IB FREE SCRIBSTION STOCKS FREE
The move to offer free trading is coming partly because Interactive Brokers is seeing some stagnation in its standard brokerage. Will free trading spur Interactive Brokers' growth? There will also be revenue-generating products like international trading, bonds, options, and more exotic products.
Stock exchanges will pay brokerages, or market makers, for providing liquidity so that retail investors have someone to trade with (on the buy- or sell-side).
IB FREE SCRIBSTION STOCKS GENERATOR
This generates revenue and effectively limits how much of a stock can be sold short.Īnother revenue generator for brokers is providing liquidity to exchanges. Investors need to borrow stock in order to sell it short, and if there's a high percentage of shares sold short, brokers can demand to be paid for shorting a stock. Now, it appears the entire industry may be following this trend.īrokers can also charge customers for shorting stocks that are highly shorted. But Interactive Brokers is the first major brokerage to offer a free trading platform and highlights that the industry may have better ways to make money than charging commissions.
Some newer upstart rivals like Robinhood have been offering free online trades on stocks, ETFs, options, and cryptocurrencies for several years now.
The move highlights just how competitive the electronic trading business is and how much investing has changed over the last decade. Incidentally, a few days after IBKR's announcement, national broker Charles Schwab ( SCHW 0.33% ) followed suit, saying it will be ending commissions on U.S. The company just introduced a website called IBKR Lite that will offer customers commission-free trades and permits investing with no minimums or inactivity fees, beginning this month. Interactive Brokers Group ( IBKR -0.18% ) has always been one of the lowest-cost electronic brokers in the industry, and now it's taking that to its logical conclusion.
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