A brokerage commission is the fee paid to a stock broker by a client for the purchasing or selling of shares in the stock market. Sometimes a brokerage commission is calculated as a percentage of the total transaction. Some stock brokers offer discounted brokerage commission rates on heavy trading and still some others offer a flat fee system.
Some brokerages offer advisory and portfolio management services. The fee paid for such services should not be confused with a brokerage commission. The brokerage commission covers expenses for the broker such as transaction fees paid to the stock exchange, order-handling fees and it also forms a portion of its fee-based revenues.
Related Terms: Brokerage Account – Brokerage Firm – Online Stock Broker