They collect the ECN fees, for providing liquidity instead of passing it onto the customer. For market orders they sell it to firm that wants the order. They get to jump the visible queue by giving a subpenny improvement. If your a market maker. It’s a tool to work your exposure and spread.
I made a switch to Schwab a few years ago just before the Scottrade/TD merger. At the time, I was given a promotion for commission-free equity trades, for the duration of time I had a Scottrade account. Ended up 6-7 years of "free trading" which is due to expire in abt 3-4 more. Did well beyond several hundred round turns through Schwab. Never personally experienced any problems with fills or customer service. Never paid a single commission. I no longer trade equities, nor trade through Schwab, but still frequently use the debit card. Saved me a lot in ATM fees around the world. I like Schwab.
"The retail investor is left with two choices in the current market, pay the spread, or remain unexecuted. Passively bidding for or offering stock for sale is a dead end, the opportunity no longer exists." http://www.nanex.net/aqck2/4713.html
Does this mean that scalper will benefit the most? Since scalpers go in and out all day long they would presumably benefit from zero commission the most. Long term investors/position traders would hold on positions for weeks or months don't really care about saving $15/RT or whatever E-Trade,Schwab, TDAmeritrade charges. A few months ago I signed up for TradeZero because of its $0 commission and replacement for Robinhood since RH is not suitable for scalping intraday. Now with these announcements it sounds like TradeZero isn't that special anymore... If any other retail traders can get $0 commission.
I have trading accounts with two different brokerages, both $0 commission. I like Schwab because they seemed to be able to get me best prices and rapid execution. I often got better price than limit which is significant for options.
if you don't mind what are the names of the 2 brokerages that offer $0 commision that you use? I only have RH and TradeZero for $0 commission. For everything else(futures trading), I use IB. TradeZero has $0 commissions for OPTIONS too just like RH except TradeZero is a real trading platform as opposed to the slow mobile app that is RH. I would be super excited if TradeZero, RH, or IB start to offer $0 commission for futures since that's what I do the most(my bread and butter). Now with TradeZero, I've been scalping equities more given it costs nothing. So I'm starting to tiptoe back into active equities trading too given the zero cost structure now. Trading very liquid names and throw out more sizes but for smaller moves.