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they make profits on % cut for margin borrowing, part of bid-ask spread, special fees for u-name-it, % of money-market accounts held between trades, % cut of mutual fund and other financial products sold, etc, etc. The transaction fee is a tiny part of their profit machine. At 4 trades per month per customer they have AOL beat, PLUS they get much more in profits from all of these other wonderful mechanisms. Plus, a lot of them have fine print that says if youe die, in case of war, etc, etc, they don't have to give your money back. An interesting business! |
