Zero commission brokers

Zero commission brokers are online stockbrokers that do not charge commissions for placing trades. This type of broker is typically a discount broker that simply charges lower fees overall. Read why this matters as an investor and how these brokers do make their money.

Broker name TypeReviewRatingBroker site
EtoroInvestorLink4.6Visit broker
CMC markets*Mostly TraderLink4.5Visit broker
NordnetInvestor & TraderLink4.4Visit broker
Plus500*TraderLink4.1Visit broker
Trading212Investor & TraderLink4.1Visit broker
Bux ZeroInvestor & TraderLink4.0Visit broker
Admiral MarketsInvestor & TraderLink4.0Visit broker
KrakenCryptoLink3.8Visit broker
BlackBull*TraderLink3.7Visit broker
Fusion Markets*TraderLink3.5Visit broker

*If you choose a trading broker, please remember: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

The different commission structures brokers have

There are a few different types of commission structures that brokers have. The first is a flat fee. This is a set amount that is charged per trade. The second is a per-share fee. This is a set amount that is charged per share traded.

The third is a percentage fee. This is a percentage of the total trade that is charged as a commission. This is where most brokers actively advertise to be zero commission brokers. Although true in theory, the perception most investors have is that this means no cost at all. This is wrong. It means that costs are potentially lower, depending on your activity.

And the fourth is a spread. This is when the broker takes a small percentage of the trade as their fee. This is almost never free, as it’s a way for brokers to cover their costs & less transparent to the beginning investor/trader.

How do zero commission brokers make their money?

There are a few ways that zero commission brokers make their money. The first is by charging lower fees overall. The second is by making money off of the trades themselves. When a trade is placed, the broker may take a small percentage of the trade as their fee. This is known as the spread. The third way that zero commission brokers make their money is through account fees. This includes fees for things like mutual funds and retirement accounts.

The choice is yours

By choosing a zero commission broker, you may be reducing overall costs compared to ‘tradition brokers’ that haven’t made that change just yet. However, it is no guarantee of saving money. This is why it is important to look at the broker’s pricing pages to understand if the zero commission structure works to your benefit, or not.

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