#684 - How Can I Buy Stock Without Paying Commission?

The "Daily Call" From Option Alpha

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re answering the question, “How can I buy stock without paying commission?” The first way that you can buy a stock without paying commission is to go with a brokerage that offers no commission for buying stocks. It seems like the most intuitive and easy way to go. Places like Robinhood, there’s also new places including J.P. Morgan launched an application that you can get free commissions up to a certain level. There’s other brokerages that are starting to pop up as well and will inevitably pop up in the coming years that will offer stock trading for free. To me and to everyone else, I’ve said publicly for many months now that I think all brokers at some point are going to be commission-free. I think options, stocks, futures, everything in the future will be commission-free. Now that we’ve had the real big splash of the likes of Robinhood, etcetera, we’re going to start to see this race to the bottom in all brokerages and frankly, it’s good for retail investors like us.

Now, that being said, you can still find commission-free stock purchases and ETF purchases even inside of a broker that might traditionally charge for them. For example, Thinkorswim is really good through TD Ameritrade because they have a list of ETFs which are commission-free. And so, if you trade those ETFs, they don’t charge you a commission for them. They’re more liquid, they’re highly traded, so there’s an incentive to get a lot of people active in those contracts and that’s how they make their money through order flow and through the trading activity, not necessarily charging you a commission for them. Don’t think that if you’re with a broker right now that actually charges commission that there isn’t some other way to trade something that is a reduced commission or in some cases, no commission at all. Again, take a look at it. As always, check with your broker. And hopefully this helps out. If you guys have any other questions, let me know and until next time, happy trading.