[rramdin]

Automating the work done by human traders, market makers, and specialists has not only facilitated decimilization resulting in smaller spreads, but also allowed trading fees for the retail investor to reach historic lows (the worst you'll find at a retail brokerage nowadays is about $8/trade, far better than the $35/trade), with many even being free. Wall Street had always been raking in billions in profit from market making activity, if anything that profit margin has been significantly reduced by automating market making.

[stouset]

> ...also allowed trading fees for the retail investor to reach historic lows (the worst you'll find at a retail brokerage nowadays is about $8/trade, far better than the $35/trade

The average retail investor should not be making enough trades for this to matter.

Bringing down the price of trades like this only makes it cheaper for the suckers — day traders — to think they're playing the game. It is of marginal utility for the average retail investor.

[URSpider94]

That's not a fair assessment. Let's say you are doing well and actually investing $1000 per month into the market. Now let's say you are diversifying into three index ETF's, and you buy those quarterly, so that's three trades a quarter on a total of $3,000. If the commission is $35/trade, you are being taxed 3.5% of your investment up-front to get into the market. If the commission is $4/trade (a more typical fee these days), then the up-front loss is 0.4%. You'll pay those same fees again on the way out, and assuming that you sell on the same schedule, that's now 7% vs. 0.8%.

Yes, there's some nice compounding in between, assuming that you buy and hold with no further trades. But, there's a wide gulf between "day trading" and active stock-picking. Assuming that your average hold time is 5 years per stock, you're still going to rack up a lot of commission costs at $35 per trade.