A Markup is the difference between the market price of a security personally held by a broker-dealer and the price paid by a customer. Markups are a legitimate way for broker-dealers to make a profit on the sale of securities. However, some customers may feel like they are being taken advantage of when they see the markup amount.Here are three things to keep in mind about markups: -1- The size of the markup will vary depending on the security being traded and the current market conditions.2- Broker-dealers are required to disclose their markups upfront, so you can always know how much you're paying before making a trade.3- While markups may seem high, remember that you're also paying for access to expert advice and guidance from your broker-dealer - something that's worth its weight in gold during volatile markets.
