When investors make money in profits do the online investing services such as E-Trade, Sharebuilder lose money?
When investors hit it really big are the investment services losing money? It doesn't come out of their pockets does it?
No.
The brokerage houses almost always make money on every trade (if they know what they are doing).
If the customer makes a quick killing, it is actually *slightly* more likely that the house made money on the trade too...slicing off a vig at both ends either through in house trading and/or spread differences.
Every broker is a dealer. A broker/dealer makes money off of commissions when investors buy and sell stocks in the broker function. In that case it really doesnt make any difference if the market goes up or down. Brokers make money. And in the dealer function they make money off the spread between the bid and ask.
The brokerages make their money by handling the trades (gain or loss).
The volume of trades have gone down so that's why their profits are lower.
