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Commission

• The fee paid to a broker to buy or sell securities. A commission increases the tax basis of the purchased security, thereby reducing the event capital loss or gain. Commissions vary widely from broker to broker.

• The fee paid to a broker to execute a trade, based on number of shares, bonds, options, and/or their dollar value. In 1975, deregulation led to the creation of discount brokers, who charge lower commissions than full service brokers. Full service brokers offer advice and usually have a full staff of analysts who follow specific industries. Discount brokers simply execute a client's order -- and usually do not offer an opinion on a stock. Also known as a round-turn.

• A fee charged for executing an investment transaction, such as buying or selling securities.

 
 Embedded terms in definition
 Basis
Broker
Buy
Capital loss
Capital
Discount broker
Discount
Event
Offer
Options
Order
Securities
Security
Sell
Shares
Stock
Tax basis
Trade
 
 Referenced Terms
 12b 1 funds: Mutual funds that do not charge an upfront or back-end Commission, but instead take out up to 1.25% of average daily fund assets each year to cover the costs of selling and marketing shares, an arrangement allowed by the SEC's Rule 12b-I (passed in 1980).

 Account executive: Is the party who acts as an agent for his customer. The broker receives a Commission as compensation. This person may also participate in spreads or other fees which generate revenue for the firm. This person is also known as an Associated Person (AP), Investment Executive (IE), Registered Representative (RR), Registered Customer Support Person or Securities Salesman. Brokers are required to be licensed according to product lines and states when required.

 Agent: The decision-maker in a principal-agent relationship.Is a party who acts on the behalf of another. This occurs when a broker executes a trade for the benefit of the customer. Here, the broker receives a Commission. This compares to a dealer transaction. See Broker-Dealer.A firm that executes orders for or otherwise acts on behalf of another (the principal) and is subject to its control and authority. The agent may receive a fee or Commission.

 Agent: The decision-maker in a principal-agent relationship.Is a party who acts on the behalf of another. This occurs when a broker executes a trade for the benefit of the customer. Here, the broker receives a Commission. This compares to a dealer transaction. See Broker-Dealer.A firm that executes orders for or otherwise acts on behalf of another (the principal) and is subject to its control and authority. The agent may receive a fee or Commission.

 Annual report: A corporations's annual statement of financial operations, typically a glossy, colorful publication. Annual reports include a balance sheet, income statement, auditor's report and description of a company's operations. The Securities and Exchange Commission requires that publicly-traded companies file an annual report, called a Form 10-K, with the Commission. The 10-K contains more detailed financial information than many annual reports.Is the yearly statement of financial condition for a financial organization. It includes balance sheet and income statement items. It may also include a descriptive synopsis of organizational highlights.Yearly record of a publicly held company's financial condition. It includes a description of the firm's operations, its balance sheet and income statement. SEC rules require that it be distributed to all shareholders. A more detailed version is called a 10-K.The report that corporations must provide to common shareholders that summarizes and documents the firm's financial activities during the past year.

 
 Related Terms
 Commission broker
Commission house
Commission run
Futures commission merchant
Securities and exchange commission
Securities and exchange commission sec

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