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This question is about TD Ameritrade.

How does Ameritrade make money?

By Zippia Team - Feb. 1, 2023

Ameritrade makes money by offering discounted brokerage services to stock traders, investors, financial professionals, and other individuals. Ameritrade earns payments from orders and collects interest that it earns on the free float.

Here is a look at the ways Ameritrade makes money:

  • Payments for Order Flow

    Ameritrade makes a fraction of a penny per share when it sells its clients' stock order to high-frequency trading (HFTs) firms.

  • Collecting interest

    Ameritrade also provides loans to its users associated with banks, investment banks, and other financial institutions. The company then makes profits on the interest that is incurred from those loans. This is by far the biggest money-making for the trading company.

  • Commissions on trades

    Ameritrade also generates revenue from commissions on trades it oversees.

  • Investment platform

    Ameritrade also offers users access to an investment platform. Here it does charge commission fees, but does operate under a traditional broker model. The fees on this platform can range between $5 to $25, depending on Ameritrade broker involvement in each transaction.

How does Ameritrade make money?

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