Charles Schwab (SCHW) Eliminating Commissions for Stocks, ETFs and Options Listed on U.S. or Canadian Exchanges

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Topic Author
MFInvestor
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Re: Charles Schwab (SCHW) Eliminating Commissions for Stocks, ETFs and Options Listed on U.S. or Canadian Exchanges

Post by MFInvestor »

Firms like Vanguard and Blackrock will be the main beneficiaries of the move to zero $ commissions by Schwab, TD and ETrade.

ETFs will also benefit compared to Mutual Funds.

The value of commission free ETFs offered by firms on a select basis will no longer have any value.

A client can now purchase any Vanguard or BlackRock ETF at any of the major firms and not pay a commission.

This should be a huge plus for BlackRock in particular as they partnered in the past with Fidelity and offered commission free ETFs as they had no platform like Vanguard to sell directly to clients.

Now I can purchase those ETFs at any of the three firms mentioned (I can also purchase at Vanguard commission free).

Why pay Mutual Fund purchase fees at various brokers when you can own an ETF without any purchase cost.

This assumes that you are okay with owning ETFs.

These moves will act to accelerate the ownership of ETFs.

Will Fidelity follow suit and offer commission free purchases across the board?
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Doc
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Re: Charles Schwab (SCHW) Eliminating Commissions for Stocks, ETFs and Options Listed on U.S. or Canadian Exchanges

Post by Doc »

The larger stock brokers can make up the zero fee because they get paid for market flow apparently. That means that they route orders first to market makers not an exchange. The market makers pay for the privilege. Low volume ETFs just go along for the ride.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
stlutz
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Re: Charles Schwab (SCHW) Eliminating Commissions for Stocks, ETFs and Options Listed on U.S. or Canadian Exchanges

Post by stlutz »

Doc wrote: Mon Oct 07, 2019 8:33 am The larger stock brokers can make up the zero fee because they get paid for market flow apparently. That means that they route orders first to market makers not an exchange. The market makers pay for the privilege. Low volume ETFs just go along for the ride.
We should keep in mind that these amounts can add up to a lot over hundreds of thousands of trades, but on a single trade, they aren't much. For a market order, Schwab will typically get $.0009 from its market markers. That means they get 9 cents for a 100 share ETF order.

https://www.schwab.com/public/schwab/nn ... pects.html
Tiffku08
Posts: 38
Joined: Wed Oct 22, 2014 10:10 am

Re: Charles Schwab (SCHW) Eliminating Commissions for Stocks, ETFs and Options Listed on U.S. or Canadian Exchanges

Post by Tiffku08 »

Great news! I have stocks through Robinhood, so will Likely make the switch over to Schwab since I already have other investments through that brokerage 8-)
cheesepep
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Joined: Wed Feb 17, 2010 10:58 pm

Re: Charles Schwab (SCHW) Eliminating Commissions for Stocks, ETFs and Options Listed on U.S. or Canadian Exchanges

Post by cheesepep »

Just initiated a transfer from Chase You Invest to Schwab. Will get a large transfer bonus because of this and I went from $2.95 a trade to $0 a trade. I do prefer the Chase buy stock page a lot more than Schwab (large buttons are better than drop down menus), but everything else about Schwab is better (for example, Chase does not show (and it not customizable) cost per share). I also called Schwab about the transfer and about 10 seconds in the call, I got a human, not once but twice.
Topic Author
MFInvestor
Posts: 156
Joined: Mon May 02, 2016 7:28 pm

Re: Charles Schwab (SCHW) Eliminating Commissions for Stocks, ETFs and Options Listed on U.S. or Canadian Exchanges

Post by MFInvestor »

Post

by MFInvestor » Mon Oct 07, 2019 9:04 am

Firms like Vanguard and Blackrock will be the main beneficiaries of the move to zero $ commissions by Schwab, TD and ETrade.

ETFs will also benefit compared to Mutual Funds.

The value of commission free ETFs offered by firms on a select basis will no longer have any value.

A client can now purchase any Vanguard or BlackRock ETF at any of the major firms and not pay a commission.

This should be a huge plus for BlackRock in particular as they partnered in the past with Fidelity and offered commission free ETFs as they had no platform like Vanguard to sell directly to clients.

Now I can purchase those ETFs at any of the three firms mentioned (I can also purchase at Vanguard commission free).

Why pay Mutual Fund purchase fees at various brokers when you can own an ETF without any purchase cost.

This assumes that you are okay with owning ETFs.

These moves will act to accelerate the ownership of ETFs.

Will Fidelity follow suit and offer commission free purchases across the board?



From CBS MarketWatch
Fidelity Investments said that it is eliminating trading commissions, becoming the latest company to reduce brokerage fees as rival investing platforms chase greater market share.

Read now: StockTwits to launch commission-free stock trading platform to rival Robinhood, others

Fidelity said it would cut fees to $0 on online trades of U.S. stocks, eliminating a $4.95 charge for such trades. The Boston-based company’s fee changes also include exchange-traded funds and options transactions. For investment advisers, commissions will be cut to zero on Nov. 4. Fidelity’s online brokerage has 21.8 million accounts, the Wall Street Journal reported.

Fidelity’s move comes about a week after Charles Schwab Corp. SCHW, +3.18% said it was eliminating commissions on U.S. stocks, ETF and options trades, with rivals TD Ameritrade Holding Corp. and E-Trade Financial Corp. ETFC, announcing plans to follow suit soon thereafter.
tj
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Re: Charles Schwab (SCHW) Eliminating Commissions for Stocks, ETFs and Options Listed on U.S. or Canadian Exchanges

Post by tj »

Will Merrill Edge join the party? :D
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