Commission Definition

Jan 08, 2024

Reviewed by: etf.com Staff

Edited by: etf.com Staff

Learn more about Commissions

While commission-free ETF trading has become prevalent, understanding the concept of commissions remains essential. In ETFs, a commission refers to the fee paid to a broker for buying or selling fund shares. Though many brokers now offer commission-free trading, investors should remain vigilant about potential transaction costs, particularly in scenarios where specific conditions, such as minimum holding periods or other restrictions, may apply. Comprehensive awareness of commission structures empowers investors to make informed decisions regarding the cost implications of executing trades and contributes to a more transparent and efficient ETF trading environment.

Related Terms

Exchange-Traded Fund (ETF)

ETF Glossary

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.

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