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Price Wars Hit the Online B/D Market

Online B/D TradeStation Securities and online brokerage Ally Invest are offering commission-free trading.

The price wars have extended to the broker/dealer community, at least online.

TradeStation Securities, an online broker/dealer and FCM operating subsidiary of TradeStation Group, said it is now offering commission-free trading to customers who use its web and mobile platforms for exchange-listed stocks, options and ETFs. Customers trading options will continue to pay $0.50 per contract without a commission charge. This new commission-free offering on the TradeStation web and mobile platforms is branded TSgo.

"Whether through education or by offering traders a community, we are committed to making trading mainstream and less daunting by empowering all people – regardless of experience, age and financial status – with the knowledge and resources to help them develop their financial futures," said John Bartleman, president of TradeStation Group, in a press release. "By offering commission-free trading to our customers on our web and mobile platforms, we're breaking down yet another wall to help traders access the markets."

Interactive Brokers Group announced a new commission-free app and desktop service for making unlimited trades on U.S. exchange-listed stocks and exchange traded funds. That was quickly followed by Schwab, TD Ameritrade and E*Trade in the days that followed. 

Ally Invest, the online brokerage and wealth management arm of Ally Financial, is also following suit; starting Oct. 9, they will cut their commissions to zero from $4.95. Just last month, Ally Invest announced it would offer a new set of “freemium” managed and self-directed investment plans, with 90 days of commission-free trading and more than 500 commission-free ETFs; at the time, a company spokeswoman said commissions would revert back to $4.95 per trade at the end of the 90 days.

According to Ally Invest President Lule Demmissie, the firm had already been preparing for the “evolution to democratize investing,” saying they were happy to offer zero-commission trading for investors.

“With continued advancements in technology making online trading increasingly more cost-efficient," Demmissie said, "it was inevitable our industry would reach a point where self-directed investors could participate in the market for little to no cost."

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TAGS: Equities ETFs
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