trade without paying commissions the new style?

I saw this ad here and found this site.

http://www.key2options.com/

$100 per month gets you unlimited trading? How does that work?

 

Robinhood offers completely free trading, but they're extremely slim on functions and services.
100$ a month doesn't seem that farfetched. On IB, a roundtrip lot is 1$.

 

It is not truly free - you still have to pay the FINRA-TAF & SEC fees on the sales. Their 606 report shows they route the orders to only HFT's. What you may save in commissions gets eaten up in slippage by the HFTs. Robin Hood preys on the uninformed novices that think they are getting a free lunch. I will still gladly pay up to use a broker with DMA & IEX routes, L2, and advanced order types, deposit sweep, good support, a modern trading platform, etc,

 

Save $5 on commission, pay $50 to HFT.

 

Zero commission for margin accounts is offered by a number of brokers in Japan, Hope it spreads to your country someday.

 

Is that like the fx brokers who don't charge commission but profit from the spread?

 

Well, you're half way there, the "free" providers will ...

- Screw you on the spread
- Send your order round the houses to less desirable places who pay them for order flow

Ask your "free" provider whether they'll route your orders to IEX.

Look up the guy from NANEX (Eric Scott Hunsader) and read his blog/website and twitter posts. That'll tell you all you need to know.

There is no such thing as a free lunch. With reasonably trustworthy places like Interactive Brokers being cheap as chips, why get screwed on your trades to save the extra few pennies ??

 

As Tim Smith points out, "free" brokers will likely cost you in other ways.
http://blog.themistrading.com/2016/01/robin-hood-the-legend-of-internalization/
http://www.nanex.net/aqck2/3519.html

 

The small-print of the "free" brokers can also be quite, erm, "interesting".

See, for example, the following gem from Robinhood :

I further understand that when I send a market buy order through Robinhood Financial’s trading system, the trading system generates a limit order up to 5% above the last trade price, and then Robinhood Financial sends the order to an executing broker.


Now, to be fair to Robinhood, they do appear to allow you to explicitly create limit orders. But its hard not to think about the fact that the sort of people attracted to "free" brokers, will also be the sort of people who have no clue about the basic differences about a market and limit order.

 

Thanks for pointing out the small print. I hadn't not noticed that. I'm going to give the free broker a try but only with a small account and see what happens.