Fidelity Joins Commission-Free Trading Craze
- The broker is the fifth US firm in the past month to have launched such a service
Fidelity Investments announced on Thursday that it would be joining the commission-free trading frenzy with its own discount offering for retail traders.
The US broker said that it would not charge any commissions for the trading of stocks, options, and exchange-traded funds. On top of that, the firm promised higher yields for cash deposits and better Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term speeds.
Fidelity even put a number to its claims, saying that it will provide 1.58 percent interest to clients via a money-market fund.
“With this decision, Fidelity is taking a different path," said Kathy Murphy, president of personal investing at Fidelity.
"We are providing customers unmatched value while challenging industry practices that appear to give value in one place when they are actually having customers pay in other ways.”
Jumping on the bandwagon
Fidelity is the latest in a series of US retail brokers to have started offering a commission-free trading service.
In the past month, E*TRADE, TD Ameritrade, Charles Schwab and Interactive Brokers have all launched a similar set of products.
The shift in the retail trading industry is indicative of just how seriously these firms are taking nascent Stock Brokers Stock Brokers A stock broker is a company, individual, or entity that is authorized to buy and sell stocks or other financial instruments. Brokers’ main function includes buying and selling orders on a trader’s behalf. Through innovation and a byproduct of us residing with the technology era, more and more traders are beginning to open brokerage accounts with online brokers.In the past, many brokers accrued money through charging a commission on every trade but as competition has strengthened and technology h A stock broker is a company, individual, or entity that is authorized to buy and sell stocks or other financial instruments. Brokers’ main function includes buying and selling orders on a trader’s behalf. Through innovation and a byproduct of us residing with the technology era, more and more traders are beginning to open brokerage accounts with online brokers.In the past, many brokers accrued money through charging a commission on every trade but as competition has strengthened and technology h Read this Term like Robinhood and Acorns, the former having pioneered commission-free trading in the US.
Some controversy remains around the business model, however, with many pointing out that such offerings generally have a catch to them. Robinhood, for example, sells vast swathes of client order flow to high frequency trading firms. Others charge for bonus features and better execution.
Fidelity Investments announced on Thursday that it would be joining the commission-free trading frenzy with its own discount offering for retail traders.
The US broker said that it would not charge any commissions for the trading of stocks, options, and exchange-traded funds. On top of that, the firm promised higher yields for cash deposits and better Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term speeds.
Fidelity even put a number to its claims, saying that it will provide 1.58 percent interest to clients via a money-market fund.
“With this decision, Fidelity is taking a different path," said Kathy Murphy, president of personal investing at Fidelity.
"We are providing customers unmatched value while challenging industry practices that appear to give value in one place when they are actually having customers pay in other ways.”
Jumping on the bandwagon
Fidelity is the latest in a series of US retail brokers to have started offering a commission-free trading service.
In the past month, E*TRADE, TD Ameritrade, Charles Schwab and Interactive Brokers have all launched a similar set of products.
The shift in the retail trading industry is indicative of just how seriously these firms are taking nascent Stock Brokers Stock Brokers A stock broker is a company, individual, or entity that is authorized to buy and sell stocks or other financial instruments. Brokers’ main function includes buying and selling orders on a trader’s behalf. Through innovation and a byproduct of us residing with the technology era, more and more traders are beginning to open brokerage accounts with online brokers.In the past, many brokers accrued money through charging a commission on every trade but as competition has strengthened and technology h A stock broker is a company, individual, or entity that is authorized to buy and sell stocks or other financial instruments. Brokers’ main function includes buying and selling orders on a trader’s behalf. Through innovation and a byproduct of us residing with the technology era, more and more traders are beginning to open brokerage accounts with online brokers.In the past, many brokers accrued money through charging a commission on every trade but as competition has strengthened and technology h Read this Term like Robinhood and Acorns, the former having pioneered commission-free trading in the US.
Some controversy remains around the business model, however, with many pointing out that such offerings generally have a catch to them. Robinhood, for example, sells vast swathes of client order flow to high frequency trading firms. Others charge for bonus features and better execution.