Investing Simple Logo
Get 1 Free Stock Worth Up To $200 From Robinhood!
Sign up with Robinhood, deposit any amount and get 1 Free Stock. It takes less than 3 minutes to sign up and claim your Free Stock Bonus.
Webull free stock promotion
Get Up To 5 Free Stocks From Webull
Open a new Webull brokerage account today and deposit any amount of money to receive 5 free stocks. Webull offers commission free stock, ETF, option and crypto trading.
Written by Krysten Zinon on February 2, 2023
FTC Disclosure

Is Robinhood Really Commission Free In 2023?

Robinhood is a popular brokerage app that allows investors to buy and sell stocks, options, cryptocurrencies, and other securities.

One of the biggest advantages of using Robinhood is that it is commission-free.

However, there are some small regulatory fees that are passed on to customers to cover the costs incurred by the government for supervising and regulating the securities markets and professionals.

1. FINRA Regulatory Transaction Fee

One of these fees is the regulatory transaction fee, which is charged by the Financial Industry Regulatory Authority (FINRA) to help cover the costs of the Securities and Exchange Commission (SEC).

  • As of February 27, 2023, the SEC fee is $8 per $1,000,000 of principal (only for sell orders), rounded up to the nearest penny.
  • Robinhood doesn't pass this fee on to customers for sales with a notional value of $500 or less.

Keep in mind that option orders incur both the passthrough SEC fee and the FINRA trading activity fee (TAF) regardless of the sale order value.

2. FINRA Trading Activity Fee

The FINRA trading activity fee is charged to brokerage firms like Robinhood to cover the costs of supervising and regulating these firms.

  • Robinhood passes this fee on to customers, except for sales of 50 shares or less.
  • As of January 1, 2023, the TAF is $0.000145 per share (equity sells) and $0.00244 per contract (options sells).
  • This fee is rounded up to the nearest penny, which will be no greater than $7.27 per trade.

Keep in mind that you may be charged more than the $7.27 fee because the fee limit is based on the execution of your order, which can occur with multiple trades.

3. ADR Fees (Foreign Stock Ownership)

Lastly, if you are trading American depositary receipts (ADRs), which are certificates that represent foreign stocks that you can trade on U.S. stock markets, the banks issuing these certificates may charge custodial fees that typically range from $0.01-$0.03 per share.

Final Thoughts

In conclusion, while Robinhood is commission-free, there are some small regulatory fees that customers need to be aware of.

As a customer of Robinhood, you can rest assured that you are not paying high commission rates, which can eat into returns.

This article was generated using automation technology, and thoroughly edited and fact-checked by an editor on our editorial staff.

Article written by Krysten Zinon

Read more

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
Try Robinhood
M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Passively invest in private real estate deals with as little as $10. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
Copyright © 2018 – 2023 Investing Simple LLC. All Rights Reserved.
Investing Simple is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investing Simple has advertising relationships with some of the offers listed on this website. The information on Investing Simple could be different from what you find when visiting a third-party website. All products are presented without warranty. For more information, please read our full disclaimer.
Website managed by Stallion Cognitive™

Get 1 Free Stock Worth Up To $200 From Robinhood!

Don't Miss This Opportunity!

Investing Simple readers can claim a free stock from Robinhood worth up to $200 when they open a brokerage account and deposit any amount.

For US Residents only. Investing Simple is affiliated with Robinhood, and we may earn a commission when you sign up for Robinhood.

linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram