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Thinking of writing an essay on how brokerages make money since a) it comes up on HN a lot and the easy answer (commissions) is wrong and b) the revenue mix for different brokerages, even among discount brokerages, varies hugely.
Charles Schwab, for example, runs a brokerage almost as a loss leader to have access to $100 billion (you read that right) in client deposits paying an average of 27 basis points (0.27%; you read that right) annually.
Net interest revenue is 70% of their topline revenue.
Net interest revenue is 70% of their topline revenue.
TDAmeritrade, by contrast, actually earns ~36% of their revenue by selling the thing that everyone thinks they are in business to sell. That is a high number among discount brokerages.
(In related news, people's intuitions about how e.g. retail banks or SMB-focused banks or commercial banks make money are also generally not that great.)
