Commission

In general, a fee paid to a broker or agent for facilitating a transaction. More specifically, a payment made to a stockbroker when you buy or sell shares. In general, the level of commission is either a flat fee (possibly going up in stages according to the size of the deal) or a percentage based on the size of the deal. An important determinant of the amount of commission you pay will be the kind of service you get from your broker. This may be discretionary (the broker has general discretion as to how he manages your portfolio); advisory (the broker suggests changes in the composition of the portfolio, but does not have the authority to trade on a completely discretionary basis); or execution-only (the broker's primary function is to execute the buy/sell instructions which you give him). As a rule, execution-only brokers are the cheapest for transaction costs.