With players like Robin Hood and BUX making trading more fund and lower cost a trend was already started. Fidelity Investments Inc and Charles Schwab Corp made moves in quick succession on Tuesday to slash trade commissions, accelerating the race to zero and foreshadowing a more important battle to win clients for potentially more lucrative services.
Fidelity cut its commissions to trade stocks and exchange-traded funds to $4.95 from $7.95 a trade, a 38 percent reduction for its retail brokerage clients. Rival Schwab swiftly followed by slicing its own fees on standard online trades to $4.95, from $6.95. Both companies also reduced pricing on options. TD Ameritrade also said late Tuesday it would reduce its online equity and ETF trade commissions to $6.95, from $9.99. The deep cuts intensified an already fierce competition to lower fees in the investment industry, and the shares of Schwab and several other brokerages fell as markets weighed the potential for profits to be strained by discounts.