Brokers aren’t charities. Even when trading looks “free,” there are ways they get paid. Understanding this helps you be a smarter investor.
Trading fees & commissions
Some brokers charge a small fee per trade or for certain products.
Payment for order flow
Your trade may be routed through firms that pay the broker for it.
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You don’t see the fee
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It helps fund “commission-free” trading
Interest on your cash
Brokers earn interest on uninvested cash in your account and pay you less than they earn.
Margin & lending
If you borrow money to invest (margin) or lend out your shares, the broker earns interest or fees.
Premium features
Advanced tools, data, advice, or managed accounts often come with extra costs.
That doesn’t mean brokers are bad. It just means knowing how they make money helps you choose the right one and avoid surprises.