Schwab cuts commissions to zero on US stocks, options and ETFs

"Schwab Removes the Final Pricing Barrier to Investing Online by Eliminating U.S. Stock, ETF and Options Commissions"
https://finance.yahoo.com/news/conjunction-chuck-schwab-book-invested-124500688.html

https://www.marketwatch.com/press-r...-stock-etf-and-options-commissions-2019-10-01

Clarification: US stock options have a zero base commission + $0.65 per contract

Clarification: effective 7 October

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so how does it make money? I thought IBKR doesn't 'sell flows'? how does its latest zero-commission make money?

 

Net interest margin

Order flow rebates

Asset management fees

This is why AMTD and ETFC stocks are down more in the premarket than SCHW

https://finance.yahoo.com/quotes/ibkr,schw,amtd,etfc,

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I wonder if the options price of .65 is all in or if they will add on exchange fees as well.

 

Wow. No Commissions everywhere

 

Maybe international clients are included this time?

 

They are selling order flow on IB lite but not IB pro.

 

Not quite. Real service is still paid for. The free stuff is fluff.

Kind of a reversal from days of olde, when the fluff was $8 and $10 a trade, and the real stuff was $1. Now, the real stuff is *still* $1 a trade, but the fluff (whose development has been depreciated and only requires a new programmer for "mobile" development) is now, "free."

The march of technology.....

 

Simply amazing what a simple app like Robinhood can do to an entire industry. Its baffling that Robinhood has literally changed the entire brokerage industry upside down. No one would have thought this when Robinhood came about, they thought no way could they survive and here we are today with commission free trading. I remember how much commission I used to pay back in the day when calling a broker set you back a few hundred dollars. Glad those days are long gone. Wondering what industry will be next to give free service out, maybe call phone service sometime in the next 5 years? Waiting for that patiently.

 

Here IB claim they add price improvement of USD 0.43 per 100 shares corresponding to USD 0.0042 per share. If that reflects reality, zero commission will add nothing for current IB clients. However, for Schwab clients it will, because at Schwab you currently pay commission AND your order flow is sold.

https://investors.interactivebrokers.com/en/index.php?f=1340