We Lose Money on Every Trade, But Make It Up on Volume
By Paul Daley, Managing Director, BondWave’s Information Lab
One of the things that make bonds unique relative to stocks is the way compensation is collected for trading. The lion’s share of equity trades involve an explicit commission charged to the client. Be it a flat rate per ticket, as is common among online and retail brokerage, or a ‘cents per share’ commission, as is common among institutional trading arrangements, this figure is explicitly reported on trade confirmations and has become a source of competition among brokers.