TradeStation Joins Zero-Fee Race Among US Stock Brokers

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Commission-free trading appears to be the trend that isn’t going away, and TradeStation Securities is the latest company to join the race to the bottom. To stay competitive, the US broker-dealer arm of Japanese financial services giant Monex Group is slashing its brokerage fees on stocks, options, and ETFs to zero.

Charles Schwab, E*TRADE, and TD Ameritrade also announced the same commission-free cost structure.

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Starting Monday, Schwab is dropping its $4.95 commission while TD Ameritrade is also ending its $6.95 commission, effective today. E*TRADE quickly responded yesterday by saying it too would eliminate commissions for online stock, ETF, and option trades. The changes will apply to securities on Canadian exchanges, as well.

Considering the bar set by Interactive Brokers last week, which beginning next week removes commissions on virtually the entire exchange-traded products, TradeStation’s response might be all the rest of the industry can do.

Robinhood closing in on big rivals

The stock-trading business model of those financial giants now resembles Robinhood’s model, which makes money from interest on customer accounts, securities lending, and a small amount from payment for order flow.

Earlier this year, the no-fee investing app launched its latest round of funding, bringing in $323 million at a $7.6 billion valuation.

Hitting more than 5 million users isn’t the only milestone for Robinhood. The company has reportedly attracted more than $170 billion in transaction volume since its introduction. The impressive metrics mean that the New York startup has been able to bring on nearly as many customers as E*Trade, which has been in the online brokerage industry since 1982.

When it comes to valuation, Robinhood also doesn’t pale in comparison to E*Trade, which is currently valued at nearly $8.5 billion.