How Do Zero Commission Brokers Make Money?

While they don’t charge commissions, zero-commission brokers generate revenue through:

• Payment for Order Flow (PFOF): Selling trade orders to market makers for execution.
• Interest on Cash Balances: Earning interest on uninvested cash in customer accounts.
• Securities Lending: Lending out shares held by customers to short sellers.
• Premium Services: Charging for advanced trading tools, margin trading, and research.
• Spread Markups: Slightly widening the bid-ask spread on specific trades.