Comments by "Magic Beans" (@Magic_beans_) on "Four Hidden Costs of Zero-Commission Brokers" video.

Agreed, the spread thing really depends on the company (and it happens anywhere, not just zero-commission brokers). As our host said, the more heavily traded a given security is, the smaller that spread will be. At the end of business Dec. 22, 2023 I’m seeing a bid-ask spread of 0.06% on Microsoft but 2.5% for Synchrony Financial (a mid-cap bank best known for doing the behind-the-scenes work for retail financing, those “no interest for 12 months” promos.) Overall the spreads aren’t too bad. I’ve automated my stock purchases so they happen every two weeks, and on that day I can expect to lag the market by a quarter percent. So for each $400 I invest I’d pay $1 in spreads. I’ll take that any day over $7 per trade like in the dot-com days or 2% minimum like in Wolf of Wall Street .
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@genghischan69 They all exist in some form, but they take on additional importance when the brokerage can’t rely on commissions. I should also note that brokers pressuring investors to trade so the broker could take a cut, that was highly common in the days of human brokers. If you’ve seen “Boiler Room” and “The Wolf of Wall Street” there’s plenty of truth to that.
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