Schwab Announces Zero Commission Stock Trades--E*Trade and TD Ameritrade Tanking

Charles Schwab is ending commissions on stock trading and the brokerage shares are tanking.


* Starting on October 7, Charles Schwab will be slashing its online trading commissions for U.S. stocks, ETFs and options from the previous $4.95 to zero.

* Shares of Schwab fell 7% in response to the move. Competitor TD Ameritrade lost 20%, its worst day since 2006.

* Stock trades previously cost $4.95 on the Schwab platform.

Charles Schwab said on Tuesday that it is ending commissions for online trading in U.S. stocks, exchange-traded funds and options, the culmination of a years-long fee battle in the brokerage industry.

Shares of Schwab fell nearly 8% on fears the change will hit margins. The broker said commissions fees make up 3% to 4% of net revenue each quarter. Rival brokerage firm TD Ameritrade plummeted more than 20% for its worst day in 13 years. E-Trade shares cratered more than 18%, on pace for its worst day since 2009.

https://www.cnbc.com/2019/10/01/char...-and-etfs.html