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Everything you need to know about 0% commission stocks

Zero commission stocks have arrived in Australia, and they’re big news. Until now most brokers have added a dealing charge when you buy or sell stocks through them, but now when you open or close a US stock position on eToro, you won’t pay any commission at all – that means no markup, no management fee and no ticket fee.

It’s one of the biggest changes to brokerages in the past few years and it is seriously good news for the consumer. Put simply, it means more money in your pocket. The commission fees usually charged by brokers when you buy or sell a stock or other investment product, can be anywhere from a flat fee of $1 to $50, to a percentage of the total transaction value. Any type of fee can eat into your investment returns before you’ve even started trading, so even when they’re low, avoiding them is a smart move. Here are some of other benefits of zero commission stocks:

They allow more people to trade

Removing any barrier to investing is a positive move, as it opens up the market to a new 

generation of investors who may previously have been put off by additional fees. Not only does this encourage more people to enter the market, but it means that as the volume of people trading increases, so does the volatility of the market. This means more opportunities to buy low and sell high, which can make you more money in the long-term. However, don’t forget that most stocks benefit from longer-term investment plans.

They encourage better portfolio maintenance

Zero commission stocks allow investors who have a broad strategy with several stocks to rebalance their portfolio more regularly, as there’s no cost to buy and sell. However, it 

doesn’t mean you should trade the stocks in your portfolio more often for the sake of it. Ideally investments are for the long-term. You only benefit from compound interest if you leave your wealth to build, so stay disciplined and stick to your long-term investment plan; if you weren’t planning to trade a stock before it was commission free, don’t do it now either.

They allow investors to trade more freely

With zero commission stocks, investors can make smaller trades without the penalty of a transaction cost. Previously, there were sometimes limited lists of stocks offered with zero commission, which may have meant fee-conscious investors chose those without considering other options. Now people have the choice of whichever US stocks they choose, widening their options and giving them the opportunity to build a balanced portfolio. 

There are no limits

There is no cap and no trading limit on zero commission stocks at eToro. Zero commission applies to all US stocks available in the eToro platform when investing in non-leveraged BUY stock positions, and you can keep them as long as you like. Overnight (rollover) fees are not charged from non-leveraged BUY stock positions, no matter how long you hold them for.

100% stocks, 0% commission Open a free stock investing account with eToro and set yourself free of commission.

This content promotes stocks traded on US stock exchanges and is of a general nature only. Stocks are offered through eToro Service (ARSN 637 489 466) operated by Gleneagle Asset Management Limited ABN 29 103 162 278, AFSL 226199, and promoted by eToro Australia Pty Ltd. CAR 001281634. All other stocks are offered as derivatives and bear commission. 

The information has been prepared without taking your objectives, financial situation or needs into account. You should obtain your own advice in light of your own objectives, financial situation or needs and refer to our FSG and PDS  before deciding whether to trade with us. Trading stocks may not be suitable for all investors. Your capital is at risk. 

Zero-commission does not apply to short or leveraged positions. Zero-commission means that no broker fee will be charged when opening or closing the position on the US exchange. Other fees may apply. For additional information regarding fees, click here