Commission is a fee paid to an individual or entity for facilitating or executing a service, transaction, or sale. It is typically calculated as a percentage of the transaction value.
Commission is a fundamental concept in both financial markets and commercial transactions, but its usage and purpose vary depending on the context.
In financial markets, commission is a fee charged by a broker for executing buy or sell orders. It is one of the two primary trading costs—alongside spread.
Not all brokers charge commissions—Market Makers may earn from spreads only, while ECN/STP brokers often apply small commissions in exchange for raw spread access.
You trade 1 standard lot (100,000 units) and your broker charges $3.5 per side. Total commission = $7 per round-turn.
In commerce, commission is commonly paid to sales agents, distributors, or affiliates as an incentive for generating revenue or closing deals.
This model aligns interests between the seller and the business, promoting performance-driven results.
A sales agent negotiates a $10,000 deal and earns a 10% commission, resulting in $1,000 income.
Spread, Broker Fee, ECN, Affiliate Program, Performance Bonus, Fee Structure
Trading & Commerce / Cost Structures
In trading, always check whether your broker charges commission or not—it can impact your breakeven point. In business, commission structures can boost motivation and drive growth when used wisely.
