(Reuters) – Discount brokerage company Charles Schwab Corp (N:) said on Tuesday it is eliminating commissions for online trading of stocks, ETFs and options listed on U.S. or Canadian exchanges.
The company’s shares fell 10% in early trading, dragging down those of its rivals. TD Ameritrade (O:) shares slumped 22%, while E*Trade (O:) slid 19%.
Schwab will reduce the commission to zero from $4.95 per trade, starting Oct. 7, the company said.
“We estimate that this pricing reduction is equivalent to approximately $90-100 million in quarterly revenue, which roughly translates to 3-4% of total net revenue,” Chief Financial Officer Peter Crawford said in a statement.
The company, which provides brokerage and financial advisory services, reported an 8% year-on-year jump in second-quarter net income at $937 million.
It managed total client assets of $3.75 trillion, as of July end.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.