Orders and trading · updated October 21, 2026
What fees do you pay a broker when you invest
A trading commission is what you pay your broker every time you buy or sell. On top of it there can be custody, currency exchange, withdrawal or inactivity fees.
Trading commission formula
- Trading commission
- Fixed (say $5), a percentage (say 0.2%) or with a minimum.
- Custody fee
- For holding your shares, usually yearly.
- Currency exchange
- The gap between the broker's rate and the real rate, on stocks in another currency.
Worked example
You invest $1,000. The broker charges 0.2%, with a minimum of $10 per trade, on both the buy and the sell.
The stock has to rise 2% just for you to break even. On $10,000, the same broker would cost you 0.4%.
How to read trading commission
On small amounts, the minimum commission matters most. For monthly investing, pick a broker with no minimum or with free investment plans.
When trading commission can fool you
Hidden costs: the spread and currency exchange do not show up as a "commission", but you pay them. Inactivity fees: some brokers charge you if you do not trade for months. Withdrawals: check whether taking your money out is free.
Related terms
Learn it in the Academy
Questions about trading commission
What does "zero commission" mean?
That you do not pay a separate fee per trade. The broker earns another way: a wider spread, currency exchange, interest on your uninvested cash, or payment for order flow.
Do fees matter for long-term investing?
Yes, especially with small, frequent amounts. A 2% cost on every monthly purchase eats a lot of the gain over 10 years.
These explanations are for information only. They are not a recommendation to buy or sell.
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