Commission-Free Trades: A Bad Deal for Investors
Commissions on stocks and exchange-traded funds (ETFs) now come to a big fat zero if you use one of the four biggest online brokerages.
On Oct. 1, Charles Schwab (SCHW) announced commission-free trading on stocks, ETFs and options trades. Online-broker rivals E*Trade (ETFC) and TD Ameritrade (AMTD) followed suit within 24 hours, and Fidelity fell in line within a week.
Online trades were already incredibly cheap: Schwab and Fidelity charged $4.95 for each trade. It was only a little more expensive ($6.95) at E*Trade and TD Ameritrade. Still, money is money. So isn’t a zero-dollar trade a clear win for individual investors?