So - who's going to be the first to announce negative commissions?

From TDAmeritrade Regulatory Fees:

"Section 31" Fee: $0.0000207 per $1.00 of transaction proceeds

Trading Activity Fee: $0.000119 per equity share


Sell 5000 shares of $20 stock Fees are $2.07 + .60 = $2.67
 
jeb9999 said:
From TDAmeritrade Regulatory Fees:

"Section 31" Fee: $0.0000207 per $1.00 of transaction proceeds

Trading Activity Fee: $0.000119 per equity share


Sell 5000 shares of $20 stock Fees are $2.07 + .60 = $2.67
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The death of trading as we know it,

 
terr said:
I see that for a $10K trade the brokers get maybe $2-$2.5 in order flow payments. I am not sure if this is for market orders only or for limit orders as well. Traditional order flow payments were for market orders only, but AFAIU it is done for limit orders nowadays as well.

So - if they don't mind cannibalizing their businesses completely, online brokerages can "race below the bottom" now. Ameritrade offers $0.2 payment per 10K order. E*Trade responds with $0.5. Schwab goes whole hog for $1. And so it goes...
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Where do you see "that for a $10K trade the brokers get maybe $2-$2.5 in order flow payments" ?

From TDAmeritrade SEC 606 report they get paid $0.0015 per share, That is $0.75 for 500 shares at $20.

Payment for order flow has been for both limit and market orders for at least 20 years.
 
Overnight said:
That's not up to the broker. That would be up to the exchange. So if the exchange charges no fees, then how will they ever stay in business, to pay for their cost of doing business? Hehe. What are we talking here...Medicare for traders? Good grief.

(But even Medicare is paid for by someone.)

Oooh! An exchange tax in everyone's paycheck stub! Whether you trade or not, you pay for the exchanges to do business! Like how even if you never claim Medicare benefits, you still pay into that system!
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most of the brokers offering zero commission sell there flow to wholesalers. so they could pass some of the money to clients; then you have negative commissions
 
2rosy said:
most of the brokers offering zero commission sell there flow to wholesalers. so they could pass some of the money to clients; then you have negative commissions
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I was speaking about the exchanges, not brokers. Exchange fees.
 
Let’s note that Robinhood doesn’t charge any exchange fees, regulatory fees are unnoticeable (https://support.robinhood.com/hc/en-us/articles/360001226846-Trading-Fees-on-Robinhood), while also charging zero commissions for option trades (vs $0.65 still charged by other brokers).
Does this mean they may be swallowing some costs and therefore pretty much charging negative commissions? And I didn’t see any info about them being unprofitable either, or to what extent.
Btw, not sure if IB Lite charges for trading options. (?)
 
For people who trade real money Regulatory Fees are very noticeable.

"Section 31" Fee: $0.0000207 per $1.00 of transaction proceeds

Trading Activity Fee: $0.000119 per equity share


Sell 5000 shares of $20 stock Fees are $2.07 + .60 = $2.67

Sell 50000 shares of $20 stock Fees are $20.70 + 5.95 = $26.65
 
jeb9999 said:
Where do you see "that for a $10K trade the brokers get maybe $2-$2.5 in order flow payments" ?

From TDAmeritrade SEC 606 report they get paid $0.0015 per share, That is $0.75 for 500 shares at $20.

Payment for order flow has been for both limit and market orders for at least 20 years.
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I don't know what TDA gets. This is from Robinhood:

https://blog.robinhood.com/news/2018/10/12/a-letter-from-robinhood-co-founder-amp-co-ceo-vlad-tenev

"Robinhood earns ~$0.00026 in rebates per dollar traded.". That's $2.6 for $10K traded.
 
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