The end of trading commissions?

The end of commissions for trading is near as TD Ameritrade cuts to zero, matching Schwab

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KEY POINTS

TD Ameritrade said Tuesday the company will eliminate all commission fees for online U.S. stock, exchange-traded fund and option trades.

Charles Schwab and Interactive Brokers both announced the same commission-free cost structure in the last one week.

“We expect Fidelity and E*TRADE to react next and announce cuts to their own commission rates over the short-term, with both likely matching SCHW’s/AMTD’s zero rate,” said Credit Suisse’s research analyst Craig Siegenthaler in a note to clients titled “Finishing the Race to Zero.”

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https://www.cnbc.com/2019/10/02/the-...ng-schwab.html

Now that a majority of online brokers are moving to zero trade commisions, brokers are become more creative to stay competitive. Robinhood was the original zero commissions king but now that it is available across the board they have advertised a money management program that allows uninvested cash is moved to banks in thier program to pay you 2.05% APY and issue debit cards where there use to be a fee to withdraw cash. Now Charles Schawb is getting creative by allowing investors to buy partial stocks to get they're hands on more expensive stocks like Apple. What will be the next move in the online brokerage world?

The latest in the brokerage wars: Charles Schwab will allow people to buy fractions of stocks

The FRTIB may have to get a little creative if they want us to keep our money in the TSP. They have always said they have the lowest fees compared to anyone else. Keep the fees the same and just give us 2 more IFT's and change the cutoff time to say 3pm EST.

Great point nasa. I wasn't evening think about that.

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Originally Posted by nasa1974

The FRTIB may have to get a little creative if they want us to keep our money in the TSP. They have always said they have the lowest fees compared to anyone else. Keep the fees the same and just give us 2 more IFT's and change the cutoff time to say 3pm EST.

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It looks like Fidelity is forced to match the others. Just got this today...

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Introducing $0 commissions for online U.S. stock, ETFs, and options trades at Fidelity. It’s just one more example of the value you’ll only find at Fidelity. Compare for yourself—in addition to $0 commissions, only Fidelity offers:

MORE VALUE FOR YOUR CASH
When you open a new retail brokerage or retirement account, your cash automatically goes into a money market mutual fund with a current yield of 1.57% (as of 10/17/2019). That’s up to 156x more than you’ll find at other firms.

MORE VALUE FOR YOUR TRADES
Fidelity offers industry-leading price improvement for your trades. We don't take payment for order flow from market makers on your equity trades, and on average, can save $17.20 for a 1,000-share equity order.† With all those savings, last year we gave $635 million back to our customers.

Great value for your trades shouldn’t come with trade-offs. And at Fidelity, you don’t have to compromise.

Consolidate your trading with Fidelity, today.

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Originally Posted by tsptalk

It looks like Fidelity is forced to match the others. Just got this today...

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So how do they make their money, if they aren’t getting any commission?

Are they strictly making money from margin account charges?


Sent from my iPhone using TSP Talk Forums

I wonder if fill prices will be impacted? Your market order to buy gets filled at $29.44 a share instead of $29.43, etc. Just speculating, but this person says they have other revenue streams (obviously). Do these places still manage accounts. Also, some folks may still call in their orders, which is not free.

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A TD Ameritrade spokeswoman said, “With $1.3 trillion in client assets, we have scale and a diverse business model with a range of different revenue streams.” She said the company was committed to the “best execution” of trades and “a consistent, quality and liquid trading experience for our clients.”

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Bank of America joins brokerage wars with unlimited free trades for preferred members

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Another financial giant is adding to the growing consensus that the correct price of a stock trade is zero.

Bank of America said Monday that any customer in its retail banking loyalty program will now get unlimited free trades for stocks, ETFs and options through its Merrill Edge online service.

The lender probably isn’t giving up much in fee revenue with the move: It estimated that 87% of trades from its loyalty group members were already free.

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https://www.cnbc.com/2019/10/21/bank...ee-trades.html

I'm just wondering- with all these companies doing away with any commissions on trades, isn't that going to mean IT DOESN'T COST THE TSP ANYTHING ANYMORE TO MOVE MORE THAN 2 TIMES IN A MONTH?

Yeah, nasa1974 mentioned that the TSP will start to have more competition (esp. from retirees) if they don't make an adjustment.

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Originally Posted by James48843

I'm just wondering- with all these companies doing away with any commissions on trades, isn't that going to mean IT DOESN'T COST THE TSP ANYTHING ANYMORE TO MOVE MORE THAN 2 TIMES IN A MONTH?

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... should mean that (Amen), yet "... going to mean.." ?? don't hold your breath. I'll trade their "costs/fees" in TSP for more trades per month and later daily deadline.

Blackrock?