Reply #23: Comissions is one form of revenue

[Statistical]

Brokers are not the markets though.

You pay a commission to a broker the broker executes the trade on the market.
The markets make money by charging a commission to the broker.
Markets also charge for access and for data feeds (each trade price).
Generally individuals will not have direct access to markets. The cost for direct access is incredibly high (NYSE = just one market) charges $11.5 million per year and only allows a set # of people.

So brokers act as a middle man. You place an order (either in person, by phone or more commonly by internet). The broker routes it to the market. Often times stocks will trade of multiple markets so a good broker will determine which market has the best price or if you are asking a specific price (limit) which market is most likely to fulfill that request the quickest.

Commissions are pretty complex but brokers tend to make it simple by charging a flat fee that covers everything.

Example: TD Ameritrade charges $9.99 to execute a trade on any market regardless of if you are adding or taking liquidity and regardless of the number of shares. TD Ameritrade's cost will vary dramatically depending on the size, type, and location of trade.

Of course brokers and markets are only 2 small pieces in the "market".

KEY THING TO REMEMBER:
When you are buying or selling stocks you are buying and selling it to another investor not the "market" or the originating company. So when someone says the market is losing money that is a falsehood. For every loser there is a winner.