How do E-Trade and Scottrade commisions work?

Question

All trading sites say something like $9.99 per trade but what do they mean? If i sell 20 shares of company A, does that mean i have to pay the $9.99 trade fee 20 times? Or does me selling my 20 shares at one time count as 1 trade? Im 18 and im going to school to get my MBA, and want to start my trading career now and learn the In's and outs of the market. Im looking to start my account with the $1,000 i got for my graduation party. i just didnt want to go in blind and lose all of my money on commisions.

Answer 1

It's per-transaction.

If you buy 20 shares of company A in a single transaction, the total fee is $9.99.   If you sell 20 shares of company A in a single transaction, the total fee is $9.99.  

If you buy 10 shares of company A in the morning, and 10 in the afternoon, that's 2 transactions and would be a total of $19.98 commission.  If you buy 20 shares of company A in the morning, and sell 20 in the afternoon, that's 2 transactions and would be a total of $19.98 commission.  Or, if you buy 10 shares of company A and 10 shares of company B, that's 2 transactions and would be a total of $19.98 commission.  (This is why it's difficult for someone with only $1,000 to diversify into a lot of different stocks -- commissions on small volumes of shares will eat into your returns.)

Answer 2

Some firms charge by the trade other by the order.

E-Trade & Scottrade will charge, as advertised, 9.99 per trade.

A 20 share order is only 1 order and will be done as one trade, and you will be charged one commission.

Before you start trading, it would be in your best interest to understand what you're doing, why you're doing it and how to do it,

Answer 3

That's their fee, how do think they make their money?

Answer 4

For Scottrade it's $7.00 a trade whether it's 1 share or 1000 shares.

Answer 5

I guess a commision is a thing you have to pay your broker when you do a trade