commission

The broker’s fee for buying or selling securities. Originally, investors were charged a fixed rate for trading. On May 1, 1975, the U.S. Securities and Exchange Commission abolished fixed-rate commissions. This resulted in the rise of discount brokers, which offered low commissions for individual investors willing to do their own research. Over the years, commissions continued to fall. In the mid-2010s, the first commission-free trades appeared. Today, mostly all discount brokers have switched to a model of charging zero commissions for trading stocks and exchange-traded funds (ETFs).