Zero Commission Trading
About Zero Commission Trading
In October 2019, major US brokerages including Charles Schwab, TD Ameritrade, E Trade, and Fidelity eliminated stock trading commissions, following Robinhoods lead. The move was called the end of the trading commission era. Zero commission trading had been pioneered by Robinhood in 2013. The brokerages made money through payment for order flow, selling trades to market makers like Citadel Securities. Zero commissions fueled the meme stock frenzy and retail investing boom of 2020 to 2021. Critics argued payment for order flow created conflicts of interest. The model was banned in the UK but became standard in the US, fundamentally changing the economics of retail investing.
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