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All the major US brokers started doing free trades for stocks and etfs. For Vanguard, most of the index expense ratios are really low, like %.05 percent, but th
by wil421 2y ago
All the major US brokers started doing free trades for stocks and etfs. For Vanguard, most of the index expense ratios are really low, like %.05 percent, but that’s not a trading fee.
- AdamN 2y agoEven for paid transactions that typically give better pricing (IBKR Pro), the prices are extremely cheap.
- 4ndrewl 2y agoHow do they make money from you as a customer?
- matwood 2y agoYou can Google it, but AUM at scale means .03% is a significant amount of money. There's also uninvested cash that the broker can invest in t-bills and take the spread.
- 4ndrewl 2y agoThanks for the lmgtfy :) I bet the uninvested cash product drives some weird incentives - kpis around increasing ratio of sells to buys and increasing pain around removing cash.
- tim333 2y agoQuite a lot of customers either have cash sitting in the account which they make interest on, or have margin debt which they charge for.
- 4ndrewl 2y agoInteresting, thanks. For a minute I was expecting someone to say "ads"
- jkolio 2y agoFront-running your trade.