9 ms·
E*Trade Announces $0 Base Commissions for Online Stock, ETF, and Options Trades
- User23 7y agoMaybe next the brokers will stop asking almost 6% above Libor for a loan that’s better secured than most mortgages. I get offers in the mail for unsecured personal loans that are better rates than margin from any broker besides Interactive Brokers. Warning about them though: I hear they are extremely aggressive on margin calls and skip right to liquidation so be smart.
- charlesdm 7y agoThat's only for the "smucks", though. If you have a proper banking relationship, you'll get great rates.
- Waterluvian 7y agoI learned this lesson recently. I had to go into a bank to get a prime + 0.5 line of credit secured against my home's equity. Nowhere on the internet would an online formula give me anything close.
- ianai 7y agoProper banking relationship in what sense? Credit union?
- nullc 7y agoInteractive's margin rates are benchmark + 1% for 100k, bm + 5% for 1m. So right now, 2.33% at $1m which compares really favorable to a mortgages. They also let you set liquidation preferences on your assets. https://www.interactivebrokers.com/en/index.php?f=44427 https://www.interactivebrokers.com/en/index.php?f=44427
- mrep 7y agoRight along with charles schwab [0]. Amazing what a little competition from Robinhood can do. [0]: https://www.cnbc.com/2019/10/01/charles-schwab-is-eliminating-online-commissions-for-trading-in-us-stocks-and-etfs.html https://www.cnbc.com/2019/10/01/charles-schwab-is-eliminatin...
- dang 7y agoDiscussed a couple day ago: https://news.ycombinator.com/item?id=21136348 https://news.ycombinator.com/item?id=21136348
- dharma1 7y agoAnybody have a Charles Schwab account in the UK? I've been looking for a low fee brokerage who offer a business account in the UK. So far only IB seems to tick the box.
- amanaplanacanal 7y agoAnd TDAmeritrade.
- deleted 7y ago[deleted]
- basch 7y agoId venture robinhood is getting a little too much credit here. The order this happened in was Interactive Brokers, Schwab, TD Ameritrade, Etrade. They were obviously all prepared to do it in the event one of them went for it. Interactive Brokers did this more to give themselves a competitive edge over Schwab, TDA, and ETrade. That lasted about a day.
- bobcostas55 7y agoKinda sucks that IB started a whole new (gimped) service for this. I want my TWS and API access, why can't they let me choose whether I want to pay commissions or let them sell my order flow and do the trades for free?
- benmanns 7y agoDoes anyone (outside Robinhood) do 0 commission options trades?
- scotch_drinker 7y agoTD Ameritrade just started doing it. https://www.tdameritrade.com/why-td-ameritrade/free-stock-trading.page https://www.tdameritrade.com/why-td-ameritrade/free-stock-tr...
- deleted 7y ago[deleted]
- StevePerkins 7y agoRead their fine print. There's still a "contract charge" of $0.65/contract. Apparently many of these players are eliminating commissions by using a different word for it instead. As far as I know of, only Robinhood and Firstrade have true zero-cost option trading. And even then, there can be fees involved if you actually exercise options.
- StevePerkins 7y agoFirstrade has been doing so since the middle of last year. Although if you choose to actually EXERCISE an option, rather trading it prior to expiration, then there are fees involved in that. ETrade's annoucement says that they are eliminating commissions for stock AND option trades. But the fine print says that they're still charging $0.65/contract. Apparently, it doesn't count if they use the phrase "contract charge" instead of "commission". https://about.etrade.com/newsroom/press-releases/article?qmodStoryID=5545607436705191 https://about.etrade.com/newsroom/press-releases/article?qmo...
- Youden 7y agoThere are a bunch of places that do 0 commission but they usually charge a separate fee for the contract (which seems to universally be treated as separate from commission). Aside from the options others have mentioned, there are a bunch of brokerages that charge a monthly fee and give you unlimited trades. These are targeted at very active traders.
- Animats 7y agoSo how do they make their money? Front-running? Payments for order flow?
- maxerickson 7y agoInterest. https://www.kalzumeus.com/2019/6/26/how-brokerages-make-money/ https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...
- alphabettsy 7y agoI found the writing pretty hard to follow and overly complicated.
- maxerickson 7y agoWell shit.
- mrfusion 7y agoAnyone want to share the gist of that article?
- maxerickson 7y agoDiscount brokerages mostly make money on interest.
- mrfusion 7y agoInterest on what though? Isn’t most money immediately invested or put in money market funds?
- maxerickson 7y agoThey offer their own money market funds that are below 'market' rate and collect the difference.
- omarhaneef 7y agoMaybe all of you read every word Matt Levine writes as I do, but in case you don't, here is his explanation: https://www.bloomberg.com/opinion/articles/2019-10-02/the-trades-will-be-free-now https://www.bloomberg.com/opinion/articles/2019-10-02/the-tr...
- wyldfire 7y agohttp://archive.is/VS0mb http://archive.is/VS0mb
- simonebrunozzi 7y agoI love reading his stuff. I would honestly pay up to one of two dozen dollars a month for his very high quality thinking.
- dmix 7y agoI hope this is the future of journalism. Following individual journalists rather than just a topic like business. While the big breaking headlines and opinion pieces get mixed in between. If I ran WSJ or the like I'd make following the journos a core feature of the product. Some offer it but it's usually tacked on as an after thought.
- dhhdhdsbdb 7y agoTotally agreed, and I'm not even much of an investor.
- 1123581321 7y agoAre you saying that as a Bloomberg subscriber?
- perl4ever 7y agoI think his interests are not exactly in alignment with Bloomberg...that's why you can subscribe to his column for free, without paying for the rest of Bloomberg. I have a feeling it won't last forever.
- innagadadavida 7y agoThis is great news indeed. However their mobile UI is really horrible and hope they fix it
- SOLAR_FIELDS 7y agoTheir desktop one isn’t too great either, it took me awhile to figure out how to do basic stuff - they have way too much stuff going on and it doesn’t seem very well logically separated to me.
- hw 7y agoThinking of moving from Fidelity to Etrade/TD Ameritrade but hanging around a bit and seeing if (when) Fidelity would follow suit with implementing 0 commission trades.
- notyourwork 7y agoWhat’s wrong with fidelity or why are you thinking of moving?
- czbond 7y agoI really like Etrade's research tools and trading tools. Power Etrade is very useful for deciphering short/medium term trades.
- alexhutcheson 7y agoFidelity already offers no-commission trades on most of the iShares ETFs.
- justboxing 7y agoE*Trade, Schwab, and pretty much every other brokerage is playing catchup with RobinHood, which has had free trades on stocks and options from the very beginning. This has caused a steady exodus of users on these commission charging platforms, crossing over to RH. It's especially pronounced with Millenials and Gen-Z / "Post millenials". You may not always get the best pricing, and also there are no market trades as of this writing on RobinHood, but the RH UI handily beats everyone else in terms of ease of use and simplicity. The options trading functionality, for instance is very simple. You select options and then it presents you with a list of (screen) options on whether you think stock will go up, down, or sideways. Based on that, they show you low risk, high risk call options, put options or stangles and straddles. You can place a trade with a couple of taps. If you want to get more specific and sophisticated, you can choose the expiry dates and select your own call / put options. Compare this to TD Ameritrades UI and Schwab's UI, it looks like some guys from the 90s, stuck in the 90s, are still working on the UI team. Truly clunky, horrible, confusing and annoying.
- fourstar 7y agoI think this logic is hilarious. You really believe that the “millennials and zoomers” actually have enough capital to compete with these traditional brokerages? Robinhood doesn’t event pay out dividends. You’re overselling it. Their education for options is basic at best. PLUS anyone who is serious about playing options should actually invest time in learning it. If anything, its cleaner ui makes it easier for said demographic to LOSE money. You may think RH is large, but I’m guessing your vantage point is from within the tech bubble.
- User23 7y agoIn addition to learning the theory, anyone that wants to trade options beyond the just messing around level should really learn and use whatever their broker's desktop trading platform is. All the ones I've looked at provide far more information (the greeks, IV, and lots of other stuff) than the same brokers' web interfaces. Also as a bonus the data update is much closer to real time and not every minute or so.
- 7y ago
- ummonk 7y agoIf you’re not paying for it, you’re the product. In this case they’re selling your order flow.
- deleted 7y ago[deleted]
- robjan 7y agoThat only really matters if you only place market orders. And even then the routing may result in a better execution price than going straight to the exchange.
- perl4ever 7y agoMy understanding is it would be illegal if it didn't result in a better price.
- perl4ever 7y agoPeople pay for order flow because retail customers are, on average, idiots. If you didn't get paid, you'd still be just as smart or dumb as you ever were, you just wouldn't be getting a rebate.
- pg_is_a_butt 7y agoSo I guess the 6 figures I gave them wasn't enough? Holding money is very profitable. Some genius at the fed decided it was smart to let them lend out 10x the amount of deposits... invent money out of thin air. For every $1 you give them, they are allowed to pretend they have $9 for themselves. It's a rigged joke.
- k0stas 7y agoRequired reading about discount brokerage revenue streams from patio11: https://www.kalzumeus.com/2019/6/26/how-brokerages-make-money/ https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone....
- blub 7y agoI found Levine's article which was posted by someone else shorter and clearer. Had to give up 1/4th of the article in for this one, it just goes on and on for something that can be summarized in two paragraphs.
- thisisit 7y agoDoes this apply to RSU accounts opened by companies for their offshore employees too? The brokerage some of my colleagues pay to E*Trade is huge. $15 per trade to sell RSUs. And sometimes it gets too costly for them to sell RSU because of the brokerage costs.
- knadh 7y agoWe've been doing $0 broking in India for a while now. Nithin (founder) recently shared his perspective[1] on this, albeit largely in the Indian context. TLDR: While going $0 was long time coming, US brokers have other avenues of earning, unlike their Indian counterparts. [1] https://zerodha.com/z-connect/rainmatter/the-race-to-zero-can-indian-brokerage-industry-survive https://zerodha.com/z-connect/rainmatter/the-race-to-zero-ca...