Commission-free trading appears to be the trend that isn’t going away, and is the latest company to join the race to the bottom. To stay competitive, the US broker-dealer arm of Japanese financial services giant Monex Group is slashing its brokerage fees on stocks, options and ETFs to zero.
, E*TRADE and TD Ameritrade also announced the same commission-free cost structure.
Starting Monday, Schwab is dropping its $4.95 commission while is also ending its $6.95 commission, effective today. quickly responded yesterday by saying it too would eliminate commissions for online stock, ETF and option trades. The changes will apply to securities on Canadian exchanges as well.
Considering the bar set by last week, which beginning next week removes commissions on virtually the entire exchange-traded products, TradeStation’s response might be all the rest of the industry can do.
“By offering commission-free trading to our customers on our web and mobile platforms, we’re breaking down yet another wall to help traders access the markets,” said John Bartleman, President of TradeStation Group.
Robinhood closing in on big rivals
The stock-trading business model of those financial giants now resembles Robinhood’s model which makes money from interest on customer accounts, securities lending, and a small amount from payment for order flow.
Earlier this year, the no-fee investing app raised its latest round of funding, bringing in $323 million at a $7.6 billion valuation.
Hitting more than 5 million users isn’t the only milestone for Robinhood. The company has reportedly attracted more than $170 billion in transaction volume since its introduction. The impressive metrics mean that the New York startup has been able to bring on nearly as many customers as E*Trade, which has been in the online brokerage industry since 1982.
When it comes to valuation, Robinhood also doesn’t pale in , which is currently valued at nearly $8.5 billion.
Be First to Comment