Broker A's platform passed Sam's test in Lesson 15: Day Trading Platforms. Now he prints its fee schedule and reads it with a highlighter. The first line says what the ads said: $0 commission on online US stock trades. He almost stops there.

Then come three more pages. A regulatory fee "on sales only". Market data packages. A charge for wiring money out. MarginMargin is money borrowed from your broker, secured by the cash and securities in your account, that lets you hold a larger position than your own cash would allow. For example, with the standard 50% initial margin, $10,000 of equity can buyRead definition → interest rates by balance. A fee for transferring the account to another broker.

His question is simple: what will one trade actually cost him? This lesson answers it, line by line.

In 30 seconds

  • Brokerage costs are everything you pay to trade: visible fees (commissions, regulatory fees, margin interest, data and account fees) and hidden costs (the Bid-Ask SpreadThe bid-ask spread is the difference between the highest price buyers will pay and the lowest price sellers will accept — it's an immediate, invisible transaction cost on every trade you make.Read definition →, SlippageSlippage is the difference between the price you expected to receive when placing a trade and the actual fill price you got — it occurs because the market moved between when you placed the order and when it was executed, or because you usedRead definition → and how well your orders are filled).
  • Commission-free doesn't mean cost-free. FINRA puts it plainly: "free trading does not mean free investing." Brokers also earn from margin interest, payment for order flow and other fees.
  • Two regulatory fees apply to stock sales: the SEC's Section 31 fee ($20.60 per million dollars sold since April 4, 2026) and FINRA's Trading Activity Fee, which is paused for October 1 to December 31, 2026.
  • For a small account, the spread is usually the biggest cost. On Sam's hypothetical 80-share round trip, a 2-cent spread costs $1.60 while the regulatory fee is about 9 cents.

By the end of this lesson you'll be able to read any broker's fee schedule, know which costs hit a beginner day trader and which don't, and work out what one round-trip trade really costs. If you're still choosing a broker, Lesson 14: Choosing Your First Day Trading Broker shows how fees fit into the bigger checklist.

What are brokerage costs?

Brokerage costs are all the money you give up to buy and sell through a broker, whether it appears on your statement or not. They come in two kinds: explicit costs, which show up as line items, and implicit costs, which show up as a slightly worse price.

Think of a "$0 fare" airline ticket. The fare really is zero, but you still pay airport taxes, a bag fee and a seat fee, and the flight might leave at an awkward hour. The headline price is only one part of what the trip costs you.

Type
Explicit
Examples
Commissions, regulatory fees, margin interest, data and platform fees, wire and transfer fees
Where you see it
Trade confirmations and statements
Type
Implicit
Examples
The bid-ask spread, slippage, execution quality
Where you see it
Only in the price you get

Explicit costs are listed; implicit costs are built into your fills.

Statements show the visible costs; the spread, slippage and execution quality hide in the price you get.

For a beginner placing a few trades a day, the implicit costs are usually bigger than the listed ones. That's why this lesson reads the whole fee schedule and then looks past it.

How do stock trading commissions work?

A commission is the fee a broker charges to place a trade for you. Brokers price it in one of three ways: a flat fee per trade, a fee per share, or zero for online stock trades.

Here's how each works on Sam's planned size of 80 shares (from the 1% rule in Lesson 3), using example rates (your broker's will differ):

Pricing model
Flat fee
Example rate
$4.95 per trade
Cost for 80 shares, one side
$4.95
Round trip
$9.90
Pricing model
Per share
Example rate
$0.005 per share
Cost for 80 shares, one side
$0.40
Round trip
$0.80
Pricing model
Zero commission
Example rate
$0
Cost for 80 shares, one side
$0.00
Round trip
$0.00

Example rates for illustration only.

The pattern matters more than the numbers. A flat fee hits small trades hardest, and per-share pricing grows with your share count, which matters when you trade low-priced stocks in large quantities. Options, if you trade them later, usually carry a per-contract fee even at zero-commission brokers, so check that line separately.

What regulatory fees do you pay when you sell a stock?

When you sell a stock, two small regulatory fees usually apply: the SEC's Section 31 fee and FINRA's Trading Activity Fee (TAF). They're charged on sales only, so buying costs nothing extra here, and brokers commonly pass them on to customers.

Fee
SEC Section 31 fee
How it's calculated
A rate per dollar of stock sold
Rate now (October 2026)
$20.60 per million dollars, since April 4, 2026 (SEC)
Fee
FINRA Trading Activity Fee
How it's calculated
A rate per share sold, with a cap per trade
Rate now (October 2026)
Paused to $0 for trades from October 1 to December 31, 2026 (FINRA)

Both rates change over time, so check the current figure before you rely on it.

The Section 31 rate had been $0.00 before April 4, 2026. The TAF was $0.000195 per share sold for most of 2026, with a maximum of $9.79 per trade (FINRA). FINRA paused it for the last three months of the year because 2026 fee revenue ran above target, and it resumes with January 2027 trades. Whether your broker passes the pause on to you depends on the broker.

For Sam, the math is tiny. Selling 80 shares at $52 is $4,160, and $4,160 × $20.60 ÷ 1,000,000 is about 9 cents. At the earlier 2026 TAF rate, 80 shares would add about 2 cents. These fees won't decide whether you're profitable, but they explain the odd few cents on a "commission-free" sell confirmation.

How do commission-free brokers make money?

Commission-free brokers make money in other ways, including interest on margin loans, payment for order flow, and fees for options and other services. FINRA's investor guide sums it up: "free trading does not mean free investing" (FINRA).

Payment for order flow is when a market maker pays your broker for sending it your orders, perhaps a penny or more per share (Investor.gov). It isn't a fee you see, but it's one reason the commission can be zero.

What matters to you is the price your orders actually get. A 2025 study placed about 85,000 market orders simultaneously through six accounts at five brokers. The average round-trip cost, excluding commissions, went from 0.07% to 0.46% depending on the account, and differences in payment for order flow didn't explain the difference (Schwarz, Barber, Huang, Jorion and Odean). On a $4,160 position, 0.07% to 0.46% works out to roughly $3 to $19 per round trip.

You can't measure your own fills that precisely, but you can look at where your broker sends orders in its 606 report, which Lesson 14 showed you how to find.

Why is the bid-ask spread a cost?

The bid-ask spread is a cost because you usually buy at the higher AskThe ask is the lowest price a seller is currently willing to accept. When you buy with a market order, you pay the ask.Read definition → price and sell at the lower BidThe bid is the highest price a buyer is currently willing to pay. When you sell with a market order, you receive the bid price.Read definition → price, so a stock that doesn't move still leaves you slightly down. You pay the spread once on every round trip.

It works like the airport currency booth. It buys dollars from you at one price and sells them at a higher one. Swap money and swap it straight back, and you've lost the difference without the exchange rate moving at all.

If XYZ shows a bid of $52.00 and an ask of $52.02, buying 80 shares at $52.02 and selling straight back at $52.00 costs 80 × $0.02 = $1.60. That's more than every regulatory fee in this lesson combined. Spreads are narrower in heavily traded stocks and wider in thin ones, which Lesson 34: The Bid-Ask Spread explains in full.

Slippage is the related cost: filling at a worse price than you expected, often with market orders in fast moves. Lesson 44: Slippage covers how to reduce it.

What other fees should you look for on a fee schedule?

Beyond commissions and regulatory fees, a fee schedule usually lists margin interest, market data and platform charges, money transfer fees, and account fees. Most won't touch a beginner in a cash account, but you should know which ones could.

Fee
Margin interest
What it is
Interest on money borrowed in a margin account
Does it affect a beginner day trader?
Only if you trade on margin and hold borrowed money overnight
Fee
Market data and platform fees
What it is
Monthly charges for extra data like Level 2, or a premium platform
Does it affect a beginner day trader?
Only if you add them; basic real-time quotes are often included
Fee
Wire and withdrawal fees
What it is
Charges for moving money out by wire
Does it affect a beginner day trader?
When you withdraw; standard bank transfers are often free
Fee
Account transfer fee
What it is
A charge for moving your account to another broker
Does it affect a beginner day trader?
Only if you switch
Fee
Inactivity or maintenance fees
What it is
Charges for a quiet or small account
Does it affect a beginner day trader?
Check; some brokers have them, many don't
Fee
Options contract fees
What it is
A fee per options contract
Does it affect a beginner day trader?
Only if you trade options

Read each line on your own broker's schedule; amounts vary by firm.

What does one trade really cost Sam?

Every round trip pays the spread, any slippage and fees before it can show a net result.

Sam works out the full cost of one hypothetical round trip at Broker A: buying 80 shares of XYZ at the $52.02 ask and selling at the $52.00 bid, with no price move and no slippage.

Cost
Commission
Amount
$0.00
How it's worked out
Broker A charges $0 for online stock trades (hypothetical)
Cost
Spread
Amount
$1.60
How it's worked out
80 shares × $0.02
Cost
SEC Section 31 fee
Amount
$0.09
How it's worked out
$4,160 sold × $20.60 per million, rounded to the next cent
Cost
FINRA TAF
Amount
$0.00
How it's worked out
Paused until December 31, 2026 (about $0.02 at the earlier 2026 rate)
Cost
Total
Amount
$1.69
How it's worked out
About 2.8% of his $60 risk per trade

Hypothetical example. Real costs depend on the stock's spread, your fills and your broker.

Sam stares at the total. The commission line he was worried about is zero. The cost he never saw on any statement, the spread, is almost all of it.

On his legal pad he writes: "The spread is the fee they don't print. Trade stocks where it's a penny or two."

Lesson 49: The True Cost of Every Trade later adds up these costs across 100 trades.

Reading only the commission line

You're doing it if
You picked a broker because it says $0 commission, you've never opened its full fee schedule, and you trade stocks without checking the spread first.
The fix
Read the whole fee schedule once and mark the lines that apply to you. Before each trade, check the spread on your chart's quote, and work out the round-trip cost of your position size.

Your turn: price one trade (15 minutes)

0 of 6 done

Check your understanding

Check your understanding

On an 80-share round trip in a stock with a $0.02 spread, which cost is usually biggest at a zero-commission broker?

Check your understanding

When do the SEC Section 31 fee and FINRA's Trading Activity Fee apply?

Check your understanding

What does FINRA mean by "free trading does not mean free investing"?

Key takeaways

  • Read the whole fee schedule, not just the commission line, and mark which fees apply to how you trade.
  • Regulatory fees on sales are a few cents for a small trade, and their rates change, so check the current figures.
  • The spread is the cost no statement shows, and it's usually the largest one for a beginner.
  • Execution quality varies between brokers, and you can see where orders go in each broker's 606 report.
  • Work out the round-trip cost of a trade before you place it, and compare it with what you're risking.

Frequently asked questions

Why did my order fill at a different price than the one I saw?
Prices move between the moment you click and the moment your order fills, especially with market orders in fast-moving stocks. That difference is called slippage, and a buy order fills at the ask, which can be above the last trade price you were watching. A limit order caps the price you'll accept, though it may not fill. Lesson 43: Order Types explains when to use each.
Do trading fees affect my taxes?
Yes. Under IRS rules, the cost basis of stock you buy is generally the purchase price plus costs of purchase such as commissions (IRS Publication 551). Your broker's year-end tax forms usually account for this, but keep your own trade records too. Tax rules vary, so check with a tax professional for your situation.
Is payment for order flow legal?
Yes, in the US payment for order flow is legal, and brokers must disclose it. Their quarterly 606 reports show where they route orders and the payment they receive. Your broker still has a duty to seek the best execution reasonably available for your orders.
How do I calculate the cost of a trade quickly?
Add the commission for both sides, the spread (shares × the difference between bid and ask), and any regulatory fees on the sale. The DayTradingToolkit trade fee calculator shows your profit after fees and compares flat-rate and per-share pricing at your trade size.

Up next: should Sam open a cash account or a margin account?

One part of the fee schedule is still bothering Sam: margin interest rates, listed by balance, on money he hasn't decided to borrow. The account form at Broker A asks the same question in a single checkbox. Cash or margin? Lesson 17: Margin vs. Cash Accounts helps him decide.

Disclaimer

This lesson is for education only and isn't financial advice or tax advice. Sam's trade, Broker A's fees and the example commission rates are hypothetical. Regulatory fee rates change, and brokers set their own fees and decide how to pass regulatory fees on, so check your broker's current fee schedule. Spreads and slippage can be much larger in thinly traded or fast-moving stocks. Day trading carries a high risk of loss. Never trade with money you can't afford to lose. Read our full disclaimer.

Article Sources

DayTradingToolkit builds every lesson on primary sources from regulators and peer-reviewed research. These are the ones used here.