You may have relatives or friends who trade the markets. They could be trading shares, futures, options or forex. You may have heard of their exciting trading stories and perhaps this aroused your curiosity and you wondered whether you should trade too. One of the first questions you ask before you trade would be: what are the costs of trading.

The costs of trading depend on several factors, including the instrument and market you are trading. Most of the costs you pay are to your brokerage firm. They need to make a living in exchange for the services they provide.

Generally, you would expect to incur the following costs:

 Commissions

 Slippage

 Spread

 Platform Fees

 Expenses

Commissions