Schwab is eliminating commissions

status1

Member
I heard on CNBC that Schwab is cutting the commissions again this time to zero for stocks and just 0.65 cents per contract on options
A lot of the brokerages were down on that news
Schwab can afford it because they have other income but I am not sure if the other brokerages can compete with that
 

tom

Administrator
Staff member
Interactive Brokers did this recently too. I suspect Schwab had to react to IB doing it.
 

JackW

New member
TD Ameritrade joined the gang this evening. Free commission stocking trading and all options commissions reduced to 65c per contract, no ticket charge, no assignment fees. Incredible. This is serious competition! What is the catch?
 

status1

Member
I guess now we will see more mergers now
I suspect TD or one of the other brokerages will buy Robinhood and get all their customers
 

jim leahy

Member
barrons had an article on this subject in this week's edition. they speculated that
there will be other changes coming in the future. they speculated that subscription-based
trading could appear, where frequent traders, who require tools and data, would pay
a monthly fee, and others would get free commissions. they cited interactive brokers
was already planning on a lite and pro version of its trading system. pro customers
would pay commissions and get better executions, the others get free commissions.

it seems either way we'll not be getting "free" trading.
 

status1

Member
I am sure Schwab will have free trading as they are not dependent on commissions but other brokers may look to add some other fees back in
I heard on the Trading group 1 where it was mentioned that there may be some platform fees for those who want to use it
I know Etrade when they first announced to lower their commissions first they had just the trade commission the per option contract fee and the opt reg fee than later on they started adding in the index fee per option as a separate charge

Etrade already has a tiered rate where you need to make 30+ trades per quarter to get the lowered rate of $4.95 otherwise it's $6.95
So it could be that now you still need to make 30+ trades to get the 0 commission or some other combination that makes money for them

We will see what the bottom line will be
 

status1

Member
So now Schwab and TD Ameritrade have equally low commissions
As I suspected Etrade is still charging a separate index fee so for SPX it's effectively $1.01 per option contract
Fidelity who has not lowered their commissions are only 0.23 cents more than Etrade for 7 put spreads so I don't see them lowering their commissions
Tastyworks is still more expensive than all of them until you get over the $10 cap
 

KevinK

New member
Don't know if this helpful for anyone, but I trade at Etrade and TD. I've found that TD consistently has worse fills than E-trade, which is why I don't trade much size at TD anymore, even though the per contract fee at TD is better than Etrade. For RUT it's about the same for me since I have a lower negotiated rate and the RUT fee is only .18

Even before the zero commissions, TD had worse fills and since then it has not gotten any better. I find that I often have to move my price up to get a fill, or it will just sit at the midprice for a while with no takers. I don't have this issue at Etrade. And I've tested with various underlyings often putting both trades on at both brokers. That said TD has better software for analysis and charting so I still use TOS extensively.

Hope that helps anyone.
 

status1

Member
I also use both brokers but I have not noticed any difference in fills I only trade spx so I am not sure if that makes any difference I like TD because I believe it shows a fair mid price for spreads so I use that as a reference as a fill price for the other brokerages
Some other brokerages just have the bid and ask so I have to calculate what the mid should be but since I know what it is from TD that is what I use Most of the time I get filled at the mid but sometimes by the time I log into the other brokerage the price has moved so I may get a better or worse fill but that's because the price has moved and not because the brokerage is trying to play games
If I place an order before the open and it gets filled and they all get filled at the same time and at the same price
So I can't say I noticed any unusual fills
Perhaps there may be a difference on some other underlying but I see no difference with spx
 
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