E*TRADE Joins No-Fee Trading Craze as Rivals Race to Bottom
- E*TRADE CEO said the commissions cut will cost the company as much as $75 million in quarterly revenue.
Hours after Charles Schwab and TD Ameritrade eliminated commissions for Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term of some stocks and funds, E*TRADE (NASDAQ: ETFC) matched the move in one of the most dramatic moves in a broad-based price war.
In addition to other features, the brokerage is also slashing the fees it charges on options to $0.65 per contract while maintaining its active trader pricing at $0.50 per contract as of October 7, according to a statement today.
“The Company recently lowered several investing barriers including: A new $500 minimum for Core Portfolios, $500 minimum for Prebuilt Mutual Fund Portfolios, and $25 minimum for automatic investing recurring deposits,” it further states.
E*TRADE CEO Mike Pizzi said in a statement that the commissions cut would cost the company as much as $75 million in quarterly revenue, which is the equivalent to about three percent of total net revenue.
The move by E*TRADE escalates the price war among US major brokers, which was initiated last week after Interactive Brokers introduced IBKR Lite, which provides commission-free, unlimited trades on US stocks and ETFs.
Shares of retail brokerage firms TD Ameritrade, Charles Schwab, and E-Trade Financial all traded down upon the announcement, signaling that investors think these steps are squeezing their profitability.
Zero-commission craze takes hold
Charles Schwab Corp also announced yesterday its own commission-free stock trading offering, reducing the fee it charges from next week to zero from $4.95 per trade.
"It has seemed inevitable that commissions would head towards zero, so why wait?” the company CFO said while explaining his firm's reasoning behind the price cuts.
Online stock trading has become much more competitive since Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term firms like Robinhood emerged to meet the growing demand for cheaper or entirely free investment products.
Earlier this year, the discount brokerage giant has already expanded the number of ETFs that customers can access without commissions. E*TRADE wasn’t the only brokerage to offer zero-commission as the company is tussling with rivals to expand low-cost investment products. Big rivals, including Charles Schwab and TD Ameritrade, also announced the expansion of its own similar offerings, increasing the total number of ETFs that don’t have a commission attached to them.
Hours after Charles Schwab and TD Ameritrade eliminated commissions for Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term of some stocks and funds, E*TRADE (NASDAQ: ETFC) matched the move in one of the most dramatic moves in a broad-based price war.
In addition to other features, the brokerage is also slashing the fees it charges on options to $0.65 per contract while maintaining its active trader pricing at $0.50 per contract as of October 7, according to a statement today.
“The Company recently lowered several investing barriers including: A new $500 minimum for Core Portfolios, $500 minimum for Prebuilt Mutual Fund Portfolios, and $25 minimum for automatic investing recurring deposits,” it further states.
E*TRADE CEO Mike Pizzi said in a statement that the commissions cut would cost the company as much as $75 million in quarterly revenue, which is the equivalent to about three percent of total net revenue.
The move by E*TRADE escalates the price war among US major brokers, which was initiated last week after Interactive Brokers introduced IBKR Lite, which provides commission-free, unlimited trades on US stocks and ETFs.
Shares of retail brokerage firms TD Ameritrade, Charles Schwab, and E-Trade Financial all traded down upon the announcement, signaling that investors think these steps are squeezing their profitability.
Zero-commission craze takes hold
Charles Schwab Corp also announced yesterday its own commission-free stock trading offering, reducing the fee it charges from next week to zero from $4.95 per trade.
"It has seemed inevitable that commissions would head towards zero, so why wait?” the company CFO said while explaining his firm's reasoning behind the price cuts.
Online stock trading has become much more competitive since Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term firms like Robinhood emerged to meet the growing demand for cheaper or entirely free investment products.
Earlier this year, the discount brokerage giant has already expanded the number of ETFs that customers can access without commissions. E*TRADE wasn’t the only brokerage to offer zero-commission as the company is tussling with rivals to expand low-cost investment products. Big rivals, including Charles Schwab and TD Ameritrade, also announced the expansion of its own similar offerings, increasing the total number of ETFs that don’t have a commission attached to them.