Trade Schwab ETF's for Free

Discussion in 'ETFs' started by Cdntrader, Nov 16, 2009.

  1. No free lunch, remember. No one does anything for free just to be nice.

    I am not familiar with that broker or ETFs but I bet the house rake is there somewhere.
  2. Doesn't appear to be a catch. Remember they want to eat into the marketshare of the current kings of ETFs. They have huge retail liquidity, so they stand nothing to lose here since letting their own customers trade for free will only further advance the popularity of these ETFs which they make fees off of.

    Sure maybe the offer will not be there for ever, eventually some day they might charge a fee. But as far as I can see there is no catch here.
  3. Jesus


    It is probably, at least partly, to attract more daytraders to their site. They hope they will come for the free etfs and trade other securities as well, generating a commish.
  4. Am not familiar with these Schwab ETFs, but I suspect the average spreads will not be as tight as they are with some of the competing ETFs they list ... (I'll check this later today when the core session gets under way!).

    So, although perhaps winning on commissions, one could be losing on spreads.

    I'm sure you already know all this but round trip commissions on "smallish" round lots of ETFs might be anything from $0,02 - $0,10 per share, depending on who your broker is.

    Spreads, on the other hand, I have seen as high as $0,40/share on some illiquid ETFs during the core market session.

    The most liquid ETFs have average spreads closer $0,01, by comparison ...
  5. Schwab ETF= another way for wall st to stick their hand in the pockets of main st dummies.
  6. Hmmmmm....

    Removes Cybercorp....

    Removes cents per share model....

    Insists on exhorbitant pricing on the average ticket....
    When 20 cents per 100 shares is possible....

    They used to cherish getting between retail and wholesale....

    This is not a "trading firm" any stretch of the imagination....

    ETFs.....just translate into fat margins....for THEM....

    It's THEM vs YOU....

    Very simple....


    Do note Ameritrade did the same....bought a DA firm
    and shelved it....

    Just another "non-trading" fat retail advertising model.....

    Same Schwab model....

    Both Schwab/AMTD....RETAIL....= HIGH MARGINS

    Both are buy it once and sit on it firms....
  7. What are there, like 6 Schwab ETFs? I might be interested if they offered different asset classes, but I don't consider "Large Cap" and "Small Cap" stock funds true diversity.
  8. With reference to my earlier post above:

    Schwab ETF spreads (and as a % of yesterday’s close) at about 09h35 EST on 11/17/2009 (i.e. today)

    SCHA – $0.02 (0.07%)
    SCHB - $0.03 (0.12%)
    SCHF - $0.04 (0.15%)
    SCHX - $0.01 (0.04%)
    SCHC (not available yet)
    SCHE (not available yet)
    SCHG (not available yet)
    SCHV (not available yet)

    Compare with the following members of the “ETF $Billion Club”:
    SPY - $0.01 (0.01%)
    DIA - $0.01 (0.01%)
    QQQQ - $0.01 (0.02%)
    IWM - $0.01 (0.02%)
    EFA - $0.01 (0.02%)
    EEM - $0.01 (0.02%)

    Spreads are wider with Schwab ETFs, both in absolute and % terms.

    I guess therefore, it's a question of how your existing commisions (+ spreads) to trade the most liquid ETFs giving exposure to the same sectors, compare with trading these Schwab ETFs with zero commissions but higher spreads ... ?

    Also, the volume traded of the Scwab ETFs is much lower (cf. SCHF, which has currently traded nearly 44,500 shares, and SPY which has already traded over 17,500,000). I suspect that the lower liquidity will hurt most during sudden market moves, when the spreads may widen more than the above suggests they might ...
  9. Spreads are just a rough determinant of whether or not an etf is tradable.

    Another factor is how fast the price "turns" against you?

    How closely does it track it's index?

    Again, the spread is what these salesmen jokers use to con dummies into the etf game. Most don't even realize they're being taken to the cleaners every day.

    Luckily for Schwab there's a lot of gullible dummies on Main St.
    #10     Nov 17, 2009