Zero Brokerage Is Not a Discount

I get the same question almost every week. Someone tries BondScanner, picks a bond, sees the price, and writes back: "there's no fee? what am I missing?"

Nothing. There's no catch. We just don't charge brokerage on bond trades.

That sentence sounds like marketing. It isn't. It's the most consequential decision we made about how this company gets built, and a decade from now I think it'll still be the one we're most defined by.

Here's why.

If you charge half a percent or two percent on every bond trade, your platform stops being neutral the moment your investor opens it. It becomes a machine that rewards whichever bond pays you the most to surface. The credit comparison still looks objective. The screener still feels like a tool. But the bond with the better YTM and the worse take to you quietly doesn't make the cut, and the user never knows it was supposed to.

I don't think most people running these platforms are bad actors. I genuinely don't. The problem isn't intent. It's that you can't put an incentive that big at the bottom of a product and expect the product not to bend toward it. It always does. Slowly enough that nobody on the team notices, fast enough that the user feels something off six months in and can't quite name it.

So before we picked a colour, before we hired a designer, before any of the polished stuff, we agreed we were not going to earn a brokerage on the trade.

It sounds dramatic. In practice it's just a guardrail. But it forced everything downstream of it. If we couldn't make money from the click, the screeners had to actually be good. The yield curve had to be live. The credit comparison had to be honest about both bonds. The newsletter had to be a piece of writing, not a pitch. Everything that pretends to be useful on a fee-driven platform has to actually be useful on ours because nothing else is doing the convincing.

People bring up Zerodha when they hear this and they're right to. Ten years ago Nithin Kamath made the same kind of decision in equities no brokerage on delivery and the entire industry told him he was lighting money on fire. He went on to build the rails underneath: clearing, mutual funds, education, the API ecosystem, the whole thing. The move that looked like leaving money on the table was the only one that let him build the next ten layers.

I don't want to overdo the parallel. Bonds aren't equities. The OBPP framework is younger, the secondary market is thinner, the asset class behaves differently in retail hands. But the architectural lesson holds: the company you become when you don't charge per click is a different company.

The follow-up question, if you're being honest about it, is how we make money.

There are real margin layers in fixed income: primary issuance, market-making, settlement, the wholesale spread between buyer and seller. None of these are directly charged to the retail user. They've existed for decades; institutions pay for them every day. We earn from parts of the bond market the user wasn't paying for directly, rather than from the trade itself. The downstream economics are tighter. The relationship with the person on the other side of the screen is a lot cleaner.

Some weeks I wonder if we made it harder on ourselves than we needed to. There's an easier version of BondScanner where we charge twenty basis points and nobody really notices and the unit economics get fatter overnight. I think about it more than I'd admit on a podcast. But every time I work the logic through, the same answer falls out the moment we charge, the screen starts choosing for the user. And then we're the same as everyone else, just with better fonts.

That's all this is, really. Not a price. Not a promotion. A line we drew about who the platform is for. The user pays nothing on the trade because we never wanted to end up in a position where we had to convince ourselves the bond we were showing her was the right one for her portfolio, when really it was the best one for us.

So when someone asks what the catch is, the most honest answer I have is: there isn't one. We just decided early to be the kind of platform that doesn't have one.