The Broker Commission War
A couple days ago, Schwab offered up a news release saying, “Hey, commission free stock trading.” Their options still have a contract fee, but as far as stocks are concerned, online trading, all that, zero dollars. Zero dollars. And it was funny, that Tuesday night we were doing the live webinar for the Trading Freedom Pathway program I offer, and on that I was talking about it saying, I feel like it’s only a matter of time before these other brokers, E-Trade, TD Ameritrade, they have to follow suit or else they’re gonna get crushed, everybody’s gonna go to Schawb. And by the time that webinar wrapped up, about an hour later, they’re like, hey look, TD Ameritrade just announced that they’re $0 fees, as far as trading is concerned. So right there, TD Ameritrade fell. And then yesterday, guess who fell? E-Trade announced, $0 for commissions now. God bless capitalism. That is capitalism. That is a competitive market. That’s how it works. Everybody wants their business, so let them compete. And how are they competing? By lowering their prices. But that all brings me up to the talking point here that I’m very curious about, is you gotta give credit where credit’s due. Well done, Robinhood. I mean you literally change an entire industry. You can rag on Robinhood as much as you want, about how they’re for rookies and how their platform isn’t actually that good. But that’s not the point, the point here is, I mean, wow, they literally transformed an entire industry. But that brings up, I don’t know if there is gonna be some cruel irony here, and I’m curious on your thoughts, so please leave those down below. But is Robinhood gonna actually be able to survive this?
What About Robinhood Trading
I mean, you look at Schwab, TD Ameritrade, E-Trade, those are massive brokerages. They have robust platforms. They have apps. They have desktop platforms. They have everything, and now they also offer $0. So is Robinhood gonna actually be able to compete with this? I don’t know. Right now, I’m feeling kind of bearish on Robinhood. I think they might’ve just shot themselves in the foot. I mean, because their one big competitive advantage that they had over these massive brokerage firms was, hey we don’t charge you anything. But now the massive companies are like, hey, hey Robinhood, we don’t charge anything either. And whether or not they’re gonna survive, I don’t know, but if anything, it’s gonna definitely kick them into overdrive to start to develop desktop platforms. Cause they gotta play catch up now. They are way far behind as far as the technology, and as far as infrastructure, and all that is concerned. So I’m not gonna say they’re totally gonna go away, but like I said I’m bearish right now and in the next couple of weeks maybe they’ll do some announcements and stuff on what they have planned and how they’re going to compete right now. But yeah, I don’t know how they’re gonna compete. Because what they were competing on is already gone.
Am I Going To Switch Brokers?
But for us, as the consumer, what an exciting time we are in. Myself, I am now highly looking at changing… I’m gonna hold out a little bit longer. My broker that I use is Lightspeed Trading. I don’t know if they’re gonna follow suit. Interactive brokers, they now have a light version that is going to be commission free, but that doesn’t quite work for my strategy. But my plan of action right now, is I’m gonna hold out a little bit longer, see if Lightspeed maybe is another domino that falls and announces something. Then I’ll go from there. But if they don’t, then right now, I don’t know, I’m gonna start to do some research into really, Schwab, E-Trade, although E-Trade from my understanding, they don’t have the best platform for what I’m looking to do. But I mean if you use any of these brokerages, let me know. What are your thoughts? Do you enjoy their online platform? Does it work for you? Maybe what are some things you don’t like? Let me know down below, because like I said, we are literally shifting into a brand new area, a brand new era, really, for trading. So I’m curious for your thoughts and maybe any suggestions you would have.
But that’s my plan of action going forward. Wait a little bit while longer for Lightspeed. If nothing happens there, then checkout Schwab, E-Trade, and TD Ameritrade’s platform and see if I can make one of those work for me. Granted, right now, I don’t pay a whole lot of commissions. I mean it’s very cheap, but a penny saved is a penny earned. So if I can save a few hundred dollars, maybe some months a couple thousand dollars every month in commissions then I’d be an idiot not to do that. But I gotta make sure that the platform operates in a way I need for it to operate, in order for me to execute my strategy. So that is the plan going forward, but I’m very curious.
Do You Think Robinhood Can Compete?
What do you think on Robinhood? Is Robinhood gonna survive? Or is there going to be some sort of great cruel irony here, where Robinhood, who was responsible for shifting an entire industry, is now going to have just crushed themselves because they did that? That kind of remains to be seen, but we’ll see what happens with it. But I’ll put some of the news releases down below. That way, if you’re maybe not aware of this, you can check out those news releases that have announced all this. Cause everybody’s got a different date on when it’s gonna start. But it’s all starting, pretty much I think, October 15th would be the last time, or the last date, or maybe it’s October 7th? Point being, very very soon all these changes are going into effect and there’s going to be zero fees on those stock trading commissions.
- Schwab Just Cut Online Trading Commissions
- TD Ameritrade Fires Back, Cuts Commissions to $0
- E-Trade drops commissions on trades
So exciting, exciting times. Pretty crazy times. But for us as consumers, like I said, capitalism is awesome. This is how it works. They are competing against one another for us as consumers, and now they’re competing on the price and that’s a great thing for everybody. So yeah, let me know what you think about Robinhood. Are they gonna survive? And then also let me know, what platforms are you using right now? Do you like them? What are some pros and cons? Because I literally am right now, highly, highly considering changing, so I’d love to hear your thoughts. So leave those down below, and also if you still enjoy “The Friday drive,” this segment, then let me know down below too.
So far this is the third one we’re posting and feedback has been good, but I always want to continue to get more feedback, so also let me know that down below. Or the easy way to just communicate to me, hey Clay, I don’t feel like leaving a comment, but I do like “The Friday Drive,” just hit the like button. That’s a very straight forward way to let me know that you enjoy these too. But yeah, we all have some research to do, unless you’re using one of these brokers already, but what a great time to be living. Zero dollar commission fees for some of the biggest names in the business.