Brokerage Fee

AAA

DEFINITION of 'Brokerage Fee'

A fee charged by an agent, or agent's company to facilitate transactions between buyers and sellers. The brokerage fee is charged for services such as negotiations, sales, purchases, delivery or advice on the transaction.

INVESTOPEDIA EXPLAINS 'Brokerage Fee'

There are many types of brokerage fees added in areas such as insurance, realty, delivery services or stocks. Brokerage fees will usually be based on a either a percentage of the transaction or a flat fee. They can also be a combination of the two.

Here is an example of the fee breakdown from a typical stock brokerage:

Stock Price Over $2:per share over 999 shares.

Stock Price $2 and Under:of principal trade with a minimum of $28 charged.

RELATED TERMS
  1. 2% Rule

    A trading practice where an investor should concentrate no more ...
  2. Commission Broker

    Someone who gets paid by the brokerage company for which he works ...
  3. Commission

    A service charge assessed by a broker or investment advisor in ...
  4. Full-Service Broker

    A broker that provides a large variety of services to its clients, ...
  5. Agency Costs

    A type of internal cost that arises from, or must be paid to, ...
  6. Inactivity Fee

    1. A sum charged to investors who haven't engaged in any buying ...
RELATED FAQS
  1. What is the cost of a share purchase?

    When investors purchase shares of stock, the price paid includes two components: the price of the stock and the fee charged ... Read Full Answer >>
  2. What is the smallest amount of shares I can buy?

    There is no minimum amount of shares that need to be bought in a single transaction, so an investor can purchase as little ... Read Full Answer >>
  3. What kinds of fees are involved in futures trading?

    The basic fees involved in trading futures contracts are brokerage fees, clearing fees and settlement fees. Futures trading ... Read Full Answer >>
  4. Why do limit orders cost more than market orders?

    Two common ways to trade stock are market orders and limit orders. A market order is the simplest type of stock trade; it ... Read Full Answer >>
  5. What percentage of a diversified portfolio should large cap stocks comprise?

    The percentage of a diversified investment portfolio that should consist of large-cap stocks depends on an individual investor's ... Read Full Answer >>
  6. What happens if my insurance claim falls below the deductible level?

    Though the ins and outs of health insurance are often confusing, the concept of the insurance deductible is relatively straightforward. ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  2. Forex Education

    How To Pay Your Forex Broker

    Three types of commissions are used in this market. Learn how to get the best deal.
  3. Investing Basics

    Paying Your Investment Advisor - Fees Or Commissions?

    The way a professional is compensated can affect quality of service. Learn more here.
  4. Bonds & Fixed Income

    Interpreting Your Broker's Reports

    Broker's reports can be confusing, but they don't have to be. Find out what information you need from your broker.
  5. Investing

    Fee-Based Brokerage: Will They Work For You?

    Learn the pros and cons of this type of investing and whether it will work for you.
  6. Retirement

    Why Financial Advisors Disagree

    Financial advisors sometimes offer conflicting opinions that can be confusing for many investors.
  7. Mutual Funds & ETFs

    Top 3 ETFs For Investing in Brazil

    Discover information and analysis of some of the most popular and best performing exchange-traded funds that offer investors exposure to Brazil.
  8. Insurance

    The Importance of Healthcare Risk Management

    Risk management is especially important in healthcare because human lives might be on the line. Here are some strategies to map out a plan.
  9. Insurance

    Medicaid and Nursing Homes: A Quick Guide to the Rules

    Medicaid can cover the costs of a long-term healthcare facility, if you qualify. But that's a big if.
  10. Professionals

    IRS Sets 2016 HSA Deduction Limits

    Contribution limits for HSA plans have increased slightly for 2016. Here's a breakdown of what they are and how they work.

You May Also Like

Hot Definitions
  1. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  2. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  3. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  5. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  6. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!