Login

Commissions

As stated earlier, buyers and sellers of stock do not do it directly - they must go through a broker, who gets paid for his or her services.  This fee is called a commission.  The commission is typically a percentage of the total transaction.

Commission rates vary from 0.5% to 2%.  Some brokers charge offer incentives such as the first 10 trades for free.

Drew's bank charges a 1.5% commission.  This means his $10,000 sale will cost him $150 in commissions.

Meghan was luckier.  The online brokerage firm she uses is having a special promotion and she won't have to pay any commissions because her first trade is over $5,000.