“‘A commission is the explicit spread or profit a broker dealer charges. “When that goes to zero, that naturally means there’s going to have be some other way for them to keep the lights on,” he said. “A commission is the explicit spread or profit a broker dealer charges,” said Tyler Gellasch, the executive director of Healthy Markets, an investor trade group. Would make up the revenue after erasing the commissions. Others, speaking before the E-Trade announcement, said their big question now was how Schwab On top of that, you throw in people’s ability to trade without consequence.” He added, “Acting on no discipline and no cost, it’s a recipe for disaster.” “The market is already delicate, so to speak. “It has the potential to be a disruptive issue,” Kashif Ahmed, the president of American Private Wealth, a Bedford, Mass.-based firm, said of the slashed commissions. But they also come during a time of stiff market headwinds: There’s the ongoing impeachment inquiry into President Trump, the tariff trade war with China and the drumbeat of a recession lurking somewhere around the corner - all things that could rattle retail investors.

The fast-fading fees are another round in an ongoing race to shrink broker fees. See also: Charles Schwab’s move to sell fractions of shares could be a ‘game-changer’ for investors

The commission was $6.95 for the first 29 trades and $4.95 after up to 500 stock or options trades. Has also said it was ending retail commissions. TD Ameritrade is ending its $6.95 commission. Schwab is dropping its $4.95 commission per stock trade, ETF and option trade. ”ĭavid Bize, an Oklahoma City-based financial planner, said that “do-it-yourself investors have had low-cost trades for years, which provided ample rope to hang themselves.” No costs would encourage even more trades, which, he said, “most people do poorly, rather than a ‘buy-and-hold’ approach, which would be better for them.”

“Inexperienced investors could overtrade or make risky stock bets, unimpeded by fees to make them stop and think a second, advisers told MarketWatch.

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