The price of free stock trading

With a click of a button, anyone can become an amateur stock trader. This is all thanks to companies like Robinhood, E-Trade, and Charles Schwab, which allow everyday people to buy and sell stocks for free. But how are these companies making money?

The magical ingredient is a practice called payment for order flow. However, this practice has garnered significant controversy, to the point where the SEC (U.S. Securities & Exchange Commission) wants to crack down on it. Today on the show, we break down the players in the stock trade to explain why.

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