can you buy stocks for free? A practical guide

Can you buy stocks for free?

Can you buy stocks for free? Many retail investors ask this when they see "$0 commissions" promoted by brokers. This article focuses on U.S. equities and retail broker platforms: what firms mean by commission‑free stock trading, what costs may still apply, how brokers make money, where promotional "free shares" fit in, and how to buy stocks at the lowest total cost while protecting execution quality and tax/reporting needs.

As of 2026-01-21, according to Barchart/StockStory reporting, several large brokerage-related and financial firms published earnings and operating metrics that show the scale and ongoing evolution of retail trading and brokerage revenues (see the "References and further reading" section). These reports underline why broker business models — even for zero‑commission services — matter to investors who care about cost and execution.

Definition and scope

When people ask "can you buy stocks for free?" they usually mean trading U.S. stocks and ETFs through retail broker platforms without paying a per‑trade commission. "Buy stocks for free" can cover several related concepts:

• Zero‑commission trades: brokers advertise $0 per‑trade fees for buying/selling stocks and ETFs.
• No account minimums: the broker does not require a deposit to open or maintain an account.
• Promotional free shares: sign‑up or referral rewards that give new users a share or fractional share without paying for it directly.
• Fractional shares: buying partial shares so investors can purchase expensive stocks with small amounts of money.

Important scope notes:

• This guide concentrates on U.S. equities and retail brokers (mobile and established incumbents) and the mechanisms relevant to typical retail accounts (taxable brokerage accounts, IRAs). It does not cover institutional trading desks or corporate actions in depth.
• "Can you buy stocks for free?" rarely means truly zero cost in every sense. Even when per‑trade commissions are $0, other costs, execution effects, or regulatory fees may still apply. The sections below explain the distinction between surface zero‑commission and genuinely no‑cost trading.

Brief history and market context

The move to $0 commissions for stock and ETF trading was a major industry shift. Historically, retail brokers charged per‑trade commissions. A few key developments changed this:

• A mobile‑first broker popularized commission‑free trading and fractional shares, lowering the barrier for new retail participants and triggering rapid user growth. That platform's approach encouraged competitors to drop commissions to retain customers.
• Major incumbent brokers responded by eliminating commissions on U.S. equity and most ETF trades, maintaining broader product suites and custody services.
• The result: broad retail participation increased, mobile apps and fractional investing became commonplace, and brokers introduced premium features and new revenue channels to offset lost commission income.

Industry coverage from financial press and consumer finance sites documents this transition and the ripple effects on product offerings and retail volumes.

How “commission‑free” brokers make money

A broker advertising $0 commissions still has operating costs and revenue needs. Common revenue sources include the following.

Payment for order flow (PFOF)

Payment for order flow means a broker routes retail orders to market makers or wholesalers that pay the broker for that flow. The market maker executes the order, often internalizing or hedging it. Brokers use PFOF because it can generate steady revenue per unit of order flow, allowing them to advertise $0 commissions while earning money elsewhere.

How PFOF can affect investors:

• Execution price differences: routing to market makers may produce execution prices slightly inferior to other venues when measured against a national best bid or offer benchmark. That can create a small but real cost to investors even when commissions are $0.
• Transparency: brokers must disclose order routing practices and PFOF arrangements, and regulators monitor whether these practices satisfy best‑execution obligations.

(PFOF is analyzed in detail by trade publications and financial education sites.)

Interest on cash and sweep accounts

Uninvested cash in brokerage accounts is often swept into bank deposit programs or short‑term investments. Brokers earn interest spreads between what they receive and what they pay customers, or they place cash into low‑risk instruments. In low‑rate environments, this spread can still be a meaningful revenue stream at scale.

Margin lending and securities lending / rehypothecation

Brokers earn interest on margin loans when customers borrow to trade. They also lend customers' securities to short sellers and other counterparties and receive fees. Rehypothecation — where client assets are used as collateral for the broker or lender's own borrowing — can increase liquidity but introduces counterparty and custody considerations.

Key investor considerations:

• Margin interest rates vary and are a direct cost when you borrow.
• Securities lending can generate revenue for a broker and sometimes the lending client, but terms differ across firms and account types.
• Rehypothecation can magnify systemic risk under stress; review broker agreements for rehypothecation clauses.

Subscription and premium services

Many brokers offset free trades by offering paid tiers: premium market data, margin or advanced trading features, faster settlement, higher interest on margin balances, or cash management products. Examples include premium research, priority customer support, and enhanced trading tools.

Regulatory and clearing fees

Small pass‑through fees such as SEC and FINRA transaction fees, clearing and settlement charges, or wire and transfer fees still appear on trade confirmations or monthly statements. While often modest per trade, they are not always zero.

Common retail platforms that offer commission‑free stock trading

Several well‑known brokers and mobile platforms now offer $0 commissions for U.S. stocks and ETFs. Below are concise descriptions of typical offerings and business models.

• Robinhood — Popularized zero‑commission trading and fractional shares for many retail users. Offers cryptocurrency trading as well. Revenue mixes historically included payment for order flow and paid tiers. Execution quality and order routing have been widely discussed in industry press.

• Fidelity, Vanguard, Charles Schwab — Large incumbents that removed commissions on U.S. equities and many ETFs. These firms emphasize broad product suites, retirement accounts, and best‑execution policies. Their size and market presence lead them to focus on execution quality and client protections.

• SoFi, Cash App, Webull, Freetrade, Moomoo — Mobile‑first or fintech brokers offering $0 commissions, fractional shares, and promotional incentives. Features differ by platform: some emphasize simple interfaces and social features; others provide more advanced charting and order types.

Regional and product notes:

• Some platforms operate primarily in the U.S.; others serve the UK/EU market with local rules and product limits.
• Certain brokers restrict order types (for instance, complex options strategies or certain conditional orders) on commission‑free tiers or mobile apps.

When evaluating platforms, compare not just headline $0 commissions but also order types, margin costs, transfer/withdrawal fees, and the broker’s reputation for execution quality.

Promotions and “free shares”

"Free shares" promotions are common customer acquisition tactics. Typical mechanics:

• New user bonuses: the broker credits a full or fractional share after sign‑up and funding, or after meeting minimal activity (e.g., deposit $100).
• Referral programs: invite friends and both parties receive a free share or cash credit when conditions are met.
• Gamified rewards: promotional spins, mystery boxes, or tiers that give random stock awards.

Common conditions and limitations:

• Vesting or holding rules: some promotions require the account to be funded for a minimum time before the free share is fully owned or transferable.
• Fractional share transferability: fractional promotional shares may be untransferable to another broker or may convert to cash on transfer.
• Tax treatment: free shares are often treated as taxable income at fair market value when issued; platforms usually report these on 1099 forms.

Promotions are legal marketing tools but read the fine print. Promotional equity units may carry short‑term liquidity or transfer restrictions.

Execution quality and hidden costs

Zero per‑trade commissions do not guarantee the best overall price for an investor. Execution quality and routing decisions can create hidden costs.

How execution affects total cost:

• Spread and price improvement: even for listed stocks with tight NBBO spreads, some routing results in less price improvement than alternative venues, which can slightly increase effective buy prices and reduce sell proceeds.
• PFOF impact: routing driven by PFOF arrangements can favor market makers that pay for flow. That may or may not align with the absolute best price for the customer on every trade.
• Delayed routing and internalization: routing that internalizes flow within a broker or sends it to a single market maker can produce consistent execution patterns that vary from other venues.

Other non‑commission fees:

• SEC transaction fees and FINRA charges: small per‑trade regulatory fees that appear on trade confirmations.
• Broker transfer fees: outgoing ACAT fees, account closures, wire fees, or paper statement charges.
• Currency conversion fees: for ADRs or foreign trades, conversion fees may apply.
• Margin interest: borrowing to trade increases cost and risk.

Practical point: for large orders, use limit orders to control price execution. For small retail trades, differences are often cents per share but can add up with volume.

Regulatory and legal considerations

Regulatory obligations and oversight shape how "commission‑free" brokers operate:

• Best execution standards (including Regulation NMS in the U.S.) require brokers to seek the best reasonably available execution for customer orders, considering price, speed, and likelihood of execution.
• Disclosure requirements: brokers must disclose order routing practices and PFOF arrangements in periodic reports. Compare these disclosures when evaluating brokers.
• SEC and FINRA scrutiny: regulators have investigated and enforced actions when disclosures or execution practices were inadequate. Transparency and oversight have increased since the large market shifts toward commission‑free models.

Investors should review a broker’s published execution quality reports and routing disclosures to assess whether their practices align with the investor’s priorities.

Risks and drawbacks for retail investors

Zero‑commission trading democratized access but introduced risks and limitations:

• Conflicts of interest: revenue sources like PFOF can create misaligned incentives between speed/revenue and pure price optimization for customers.
• Reduced order types or protections: some mobile platforms limit advanced order types, which can affect strategy execution.
• Rehypothecation and margin risks: using margin or allowing rehypothecation raises counterparty and liquidity risk under stressed market conditions.
• Fractional share portability: fractional shares granted or purchased on one platform may not be transferable to another broker in kind; they may convert to cash on transfer.
• Behavioral risks: gamified interfaces and real‑time notifications can encourage excessive trading or emotional decisions.

These risks do not mean commission‑free trading is inherently bad — they mean investors should be informed and deliberate.

How to buy stocks at minimal total cost — practical checklist

Follow this checklist to reduce total trading cost while maintaining execution quality and safety:

• Compare fee schedules beyond headline commissions: look for transfer, withdrawal, margin, and regulatory fees.
• Check order routing and PFOF disclosures: review a broker’s execution quality reports and routing statements.
• Prefer limit orders when price control matters: market orders can incur slippage, especially in volatile conditions.
• Use tax‑advantaged accounts when appropriate: retirement accounts can reduce taxable events.
• Read fractional share and transfer policies: confirm whether fractional holdings are portable and under what conditions.
• Watch promotions closely: understand holding or vesting requirements and tax consequences of "free shares."
• Verify broker custody and insurance: confirm SIPC coverage and any supplemental insurance; prefer brokers with clear custodial arrangements.
• Consider broker stability and product breadth: larger incumbents may provide wider product access and better liquidity; mobile brokers may offer superior UX and lower friction for small trades.
• Track all non‑commission fees: keep a running record of small charges that can accumulate over time.

Following this checklist helps answer the core user concern: not just whether "can you buy stocks for free?" but whether you can trade at minimal net cost.

Tax and reporting considerations

Free trades remain taxable events when you realize gains or receive dividends. Important points:

• Capital gains and losses: selling a free or purchased share triggers capital gains/losses based on cost basis. Brokers generally report this on 1099‑B forms.
• Dividends: dividend income is taxable and reported.
• Promotional shares: the fair market value of a promotional free share may be reported as ordinary income when issued; consult a tax advisor for specifics.
• Recordkeeping: ensure your broker provides accurate cost‑basis reporting and tax documents for all taxable events.

Frequently asked questions (short Q&A)

Q: Is commission‑free really free? A: Commission‑free removes per‑trade fees, but other costs (execution spreads, PFOF effects, regulatory fees, margin interest) can still create net costs.

Q: Do brokers still make money if trades are free? A: Yes. Brokers earn revenue via payment for order flow, interest on cash and margin, securities lending, premium services, and small pass‑through fees.

Q: Can I move fractional shares to another broker? A: Not always. Many brokers treat fractional shares as ledger entries that may not be portable. Check transfer policies before relying on fractional portability.

Q: Are there differences between brokers on execution quality? A: Yes. Execution quality varies by routing practices, market maker relationships, and internal processes. Review execution quality reports and third‑party analyses.

Q: Should I avoid brokers that use PFOF? A: PFOF is common; rather than avoiding a broker solely for PFOF, evaluate execution quality reports, price‑improvement statistics, and overall costs.

See also

• Payment for order flow
• Fractional shares
• Best execution (Regulation NMS)
• Broker‑dealer operations
• SIPC protection
• History of commission‑free trading

References and further reading

• Robinhood — platform disclosures and order routing statements (company fee and execution policy documents)
• Investopedia — explanation of payment for order flow and execution quality
• Vanguard — broker guidance and best execution statements
• NerdWallet, Motley Fool, CNBC — industry coverage of the move to commission‑free trading and consumer comparisons
• WallStreetZen and company pages — promotional roundup and platform features
• SoFi, Cash App, Freetrade — company fee schedules and product pages

As of 2026-01-21, according to reporting by Barchart/StockStory, the following headline metrics were published in recent quarterly coverage (examples demonstrating scale and industry context):

• Columbia Banking System reported last quarter revenue of $579 million, a 1.4% beat versus certain analyst expectations; analysts were forecasting year‑over‑year revenue growth to $696.2 million for the next reported quarter. (Source: Barchart/StockStory reporting.)
• F.N.B. Corporation reported Q4 CY2025 revenue of $457.8 million and adjusted EPS of $0.50, exceeding some analyst estimates on EPS and reporting tangible book value per share growth. (Source: Barchart/StockStory reporting.)
• Interactive Brokers reported $1.64 billion in revenue for a recent quarter and robust volume metrics, showing the scale of electronic order flow and brokerage operations. (Source: Barchart/StockStory reporting.)
• Netflix reported Q4 CY2025 revenue of $12.05 billion and provided guidance near analyst expectations, illustrating how large public companies continue to drive market activity that brokers facilitate. (Source: Barchart/StockStory reporting.)

These reports illustrate why broker economics (execution systems, cash balances, lending, and premium services) remain a focus for investors and regulators in the post‑commission era.

Practical examples and scenarios

Example 1 — Small-dollar retail investor:

• You deposit $100 and buy fractional shares in a high‑price stock through a mobile broker offering $0 commissions. You may indeed pay no commission, but the broker’s routing and execution may result in a slightly higher effective buy price than another venue. The promotional sign‑up free share may offset costs initially, but check tax reporting and transferability.

Example 2 — Active trader with volume:

• If you trade large share volumes, execution quality and price improvement matter more than per‑trade commissions. Even small differences in execution can amount to meaningful dollars over hundreds or thousands of trades. For high volume, compare execution statistics and consider platforms that emphasize best execution and direct market access.

Example 3 — Using margin for leverage:

• Margin interest can erode returns quickly. Even if trades are commission‑free, borrowing costs and the risk of forced liquidation when positions move against you can produce large losses.

How Bitget fits into this landscape

When discussing exchanges and web3 wallets within this guide, Bitget is recommended for users interested in integrated services that bridge spot trading, crypto custody, and web3 wallet options. If you use web3 wallets or interact with tokenized assets alongside traditional equities, consider Bitget Wallet for custody and Bitget’s platform services for cross‑product access. Always compare custody terms and insurance provisions when storing assets off‑exchange.

Note: this article focuses mainly on U.S. equities and retail brokers; Bitget provides complementary services in the broader digital asset ecosystem and is recommended where web3 custody or cross‑product access is relevant.

Editor notes and update guidance

• Fee schedules, promotional offers, and regulatory actions change frequently. Editors should verify broker fee pages and recent SEC or FINRA releases before major updates.
• When updating, link to the latest broker order routing/execution quality reports and to official company fee schedule documents for verifiability.

Final practical tips — what to do next

• If your priority is the lowest total cost for small, infrequent trades, a mobile broker with $0 commissions and a clear execution disclosure may be suitable.
• If you trade large sizes or need advanced execution, focus on execution quality reports, routing disclosures, and consider limit orders or brokers that emphasize best execution.
• Use sign‑up promotions thoughtfully: check tax and transfer rules and avoid opening accounts purely for promotional churn.
• For web3 custody or tokenized asset needs, explore Bitget Wallet for integrated custody options.

Further exploration: compare brokers’ execution quality reports, read official fee schedules, and consult a tax professional for personalized tax treatment of promotional shares and trading gains.