The Real Cost of "Zero Commission" Trading

"Zero commission" is technically true and commonly misleading at the same time. The commission line item genuinely disappears. The cost of running a brokerage doesn't disappear along with it — it just gets folded into a place that's harder to see on a pricing page.

Where the cost actually goes

A broker still has to make money on each trade somehow, and the most common place that cost moves to is the spread itself — the gap between the buy and sell price gets slightly widened, so the cost is baked into every trade automatically rather than itemized as a separate line. It's not hidden in a sinister sense; it's just structured differently, and rarely explained in the marketing that leads with "zero commission."

Spread markup, the most common mechanism

Some brokers offer a genuine choice: a raw, tighter spread plus a separate visible commission per trade, or a wider all-in spread with no separate commission line. Neither is automatically better — the correct comparison is the total cost of a round-trip trade under each structure, not which one has the more appealing headline number.

How to actually compare total cost across brokers

Pick a specific, common trade size on a specific, common instrument, and calculate the actual all-in cost under each broker's real pricing — spread plus any commission plus any other fees — rather than comparing headline commission rates in isolation. That single number, total cost per round-trip trade at your typical size, is the only genuinely fair comparison between brokers.

This isn't automatically a bad thing — the issue is the framing

There's nothing wrong with a spread-only pricing model on its own — plenty of well-run, regulated brokers use it. The issue is specifically when "zero commission" is marketed as if it means "zero cost," because it lets a broker with an actually wider all-in cost look cheaper than one that itemizes its pricing more transparently. Reading past the headline number is the whole fix.