Learn the stock market › How to trade on the exchange › Lesson 6 of 6
What does it cost? Commissions and fees
Work out your own
Enter the amount and the commission from your broker's fee schedule. Enter 0 as the percentage if it charges a flat fee, and leave the flat fee blank if it has none.
Enter the rate from your broker's fee schedule.
You pay on both the purchase and the sale, so the calculator counts both. The SEC suggests asking exactly this question: how much does an investment have to rise before you break even?
Why small orders cost the most
Fee schedules differ between brokers. This is a made-up example with a flat fee of $4.95 per order.
| Amount | Commission per order | The price must rise |
|---|---|---|
| $100 | $4.95 | 9.90% |
| $500 | $4.95 | 1.98% |
| $1,000 | $4.95 | 0.99% |
| $5,000 | $4.95 | 0.20% |
A flat fee is the same at any size, so on a small order it is large as a percentage. That is why a percentage on its own says little: it is the fee and the size of your order together that count.
What else you pay
The commission is the fee on the confirmation. There are others:
- The spread is what you pay when you buy and sell at once. It is on no confirmation.
- Account fees can apply, for example for transfers or paper statements. They are in the fee schedule.
- Currency conversion applies if you trade a stock in another currency.
- Taxes depend on your account and your country, and are not covered in this course.
No commission does not mean that nobody is paid. The SEC describes how a broker can route your order to a market maker that pays for the order flow, or fill it from the firm's own inventory and make money on the spread.
If you buy several times, the average cost calculator works out your average price. A limit order sets the highest price you pay.
Test yourself
Your broker charges a flat $5 per order. You buy shares for $250 and later sell them. How much must the price rise to cover the fees?
Sources
- US Securities and Exchange Commission, Understanding Fees, read on 5 November 2026.
- US Securities and Exchange Commission, Executing an Order, read on 5 November 2026.