs, a fee of 0.1 percent of the trade value is payable if the equity CFD is traded in the currency Euro. The minimum fee in this area is 5.80 Euros.
If you are more interested in index CFDs than in stock CFDs, these corresponding commissions can also be viewed clearly on the broker’s website under the heading Price Performance Specification. For example, for an Index-tracking CFD based on the DAX, a commission of 0.01 percent is charged, with a minimum fee of three euros. The commissions are similar for the other major stock indices, such as the S&P 500 or the Nikkei index.
We do not want to ignore the financing costs that the broker Lynx charges for a long position held overnight. The basis for the calculation is the benchmark of the EONIA. Currently, for example, the financing costs are calculated at a debit interest rate of only 2.153 percent for equity CFDs traded in euros. This interest rate results from the EONIA (29 March 2016) of -0.347 percent, which is added with 2.5 percent. Thus, financing via the broker Lynx is currently relatively cheap for traders, as is the case with many other brokers.
Further costs with the Broker Lynx
Since we would like to give you as complete an overview as possible of the costs that can be incurred by the broker Lynx, we would like to go into additional types of costs. First of all, it should be noted that deposits by bank transfer are completely free of charge, but this only applies to withdrawals provided that you make no more than one withdrawal per month from your trading account. However, from the second withdrawal per month onwards, there will be charges depending on the currency in which you make the withdrawal. For more information on deposits & withdrawals at Lynx, please refer to another of our guides.
There is also another very common cost factor which is the fee for changing or cancelling orders. In the case of stock CFDs, all changes and cancellations are actually free of charge. However, this does not apply to shares (Europe) and options as well as futures in euros, where a fee of 0.50 euros is charged per change or deletion of an order.
Conclusion on the costs at broker Lynx
All in all, there are relatively many types of costs that have to be considered by the broker Lynx. However, this is mainly due to the fact that you can trade almost all financial products via Lynx, from shares to derivatives, CFDs and foreign exchange. This means that the typical cost factors that arise when trading in foreign exchange, for example, are spreads and commission. In general, overnight positions are subject to financing costs, which are currently relatively cheap due to the low EONIA interest rate. The management of the securities account is completely free of charge with the broker Lynx, and trading in shares and other securities is possible from an order fee of just 5.80 euros. All in all, we consider Lynx to be a rather cheap broker, which is certainly the decisive argument for many traders to choose this provider.