The Pitfalls Behind Zero-Fee Trading

Commissions hit zero at big online brokers, but investors should be aware of other, sometimes hidden costs.

(Image credit: VGAJIC-+38163208618 (VGAJIC-+38163208618 (Photographer) - [None])

After a years-long race among online brokers to slash investor costs to the minimum, in the end it only took a few days for a handful of major firms to cross the proverbial finish line. In October, Charles Schwab announced it would eliminate its $4.95 commission on all online stock, exchange-traded fund and options trades. Within a week, several big-name online brokers rolled out similar commission-free deals, including Ally Invest, E*Trade, Fidelity, TD Ameritrade and Trade­Station. Some trading fees still apply: Options traders at these firms must still pay contract fees, for instance. But those have been lowered in some cases, too.

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Ryan Ermey
Former Associate Editor, Kiplinger's Personal Finance

Ryan joined Kiplinger in the fall of 2013. He wrote and fact-checked stories that appeared in Kiplinger's Personal Finance magazine and on He previously interned for the CBS Evening News investigative team and worked as a copy editor and features columnist at the GW Hatchet. He holds a BA in English and creative writing from George Washington University.