December 6, 2019

What Zero Commision Fee’s Will Do For The Markets

The $0 commision transition in the brokerage world has been a hot topic in my trading rooms. The idea of not paying commissions on trades has widely been rejoiced by retail clients. However, this could lead to clients getting a false sense of value when they trade. Unless you are heavily active in the markets daily, the residual effect will not be grand for most. By most, I mean the small sized cash accounts that can benefit greatly. I believe the effect for larger accounts won’t make a grand difference in the grand scheme of things. Options trades will still have some sort of fee to pay. You may also see more slippage on pricing when trading. Firms could look to offset the loss of commission’s by increasing other fees as well. The downside in all of this is that it can give a false reason to be more active in the markets. What I mean by value is that clients may think they don’t need to worry about commissions, so let’s just fire away. I just want to kindly remind you that value comes from timing the right opportunity. Just because you can be more active doesn’t mean you should be more active. I highly encourage those who are looking to be more active based on the $0 commision news to reconsider. Care about your money and look for the right opportunities in the markets. Trade with a plan. Trade with a purpose. This is how you start to get an edge on the markets.

about the author:

Charles Moon

Charles Moon is a technical "whiz kid" whose experience lies in scalp/swing trading. A patient educator, Charles excels at coaching/mentoring and can make complex concepts simple. Prior to joining the ranks of Prosper Trading Academy, Charles was a proprietary equities trader with Great Point Capital LLC. Coming from a retail trading background, his experience can help those with no experience trading to seasoned veterans.

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