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Financial Glossary
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 Commission
The fee paid to a broker to execute a trade, based on number of shares, bonds, options, and/or their dollar value. In 1975, deregulation led to the creation of discount brokers, who charge lower commissions than full service brokers. Full service brokers offer advice and usually have a full staff of analysts who follow specific industries. Discount brokers simply execute a clients order -- and usually do not offer an opinion on a stock. Also known as a round-turn.
A service charge assessed by an agent in return for arranging the purchase or sale of a security or real estate. The commission must be fair and reasonable, considering all the relevant factors of the transaction. Commissions vary widely from broker to broker.
An amount paid by a financial institution to an intermediary for the placing of business. Normally calculated as a percentage of the amount paid (i.e. of the premium for an insurance policy or of the amount invested in a fund or used to purchase securities). Commission is also payable in a number of other situations where the payment for a service is a proportion of the value of the transaction (eg the provision of foreign currency, the sale of a house, etc).
Payment made to a stockbroker when you buy or sell shares. In general, the level of commission you pay will either be a flat fee (possibly going up in stages according to the size of the deal) or a percentage based on the size of the deal.An important determinant of the amount of commission you pay will be the kind of service you get from your broker.Discretionary : the broker has general discretion as to how he manages your portfolioAdvisory: the broker will contact you to suggest changes in the composition of your portfolio, but he does not have the authority to trade on a completely discretionary basis.Execution only: the broker"s primary function is to execute the buy/sell instructions which you give him. He does not give advice either proactively or at your request.As a rule, execution only brokers are the cheapest for transaction costs.
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Glossary 
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Commission \ The fee paid to a broker to execute a trade, based on number of shares, bonds, options, and/or their dollar value. In 1975, deregulation led to the creation of discount brokers, who charge lower commissions than full service brokers. Full service brokers offer advice and usually have a full staff of analysts who follow specific industries. Discount brokers simply execute a clients order -- and usually do not offer an opinion on a stock. Also known as a round-turn.
A service charge assessed by an agent in return for arranging the purchase or sale of a security or real estate. The commission must be fair and reasonable, considering all the relevant factors of the transaction. Commissions vary widely from broker to broker.
An amount paid by a financial institution to an intermediary for the placing of business. Normally calculated as a percentage of the amount paid (i.e. of the premium for an insurance policy or of the amount invested in a fund or used to purchase securities). Commission is also payable in a number of other situations where the payment for a service is a proportion of the value of the transaction (eg the provision of foreign currency, the sale of a house, etc).
Payment made to a stockbroker when you buy or sell shares. In general, the level of commission you pay will either be a flat fee (possibly going up in stages according to the size of the deal) or a percentage based on the size of the deal.An important determinant of the amount of commission you pay will be the kind of service you get from your broker.Discretionary : the broker has general discretion as to how he manages your portfolioAdvisory: the broker will contact you to suggest changes in the composition of your portfolio, but he does not have the authority to trade on a completely discretionary basis.Execution only: the broker"s primary function is to execute the buy/sell instructions which you give him. He does not give advice either proactively or at your request.As a rule, execution only brokers are the cheapest for transaction costs.
Commission / the fee paid to a broker to execute a trade, based on number of shares, bonds, options, and/or their dollar value. in 1975, deregulation led to the creation of discount brokers, who charge lower commissions than full service brokers. full service brokers offer advice and usually have a full staff of analysts who follow specific industries. discount brokers simply execute a clients order -- and usually do not offer an opinion on a stock. also known as a round-turn.
a service charge assessed by an agent in return for arranging the purchase or sale of a security or real estate. the commission must be fair and reasonable, considering all the relevant factors of the transaction. commissions vary widely from broker to broker.
an amount paid by a financial institution to an intermediary for the placing of business. normally calculated as a percentage of the amount paid (i.e. of the premium for an insurance policy or of the amount invested in a fund or used to purchase securities). commission is also payable in a number of other situations where the payment for a service is a proportion of the value of the transaction (eg the provision of foreign currency, the sale of a house, etc).
payment made to a stockbroker when you buy or sell shares. in general, the level of commission you pay will either be a flat fee (possibly going up in stages according to the size of the deal) or a percentage based on the size of the deal.an important determinant of the amount of commission you pay will be the kind of service you get from your broker.discretionary : the broker has general discretion as to how he manages your portfolioadvisory: the broker will contact you to suggest changes in the composition of your portfolio, but he does not have the authority to trade on a completely discretionary basis.execution only: the broker"s primary function is to execute the buy/sell instructions which you give him. he does not give advice either proactively or at your request.as a rule, execution only brokers are the cheapest for transaction costs.
