US Trading Commissions Melting Away

[taxout]

Schwab and TD-Ameritrade have both just announced zero commissions on most US equity and fund trades. Not clear in the case of Schwab if this applies to those with accounts at Schwab HK and other foreign branches.

 

https://www.cnbc.com/2019/10/02/the-end-of-commissions-for-stock-trading-is-near-as-td-ameritrade-cuts-to-zero-matching-schwab.html

 

Not that I understand the economics of how they stay in business this way. But I wonder whether some of Schwab's other freebies -- like refunds on foreign ATM fees -- might be, in the way they usually call such things "restructured" soon.

[swissie]

Plenty of Internet Trading Platforms around that don't charge any commission. They make their money with the Bid/Ask spread.

[taxout]

So far as I can gather, Schwab doesn't match trades itself. That is, it doesn't work like TransferWise works in foreign exchange. However, it seems that Schwab does get a kickback of the spread from the market makers it does use, so customer trades do generate revenue for Schwab even in a "zero commission" environment. I hadn't realized before that Schwab and other brokers had these kinds of arrangements with market makers.

[swissie]

1 hour ago, taxout said:

So far as I can gather, Schwab doesn't match trades itself. That is, it doesn't work like TransferWise works in foreign exchange. However, it seems that Schwab does get a kickback of the spread from the market makers it does use, so customer trades do generate revenue for Schwab even in a "zero commission" environment. I hadn't realized before that Schwab and other brokers had these kinds of arrangements with market makers.

Nothing new. Major brokerages and "market-makers" have always been good "bed-fellows".

[moontang]

Transfer wise is not a good comparison with bid/ask usually a penny apart since decimalization of the stock exchanges.  Much more scamming in the days of 1/8s and even 1/16ths.

Edited October 2, 2019 by moontang

[gk10002000]

On 10/2/2019 at 7:41 AM, swissie said:

Plenty of Internet Trading Platforms around that don't charge any commission. They make their money with the Bid/Ask spread.

Etrade just announced no fees on most trades. 

[moontang]

Tdameri trade allows you to watch live cnbc from their app.. 100% free, and works in LOS.  Not That I drink their Koolaid, but it is a good news source, now that the free and almost free days of Bloomberg and Fox are gone. 

[William Osborne]

1 hour ago, moontang said:

now that the free and almost free days of Bloomberg and Fox are gone. 

I find its best to avoid these types of news outlets.....talking heads babbling away just making noise ...not to mention the guests they bring on pushing their own agenda, company or funds.

[moontang]

1 hour ago, William Osborne said:

I find its best to avoid these types of news outlets.....talking heads babbling away just making noise ...not to mention the guests they bring on pushing their own agenda, company or funds.

Sell on the news of protests, buy when the police start using live rounds... Lol. 

 

The bar stool experts claim they short whatever Jim Cramer touts... really not a good way to sleep well.