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RE: Great News, Schwab Announced Commission Free Trading Starting On The 7th Of October
The real winners are the customers....the losers....the brokerage firms and investors.
The real winners are the customers....the losers....the brokerage firms and investors.
The brokerage firms are not losers by any stretch of the imagination. They most definitely have had a lot of customers come in today and will continue to come in. I know of 2 people who already created Schwab accounts. Commissions (from what I read) was only 4-6% of their revenue too. They'll be getting a lot more deposits and can they can use the idle cash for interest as well as money on order flow(which I don't know too much about). More customers = more money from order flows. And if they aren't losers, their investors can't be losers either.
TD might suffer more as commissions are a bigger part of their business model(30%).
And yes, customers are definitely the winners. Race to the bottom.
Appreciate the additional insight as I plan on writing another post about this very topic. Thanks again.
Happy to help. Etrades is getting in this action too. That’s a lot of brokers that have no commission starting on the 7th.