Commission

From Traderpedia

Definition:
A transaction fee charged to a trader or investor when dealing through an intermediary.


Commission is the charge a financial intermediary charges to execute a transaction on a customer's behalf. The most commonly thought of types of commission is that of a broker in the stock or other markets. Equity, option, and futures generally all incur commissions.

A standard commission is one charged per transaction. In that case, the trader pays both to buy and sell when making a trade.

A round-turn commission is one which the broker only charges one fee when a position is closed out.