The price war between Fidelity and Charles Schwab is puzzling. Do you think its designed to undermine the TD and Scottrade deal?
The Price War
- Thread starter Stocktracker
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Tastyworks has been taking some credit for this happening. They have low fees and used to be part of TD Amertrade (with their Dough product), but broke away and formed their own brokerage. I never understood how some brokers could justify trading $7 or $10 per trade when so many resources are available for free on the internet. The other part is that many (most?) retail investors have been going into ETFs and Fidelity / Vanguard and now even IB have commission-free ETF products. So many investors probably just trade those and don't pay fees. Other speculation is that with market running up, the brokers want to suck in as many retail customers before the next crash...easier to attract investors in a strong market than weak. And also once the market crashes, many investors will be stuck in positions and won't even consider leaving until they can close their losses for a profit.
True story - with interest very likely to raise a few times the brokers are back to making a killing on interest. If you have a sizeable amount of cash in a broker account sitting idle than you should know your brokers cash sweep rate - most brokers pay nada - only a few offer a decent sweep rate which can add up to a considerable amount.
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FT180, Jacobson and Comagnum, you guys rock! Great analysis no matter how you dice it. In addition, I love this part of FT180 analysis “Other speculation is that with market running up, the brokers want to suck in as many retail customers before the next crash...easier to attract investors in a strong market than weak. And once the market crashes, many investors will be stuck in positions and won't even consider leaving until they can close their losses for a profit. “ Its so true!
I agree, it basically kind of came out of nowhere in one swoop overnight.
Usually this industry is slow and conservative with changes.
Schwab now charges $4.95/trade, plus .65 per option contract.
Fidelity also now charges $4.95/trade, plus .65 per option contract.
Etrade is even better, charges $4.95/trade, plus .50 per option contract.
They all use to charge around high retail $10 per trade.
I currently use Tradeking, which I've been getting those rates already. But now they're the same, I'm kind of wanting to switch to a bigger, more main name.
If anyone has experience trading with those three brokerages above...Which one is the best
I personally bank and swing trade with Schwab. Their Street Smart Edge platform is top of the line and they have excellent stock and option screener. They offer first rate educational materials and customer service. And you can trade with them almost everything that can be traded. In addition, your money is in good hands with charley! I can not say that about many others!I agree, it basically kind of came out of nowhere in one swoop overnight.
Usually this industry is slow and conservative with changes.
Schwab now charges $4.95/trade, plus .65 per option contract.
Fidelity also now charges $4.95/trade, plus .65 per option contract.
Etrade is even better, charges $4.95/trade, plus .50 per option contract.
They all use to charge around high retail $10 per trade.
I currently use Tradeking, which I've been getting those rates already. But now they're the same, I'm kind of wanting to switch to a bigger, more main name.
If anyone has experience trading with those three brokerages above...Which one is the best
I trade futures with IB I love their Chart Trader and Book Trader. I just do not like the fact that they do not have good track record with the CFTC.