When trading looks free
Neobrokers: one venue, and where the cost really sits
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A trade that costs nothing still has to pay for an app, a licence and several hundred staff. Following that money explains almost every design decision in a modern neobroker.
AI Mentor here. 🧠 Everything so far has been about CFD dealers. Now the other family — the app that shows you real shares and ETFs for €1 or nothing at all.
These firms are genuinely different. You really do own the share. And the cost is genuinely real — it has just been moved somewhere you are less able to compare.
The trick is the venue, not the ticket
A traditional broker offers you a choice of exchanges and charges a fee for the service. A neobroker typically routes everything to one venue it has an arrangement with, and charges you little or nothing for the ticket.
In German-speaking markets that venue is usually Gettex or LS Exchange rather than Xetra, the reference market. That is not hidden — it is in the pricing page — and it is the whole architecture of the business.
Where the money is
Three places, and only the first is obvious.
The spread at the venue. A single venue quoting both sides earns the difference. On a liquid ETF in market hours that difference is tiny. On a smaller stock, or outside the reference market's hours, it is not — and it is charged to you as a worse price rather than as a fee.
Arrangements with the venue. Historically, venues paid brokers for directing order flow to them — payment for order flow. It funded the commission-free model outright.
Everything that is not trading. Interest on uninvested cash, securities lending, savings plans, premium tiers, FX conversion on foreign stocks, and increasingly crypto. For several of these firms this is now the larger half of revenue.
Cash sitting in your account earns the broker the prevailing rate. In a zero-rate world that was worth nothing; at 3–4% it is meaningful money on every idle euro, and it does not appear anywhere in a fee comparison.
What the EU changed
Payment for order flow is being phased out across the EU, with a deadline of mid-2026 and several member states moving earlier. The reasoning was straightforward: a broker paid by a venue has an incentive to route to the payer rather than to the best price.
The interesting part is what happened next. The firms did not disappear, because PFOF was never their only revenue — and the shift had already begun as interest rates rose. What changed is the mix, which is why you have seen so much recent noise about savings plans, interest on cash, and premium subscriptions.
When one revenue line is closed off, the others get larger. A commission that stays at zero while the venue's spread widens has not gone anywhere.
How to compare them honestly
Fee tables are the wrong tool here, because the fee is not where the cost is. Four things are worth checking instead.
• Which venue, and its hours. Trading a German stock at 22:00 on a venue whose reference market closed at 17:30 means the quote has nothing to anchor to. The spread will show it.
• The spread against the reference market. Open the same instrument on Xetra and on your broker's venue during market hours and compare. This takes a minute and it is the real price of "free".
• What happens to idle cash. Is interest paid to you, partly, or not at all? On a meaningful balance this dwarfs any per-trade fee.
• FX on foreign shares. A US stock bought in euros involves a currency conversion, and that margin is frequently larger than the commission the firm proudly does not charge.
None of this makes them bad
It is worth ending plainly, because this lesson is easy to misread as an accusation.
For a long-term investor buying a broad ETF once a month, a neobroker is often genuinely the cheapest option available — the spread on a liquid ETF in market hours is small, and a commission of zero against €5 elsewhere is a real saving repeated a hundred times.
The model becomes expensive for a different customer: someone trading frequently, in small stocks, or outside reference-market hours. The question is never "is this broker cheap" but "is it cheap for what I do".
One lesson left, and it turns all of this into something you can check in an afternoon: the documents every broker has to publish.
See you on the desk. — AI Mentor