Stock Broker Commissions

Written by Michael Federico
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High stockbroker commissions can end up making a very successful trade far less lucrative for an investor. Some brokers simply take a percentage of each trade that is made. This percentage is not always set in stone. For instance, if a trade involves under 100 shares of stock, a commission might be a lower percentage than if a trade of over 100 shares is made. The percentage will continue to grow, so a broker's cut is basically increasing exponentially.

Some people are willing to pay high commissions for the assistance of a broker, and it is fair to say that some brokers earn their high commissions. However, a lot of investors are paying a lot of money for mediocre services. In many cases, brokers are not doing anything that an investor couldn't do on his own.

Online Stock Broker Commissions

Trading stocks online is finally gaining some respect in the financial world. For many years, investors who traded online were not taken seriously. People believed that brokers were essential to the success of the investor. However, as more online investors made money on the market and had to pay far less to do so, even some of the strongest critics began to see the benefits of e-trading.

Most online brokers do take commissions, but they are generally incredibly low. Instead of paying a substantial percentage, a person might have to pay $1 on a trade of 100 shares. Also, as online trades get larger, the commission percentage usually gets smaller. If a person trades 750 shares, there is a good chance he will only have to pay $7 or less in commission fees.


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