TD Ameritrade set to eliminate commissions on online exchange-listed stock, ETF, and option trades

TD Ameritrade Holding Corp. (NASDAQ:AMTD) is planning to drastically reduce commissions on certain trades. On Tuesday, October 1, 2019, TD Ameritrade announced that its US brokerage firm will eliminate commissions for its online exchange-listed stock, ETF (US and Canadian), and option trades.

The rates will be moving from $6.95 to $0, with the change to be effective Thursday October 3, 2019. Clients trading options will now pay $0.65 per contract with no exercise and assignment fees.

Tim Hockey, president and chief executive officer of TD Ameritrade, commented:

“We are committed to giving our clients the best possible investing experience, with cutting-edge technology and award-winning investor education and service teams. And now, that experience just got better. We’ve been taking market share with a premium price point, and with a $0 price point and a level playing field, we are even more confident in our competitive position, and the value we offer our clients.”

Steve Boyle, chief financial officer, TD Ameritrade, explained:

“We expect this decision to have a revenue impact of approximately $220-240 million per quarter, or approximately 15-16 percent of net revenues, based on June Quarter fiscal 2019 revenue. We’ll have more information about our fiscal 2020 plan when we release fourth quarter earnings later this month.”

TD Ameritrade retail clients, as well as clients of independent registered investment advisors that utilize TD Ameritrade Institutional will be able to make use of the new rates.

Another investment major – Charles Schwab, made a similar announcement regarding pricing yesterday. The company said it was eliminating commissions for stocks, ETFs and options listed on U.S. or Canadian exchanges, across all mobile and web trading channels. Its clients trading options will continue to pay 65 cents per contract.