Charles Schwab is ending commissions for online trading in U.S. stocks, exchange-traded funds, and options.
"Free trading isn't a new theme in the industry, but the cadence of announcements from firms offering zero commission trades seems to be picking up, and we also note that many of these companies have more credible platforms than the offerings of the past," said JMP Securities' Devin Ryan in a note to clients last month.
Schwab's chief financial officer, Peter Crawford, estimates the commissions fed about $90 million to $100 million in quarterly revenue. However, the commissions per revenue trade have been dwindling for multiple years. The company, with a market value of about $54.7 billion, is hoping the lost fee revenue will be made up for in new assets for the firm. The last time the financial services company, with about 12 million active brokerage accounts, lowered its commission fee was in February 2017, and assets under management grew from $2.92 trillion to the current $3.72 trillion, according to a Charles Schwab spokesperson.
Since the start of 2013, the year of Robinhood's launch, Charles Schwab has returned only 7.9% per year, below the 11% annual return of the S&P 500. TD Ameritrade has returned even less at just below 5% a year. Schwab's announcement is likely to pressure TD Ameritrade and E-Trade to drop commission fees. However, trading commissions make up about 25% of TD Ameritrade's annual revenue and 16% of E-Trade's yearly revenue, JMP noted, a much larger portion of revenue than Schwab's 7% annual revenue, the firm estimates.
Brasil Últimas Notícias, Brasil Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
Charles Schwab to end commissions for stock trading, shares fallDiscount brokerage company Charles Schwab Corp said on Tuesday it is eliminating...
Consulte Mais informação »
Stocks making the biggest moves midday: McDonald's, Charles Schwab, TD Ameritrade & moreThese are the stocks posting the largest moves midday.
Consulte Mais informação »
Schwab to drop commissions on U.S. stock, ETF and options trades, slamming online broker stocksCharles Schwab Corp. shares fell sharply in premarket trade Tuesday, after the company said it is planning to drop commission on U.s. stocks, ETFs and...
Consulte Mais informação »
Schwab Just Cut Online Trading Commissions. Here’s What That Means For Investors.Schwab just cut online trading commissions. Here’s what that means for investors: by skleb1234
Consulte Mais informação »
Schwab Just Cut Online Trading Commissions. Here’s What That Means For InvestorsThe years-long battle over low-fees in the brokerage industry continues.
Consulte Mais informação »