How is it possible to offer commission-free stock trading? And why it is bad for investors

Commission-free trading is not as great as it might sound. In the United States the costs are offset by Payment For Order Flow (when your brokerage sells your order to a market maker, bypassing the stock exchanges), but that's banned in many other countries. Find out how it's possible to offer commission-free trading in countries that allow or ban payment for order flow, and why commission-free trading could ultimately be bad for many investors.

00:00 Intro
00:12 Payment for Order Flow
01:05 History of trading commissions
05:30 The Bid-Ask spread
09:40 Example of market making
11:50 Net Interest Margin
13:35 Currency Conversion Fees
15:35 Is commission-free trading good?
17:14 Investors trading for free taking more risk

WATCH MORE OF MY MOST POPULAR VIDEOS:
When does renting make more sense than buying a home?: https://www.youtube.com/watch?v=KAMeI4uHAFE
How to calculate your Net Worth: https://www.youtube.com/watch?v=KhSnNtdYR9Y
How to find more money to save: https://www.youtube.com/watch?v=Tl-e7tIgcl0

My podcast about "Mostly Money" things: https://www.buzzsprout.com/5821

ABOUT ME: I've hosted a personal finance TV show on the Oprah Winfrey Network, used to be a stockbroker, went to school to become a racecar driver (failed), founded a fintech company that provides financial planning software to financial advisors who want to help more people who don't have lots of money, and I consult with wealth management companies on commercializing applications of behavioral finance. I'm also quite fond of donuts.

SUBSCRIBE FOR MORE VIDEOS LIKE THIS: http://www.youtube.com/user/preet182?sub_confirmation=1

MY BOOK TO LEARN ABOUT THE BASICS OF PERSONAL FINANCE: https://www.amazon.ca/gp/product/0143183516/ref=as_li_tf_tl?ie=UTF8&camp=15121&creative=330641&creativeASIN=0143183516&linkCode=as2&tag=whercom-20

FOLLOW ME ON TWITTER
http://twitter.com/preetbanerjee

WEBSITE: http://www.preetbanerjee.com

#MoneySchool #PersonalFinance #LearnAboutMoney #LearnToInvest #money #stockmarket #finance #howtoinvest #budgeting #budget #savemoney #insurance #financialplanning

Видео How is it possible to offer commission-free stock trading? And why it is bad for investors канала Preet Banerjee