Zero Commision

Zero commission means a broker does not charge its usual per-trade fee for buying or selling a particular type of security, most commonly stocks and ETFs. It became a standard offering across most major online brokers in the retail market, replacing the flat per-trade fees (often a few dollars a trade) that used to be charged for every order.

The term is narrower than it sounds. "Zero commission" almost never means every single thing a broker touches is free. It usually applies to specific instruments, most often listed stocks and ETFs traded during regular hours. Options, futures, mutual funds, bonds, broker-assisted orders, and some overseas or over-the-counter securities frequently still carry a per-contract or per-trade fee even at a "zero commission" broker.

The nuance that trips people up is that removing the visible commission line does not mean trading is free of cost. Brokers still make money from a trade even when they don't charge for it directly, most notably through payment for order flow (where the broker routes your order to a market maker who pays for it) and through the bid-ask spread you pay when buying or selling. A wider spread or slightly worse execution price can cost more than an old-style commission would have, just in a way that doesn't show up as a line item on your statement.

For a beginner, the practical habit is to always check the fee schedule for the specific instrument you're trading, not just take "zero commission" as a blanket promise. A broker can advertise zero commission on stock trades while still charging for options contracts, wire transfers, inactivity, or data feeds.