Ep 76: Zero Commission Trading - Where's the catch?

This week, all major brokerages announced "No Commission Trading". Interactive Brokers started 2 weeks ago, and this week Charles Schwab announced zero commission trading as well. This pressured TD Ameritrade and e-Trade into action, and now they are offering commission-free stock trading, too. But is this a good thing? And where's the catch? How do brokers make money if they don't charge for commissions?
This week, all major brokerages announced "No Commission Trading". Interactive Brokers started 2 weeks ago, and this week Charles Schwab announced zero commission trading as well. This pressured TD Ameritrade and e-Trade into action, and now they are offering commission-free stock trading, too. But is this a good thing? And where's the catch? How do brokers make money if they don't charge for commissions?

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You may lose all or more of your initial investment. The lower the day trade margin, the higher the leverage and riskier the trade. Leverage can
work for you as well as against you; it magnifies gains as well as losses. Past performance is not necessarily indicative of future results.

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