Meaning and Illustration of Trading Unit and Stock Transaction Fee

When you trade stocks, you will be faced with the term "lots". What exactly is the term "lot"? "Lot" is nothing but used to refer to a stock trading unit. It's like using Kilometers (Km) for distance, Kilograms (Kg) for weight and so on. So, the stock trading unit uses lots.

1 lot = 100 shares. This rule is effective since January 6, 2014. The old rule, 1 lot = 500 shares. The purpose of the Indonesia Stock Exchange (IDX) to change the stock trading unit is to make transactions in the stock market more liquid, because by reducing the number of shares, the stock price becomes cheaper, making it easier to trade and reach retail investors.

I think you are familiar with the term lot on the Stock Exchange. Maybe it won't work if I only explain about the term lot in this post. It's good you need to know as a whole how to calculate transactions in buying and selling shares in the capital market.

Before going further, I will explain about stock transaction fees. In carrying out trading transactions on the stock exchange, there are transaction fees that must be paid by investors based on the value per transaction, both buying and selling transactions.

The amount of the transaction fee determined by each securities office is different. In general, the purchase transaction fee is smaller than the selling fee. Generally, the buying fee is usually in the range of 0.15-0.30. While the selling fee is in the range of 0.25-0.40. For trading software from the securities company that I use, the purchase fee is 0.17% and the transaction fee is 0.27%.

If you use online trading facilities, the amount of the transaction fee is much smaller than using a full service broker. Even now, securities offices are competing to provide the smallest possible nominal transaction fee to attract potential customers. If you ask, which securities office has the lowest transaction fee? Honestly I don't know. Please ask yourself to the security office concerned. Also read: Tips for Choosing the Best Securities Company. If you want to find a securities office in your city, please read the post: How and Techniques for Opening a Stock Account. My advice, if you choose a securities office, choose one with a "friendly" fee. Do not choose a fee of up to 0.5%.

So, what is the relationship between lots and stock transaction fees? Of course, both are used to calculate buying and selling transactions. In calculating the amount of capital you have to pay to buy or sell shares, you must take into account the number of lots and the fees you pay.

Please see the illustration of the calculation of buying and selling shares in the table below.

Suppose you buy PWON shares on October 2 at a price of 394. You plan to buy 27 lots. Then the total cost you have to pay is:

394 X 27 lots X 100 pieces = IDR 1,063,800

1,063,800 + ( 1,063,800 * 0.17% purchase fee) = IDR 1,065,608 --> is the total cost you have to pay. Note: The purchase fee that I use is 0.17% which is the purchase fee rule from the securities office I use for trading.

Then on the 5th of October you want to sell your PWON shares at a price of 402 for 27 lots. So the calculation is as follows.

402 X 27 lots X 100 pieces = IDR 1,085,400

1.085400 + (1,085,400 * 0.27 selling fee) = Rp1,082,469 --> is the total cost you have to pay. Note: The selling fee that I use is 0.17% is the purchase fee rules from the securities office that I use to trade.

So the actual value you paid to buy PWON shares was not IDR 1,063,800, but IDR 1,065,608, after adding the purchase fee. Likewise, when you sell PWON shares, the value you receive is not Rp1,085,400, but Rp1,082,469. That's why I advise you to choose a securities office with the smallest possible fee.

Gotou Sakurajima A female trader from Japan who now lives in Jakarta, Sakura loves Forex and Stock Trading since moving to Jakarta and Sakura loves to write articles about Trading.