How do brokers make money?

Discussion in 'Retail Brokers' started by shark, Mar 19, 2010.

  1. shark

    shark

    Besides the commission and various fees, are there any other ways that brokerage firms profit?

    Thanks.
     
  2. I am sure they do well with snack and juice vending machines!
    Some firms may rent desk space to groups of traders.
     
  3. ajacobson

    ajacobson

    Margin interest. The spread over their cost of money
     

  4. margin interest, interest from all the accounts etc,

    not a money maker but some retail firms will allow you rent server space as well



    Im surpised E-trade is still alive currently.
     
  5. pitz

    pitz

    Proprietary trading against client order flow.

    Data fees.
     
  6. They pick the pockets of the unsuspecting
     
  7. Catoosa

    Catoosa

    In reading the earnings reports of some online brokers, some make as much or more from the difference on the interest (if any) they pay out and receive on the cash balances in clients accounts. Some brokers receive interest from loaning out stock for shorts and not passing the received interest back to their clients. I also think that many brokers receive a big percentage of the fees charged for trading platforms and data. There must be many sources of income other than commissions.