Brokerage accounts
You can set up a brokerage account for free at Ally Invest. The company s account types include individual, joint, custodial, traditional IRA, Roth IRA, and rollover IRA accounts.
Ally s self-directed brokerage accounts also offer commission-free trading on stocks, ETFs, and options. And though you ll have to pay $0.50 for each options contract, this is about $0.15 less than what other brokerages – such as Fidelity and Merrill Edge typically charge for options.
When it comes to bond investments, you ll need a minimum of $10, and you ll pay $1 per bond. Ally Invest offers more than 12,000 mutual funds, which cost $9.95 per trade. Stocks that are priced less than $2 cost $4.95 (plus $0.01 per share).
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Payment for order flow (PFOF) is the compensation brokerages earn by having third-party firms execute client orders.
Payment for order flow can impact an investor s final per-share cost, especially if they trade actively.
Though PFOF can affect costs, it doesn t jeopardize your transactions or account security.
In early 2021, online investment apps like Robinhood started getting scrutinized for a behind-the-scenes system called payment for order flow (PFOF). The process involves them routing stock or other trade orders from their clients to outside firms, who actually carry out the trade. These third-party companies pay your broker for routing your order to them.