Commission definition

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Commission is the charge levied by an investment broker for making trades on a trader’s behalf.

Levels of commission vary between different brokers, depending on the asset being traded and the type of service being offered. Execution-only brokers tend to have lower commissions, as they are not deciding trades on their client’s behalf or offering advice.

Commission is not the only type of charge traders will encounter. Forex and indices trading (non-DMA), for example, has no commission but instead wraps a spread around the market price of an instrument. CFDs on shares will incur commission, but CFD trades on other markets also have a spread. 

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