A:

When placing a market order for a security through a broker, there will be a commission accompanying the service. The fee charged can vary depending on whether the order is filled, canceled, modified or it expires.

In most situations, when an investor places a market order that goes unfilled, that investor will not be charged a fee. This is because the investor receives no benefit from the service. However, if the order is canceled or modified, the investor may find additional charges are added to the order.

For example, many of the major exchanges will charge members for orders that are canceled or modified. A member canceling an order placed on the Chicago Board Options Exchange will face a cancellation fee of $1.20 per order. The broker will often pass this cost on to clients. Limit orders that go partially filled will incur a fee, sometimes on a prorated basis.

The main thing to remember with brokerage fees is that each firm has a unique fee schedule. One brokerage may not charge a client for unfilled orders, while another may charge when an order is placed. Before placing an order, investors should know the details behind their brokers' specific fees.

For more information regarding commissions, read Paying Your Investment Advisor - Fees Or Commissions?

RELATED FAQS

  1. What's a good forex strategy to use when spotting a Wedge-shaped Pattern?

    Find out more about the rising and falling wedge formations and how to implement a forex strategy when you spot these patterns ...
  2. Why should investors research the C-suite executives of a company?

    Learn how C-suite officers affect shareholders; discover how the CEO impacts financial performance and why governance is ...
  3. How does the risk of investing in the aerospace sector compare to the broader market?

    Learn how the risk of investing in the aerospace sector compares to the broader market and how investors use this information ...
  4. Why would a company issue a rights offering?

    Understand more about a rights offering, and learn the most common reasons a company might have to issue a rights offering, ...
RELATED TERMS
  1. Exchange Traded Derivative

    A financial instrument whose value is based on the value of another ...
  2. Catastrophe Equity Put (CatEPut)

    Catastrophe equity puts are used to ensure that insurance companies ...
  3. Open Trade Equity (OTE)

    Open trade equity (OTE) is the equity in an open futures contract.
  4. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  5. Sharpe Ratio

    A ratio developed by Nobel laureate William F. Sharpe to measure ...
  6. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...

You May Also Like

Related Articles
  1. Technical Indicators

    Will These High-Flying Stocks Stay Hot ...

  2. Chart Advisor

    These REITs Are Looking Good Right Now

  3. Professionals

    How Financial Advisors Pick Client Investments

  4. Chart Advisor

    Commodity Traders are Watching These ...

  5. Trading Strategies

    Analyzing The Market With Trend Mirrors

Trading Center