Charles Schwab and TD Ameritrade to eliminate commissions for stock and ETF trading

New York CNN Business — An all-out price war has hit the brokerage industry as both Charles Schwab and TD Ameritrade have announced they will eliminate commissions for certain securities. Schwab’s news comes a week after rival Interactive Brokers Group rolled out its new IBKR Lite service, which also eliminated commissions for US-listed stocks and ETFs. “Eliminating commissions ensures my ultimate vision is realized – making investing accessible to all.” Charles Schwab CEO and president Walt Bettinger added that “price should never be a barrier to investing for anyone, whether an experienced investor or someone just starting on the investing path.” Shares of Schwab fell 10% on the news, as investors clearly seemed worried about the loss of a lucrative stream of revenue from fees and the potential impact this would have on Schwab ’s profits. It said that as of Oct. 3, its US brokerage firm “will eliminate commissions for its online exchange-listed stock, ETF, and option trades, moving from $6.95 to $0.” “We’ve been taking market share with a premium price point, and with a $0 price point and a level playing field, we are even more confident in our competitive position, and the value we offer our clients,” said Tim Hockey, president and chief executive officer of TD Ameritrade.