It all started with Charles Schwab announcing that they will eliminate commissions on U.S. stock, ETF, and option trades (they will still charge $0.65 per contract) as of Monday, October 7, 2019. I was then informed that TD Ameritrade has followed suit and will charge $0 commissions as of October 3, 2019.
In the middle of writing this post, I then heard from E*TRADE that they would also reduce their commissions to $0 on Monday. I have an old OptionsHouse account that is now administered by E*TRADE, and was already getting $3.95 trade commission.
So far, there is no news from Fidelity; I assume that they will continue to charge $4.95 per trade. This is another series of moves in the continuing price war among online brokers.
I stopped paying much attention to commissions when they dropped below $20 per trade, saying that "The difference of few dollars is not a big deal." But, it is interesting to note that stock commissions are still going down -- a true race to the bottom. I still remember the days when paying $45-50 per trade was considered very reasonable. We were comparing discount brokerages versus the full service guys at the time.
PFS
Hoping for the Best and Preparing for the Worst
11 hours ago
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1 comment:
PF,
I had been trading free for about year on Merrill Edge. Got used to trading in and out with 5 and less share trades. Now that Schwab (and every other broker) has free trades, I can do the same for my kids accounts, and accounts at other brokers. Lets me scale in and out of a postion gradually, which I like.
Yeah, I also remember when commission had "come down" to $50 a trade with discount brokers. Still I traded in 100 share lots, since it still added $0.50 per share to the cost basis. And it wasn't economical to scale in and out, which was the attraction of mutual funds.
Now I can build a portfolio slowly for our kids, with mutual funds or etfs. Psychologically, reduces the perceived risk of the buy and sell points, for me.
SS
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