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The real costs of commission-free trading

Platforms that offer commission-free trading may not be the attractive prospect that they seem
The real costs of commission-free trading

Increasing numbers of trading platforms that offer commission-free trading have launched in recent years. If you are a frequent trader, this may seem like an attractive prospect as dealing fees can rack up quickly, for example, if you want to deal more often during times of volatility. So, not surprisingly, commission-free platforms have done a roaring trade during the periods of market turbulence this year and the number of new registered users is accelerating at a faster rate than those of more traditional investment platforms.

US broker Robinhood brands itself as the pioneer of commission-free trading, having offered this to customers in the US since 2015. The broker said in November last year that it would launch in the UK this year. But it has now said the launch has been postponed indefinitely.

Robinhood has been criticised for gamifying investing and luring young traders to take on inappropriate risk, sometimes with devastating consequences. 

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