Commission rate refers to the ratio between the transaction fees charged by brokers or dealers and the transaction amount in the financial market. This ratio is usually expressed as a percentage, which is used to measure the cost and benefit of services provided by brokers or traders.

In the stock, foreign exchange, futures, options and other trading markets, investors need to complete the transaction through brokers or dealers. These brokers or dealers usually charge a certain transaction fee, that is, commission. The proportion of commission will affect the transaction cost of investors, and then affect their return on investment.

For example, suppose an investor wants to buy 100 shares of a company, the stock price is 10, and the brokerage commission rate is 0.5%. Then, the commission that investors need to pay is:

Commission = share price × purchase quantity × commission ratio

Commission = 10 USD × 100 shares× 0.5%.

Commission = $5

In this example, the investor needs to pay a commission of $5 to the broker to complete the stock purchase transaction.

It should be noted that the commission ratio of different brokers or dealers may be different. Investors can compare when choosing brokers or dealers to find the service that best meets their needs and budgets. At the same time, the commission ratio is only one factor in choosing brokers or dealers, and investors also need to consider other factors, such as service quality, trading tools and market coverage.