Charles Schwab Ending Online Trading Commissions on U.S.-Listed Products

[winb83]

Shots fired at the rest of the industry. The day will soon come where stock trades are free everywhere.
Charles Schwab Ending Online Trading Commissions on U.S.-Listed Products

 

[winb83]

It's happening that fast.TD Ameritrade is also going commission free.

 

[Skooby]

E-Trade, Ameritrade, Interactive Brokers slammed as Schwab drops trading commissions

I came in here to post this.

I have Schwab. I wonder what this does to Robinhood.

 

[drifter]

E-trade drops commissions, who's left?

E-Trade drops commissions on trades, joining Schwab, TD Ameritrade in brokerage fee war

 

[winb83]

E-Trade, Ameritrade, Interactive Brokers slammed as Schwab drops trading commissions

I came in here to post this.

I have Schwab. I wonder what this does to Robinhood.

It will murder them. I expect Fidelity to respond this week. I'll be moving my assets over to them when they do.

 

[Tug life]

Robinhood totally disrupted the industry now everyone is forced to respond. And it not just RH it's all the smaller no commission online brokerages that have been taking market share. Robinhood is a favorite among millennials and new investors so they won't suffer too bad from this

 

[winb83]

Robinhood totally disrupted the industry now everyone is forced to respond. And it not just RH it's all the smaller no commission online brokerages that have been taking market share. Robinhood is a favorite among millennials and new investors so they won't suffer too bad from this

In the face of real brokerages giving zero commission trades Robinhood isn't worth using. Robinhood still doesn't have stuff like drip share purchases with dividends. Also unlike M1 Finance and SoFi they don't offer partial share purchases. With SoFi I can but $1 of Google and up. Minimum share purchase is $1.

I don't see how people use that brokerage now. What are the real perks?

 

[Tug life]

In the face of real brokerages giving zero commission trades Robinhood isn't worth using. Robinhood still doesn't have stuff like drip share purchases with dividends. Also unlike M1 Finance and SoFi they don't offer partial share purchases. With SoFi I can but $1 of Google and up. Minimum share purchase is $1.

I don't see how people use that brokerage now. What are the real perks?

They've already built a pretty large user base and they have a niche. Simple easy to use platform for young people and new investors. A lot of young investors see some of those brokerages as old school and complicated. Some people just want to buy and sell and look at basic charts. Serious investors and older investors will still continue to use the other brokerages, but Robinhood has built a brand that appeals to millennial and new investors. I also don't understand the point of buying partial shares and personally don't see that as a deal breaker.

The only thing that I believe will crush Robinhood is a recession, since they haven't been through one yet it'll be interesting to see how the hold up when people start to withdraw their money in droves. All the big brokerages have been through a recession before so to me, that more than anything would be the death of Robinhood. But that's just my opinion so we'll have to wait and see

 

[Pimp]

My 2 years of free trades with fidelity just ended.. I'm about to move to one of these commission free accounts.

 

[Ghostface Trillah]

You sound like a dude who hates Robinhood but is too cheap to pay for trades anywhere else.

They aren't doing this to spite Robinhood, they're doing this because of Robinhood. Robinhood revolutionized stock trading. They didn't lower the bar,they got rid of it and now all these big investment firms are scrambling to keep up. Charles Schwab was one of the first firms saying that Robinhood is stupid and that free trades wouldn't work and will fail miserably. Now look at them.

 

[winb83]

They've already built a pretty large user base and they have a niche. Simple easy to use platform for young people and new investors. A lot of young investors see some of those brokerages as old school and complicated. Some people just want to buy and sell and look at basic charts. Serious investors and older investors will still continue to use the other brokerages, but Robinhood has built a brand that appeals to millennial and new investors. I also don't understand the point of buying partial shares and personally don't see that as a deal breaker.

The only thing that I believe will crush Robinhood is a recession, since they haven't been through one yet it'll be interesting to see how the hold up when people start to withdraw their money in droves. All the big brokerages have been through a recession before so to me, that more than anything would be the death of Robinhood. But that's just my opinion so we'll have to wait and see

If you want to buy into Amazon on some of those platforms $1-$10 gets you started on a position. With Robinhood you’re paying that full $1700+ or you can’t invest on the platform.

if you can’t buy partial shares how do you reinvest your dividends on a platform that doesn’t have drip reinventing? You have to leave that money sitting in the account until it amounts to enough to purchase a full share of something you want. A share of AT&T gives 0.51 a quarter. At a dollar on SoFi you can buy a partial share and put that money to work and I believe it’s $10 on M1. On Robinhood you’ll need to get the full $37 by adding more money to the account or you’re losing on the compound interest of your dividends.

Lately I been taking my dividends and spare change left over after purchases and pooling that money into Google. I’m up to 26% of a full share.

Robinhood doesn’t have such features because they profit off the small amount of dividends all their low value accounts build.

 

[KING WILL]

Both sides makes good points. I like this discussion .

I don't think RH is going to feel this shirt term. RH made is easy/cool for young and/or uniformed people to buy stocks. A lot of that demographic don't care about reading charts and all that jazz.

I think as those young folks settle into their careers, start making more money, and maybe turn into a more serious investor one of bigger brokerages might become more attractive to them. But, buy then its quite possible that RH can catch up.

But like homie pointed out, fractional shares a huge. Places like Stockpile ans Sofi gets my business and that's one of the reasons why.

***OAN these larger brokerages must be feeling the effects of RH to be waiving their fees tho! ***Unless they are doing it as an preemptive strike for future investors.

 

[Tug life]

I would argue that brokerages like Merrill lynch who still charge fees will feel it more than anything. Now you have other reputable brokerages with no commission

 

[Skooby]

I have both Ally Invest and Charles Schwab. I bank with Ally so I got Ally Invest for convenience.

However, they don't have penny stocks. And they charge an extra fee for stocks under $2.00. So I trade with Schwab.

I wonder when Fidelity and Merrill Edge will drop their commissions?
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Ally Invest joins list of brokerages eliminating commissions on online stock, ETF, option trades
The firm’s long-standing per trade price of $4.95 will be reduced to $0, effective October 9, 2019.

Ally Invest, the online brokerage and wealth management arm of Ally Financial Inc (NYSE:ALLY), has become the latest brokerage to announce the introduction of zero commissions on US exchange-listed stock, ETF, and option trades.

The firm’s long-standing per trade price of $4.95 will be reduced to $0, effective October 9, 2019. Clients trading options will pay a contract fee of $0.50.

“With continued advancements in technology making online trading increasingly more cost-efficient, it was inevitable our industry would reach a point where self-directed investors could participate in the market for little to no cost,” said Lule Demmissie, president of Ally Invest.

Recently, Ally Invest announced its zero-advisory fee Managed Portfolios with a high-yield cash allocation. These portfolios give investors the opportunity to try-before-they-buy without commitments until they are ready to be more fully invested with Ally. Similar to the firm’s existing “robo” offerings, the new advisory fee-free Managed Portfolios are ETF-based, and they include a 30% allocation to high-interest-yielding cash as a buffer.

TradeStation Securities, Inc., a subsidiary of Monex Group, Inc. (TYO:8698), has also announced that it is eliminating the commission for trading of certain assets to zero. The online trading company will be offering commission-free trading to customers who use its web and mobile platforms for exchange-listed stocks, options and exchange-traded funds (ETFs). Customers trading options will continue to pay $0.50 per contract without a commission charge. The new commission-free offering on the TradeStation web and mobile platforms is branded TSgo.

Earlier this week, major brokers, such as TD Ameritrade and Charles Schwab, said they were eliminating commissions for trading exchange-listed stocks, options and ETFs.

 

[theworldismine13]

If you want to buy into Amazon on some of those platforms $1-$10 gets you started on a position. With Robinhood you’re paying that full $1700+ or you can’t invest on the platform.

if you can’t buy partial shares how do you reinvest your dividends on a platform that doesn’t have drip reinventing? You have to leave that money sitting in the account until it amounts to enough to purchase a full share of something you want. A share of AT&T gives 0.51 a quarter. At a dollar on SoFi you can buy a partial share and put that money to work and I believe it’s $10 on M1. On Robinhood you’ll need to get the full $37 by adding more money to the account or you’re losing on the compound interest of your dividends.

Lately I been taking my dividends and spare change left over after purchases and pooling that money into Google. I’m up to 26% of a full share.

Robinhood doesn’t have such features because they profit off the small amount of dividends all their low value accounts build.

wait are you sure you can buy partial shares on other platforms? i thought that could only happened when you reinvest dividends

but either way dividend reinvestment is just one particular strategy, not everybody does it, it is just a weakness that Robinhood has that im sure they are working on but they have built up a base so I dont think they are going anywhere, robinhood is much easier to use than any other brokerage and they arent going for the sophisticated investor