Comment by wil421

Comment by wil421 3 days 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 3 days ago

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

4ndrewl 3 days ago

How do they make money from you as a customer?

  • tim333 3 days 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 3 days ago

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

  • matwood 3 days 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 3 days 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 2 days ago

    Front-running your trade.

    • kortilla 2 days ago

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

    • valkmit 2 days ago

      nice try buddy, that’s ILLEGAL

      • jkolio a day 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.