Comment by wil421

Comment by wil421 10 months ago

10 replies

All the major US brokers started doing free trades for stocks and etfs. For Vanguard, most of the index expense ratios are really low, like %.05 percent, but that’s not a trading fee.

AdamN 10 months ago

Even for paid transactions that typically give better pricing (IBKR Pro), the prices are extremely cheap.

4ndrewl 10 months ago

How do they make money from you as a customer?

  • tim333 10 months ago

    Quite a lot of customers either have cash sitting in the account which they make interest on, or have margin debt which they charge for.

    • 4ndrewl 10 months ago

      Interesting, thanks. For a minute I was expecting someone to say "ads"

  • matwood 10 months ago

    You can Google it, but AUM at scale means .03% is a significant amount of money. There's also uninvested cash that the broker can invest in t-bills and take the spread.

    • 4ndrewl 10 months ago

      Thanks for the lmgtfy :)

      I bet the uninvested cash product drives some weird incentives - kpis around increasing ratio of sells to buys and increasing pain around removing cash.

  • jkolio 10 months ago

    Front-running your trade.

    • kortilla 10 months ago

      This is illegal and is absolutely the dumbest way to make money.

    • valkmit 10 months ago

      nice try buddy, that’s ILLEGAL

      • jkolio 9 months ago

        Oh no, I guess someone will be going to jail!

        ...No? Then, uh, a punitive judgment?

        >Small fine that amounts to a cost-of-doing-business.

        Ah. Hm.