The move towards complete commission-free trading offerings continues with JPMorgan and Firstrade being the third and fourth online brokers, respectively, to remove commissions entirely from the equation. Robinhood and Merrill Edge were the first movers multiple years ago.
It appears to be inevitable that stock and options trading in the US will eventually become commission free no matter which broker you trade with. The question being asked now is how long it will be before the big-four (Fidelity, Charles Schwab, TD Ameritrade, and E*TRADE) join the movement? Given Charles Schwab’s history in cutting commissions first, it is the most likely candidate to move to zero next.
Here’s a speed summary of the most recent announcements from the US online brokerage industry.
7/2/18 – Vanguard To Further Drive Down The Cost Of Investing By Broadening Commission-Free ETF Trades
- Commission-free ETFs trading expanded beyond just Vanguard funds for a total of approximately 1,800 ETF products
- Leveraged ETFs excluded
- Firm sets sights on becoming the best home for long term investors
8/1/18 – Fidelity Rewrites the Rules of Investing to Deliver Unparalleled Value and Simplicity to Investors
- Two zero-expense mutual funds launched for retail investors only
- Minimum deposit removed, misc account fees revoked
- Expense ratios for Fidelity index mutual funds reduced
8/21/18 – JPMorgan Offers Free Trades, Accelerating a Pricing War
- Offering called You Invest Trade with robo-advisor variant You Invest Portfolios launching in 2019
- First 100 trades free each year for Chase Premier Plus Checking customers ($15,000 min avg account balance), $2.95 thereafter
- Unlimited free trades each year for Chase Private Client ($250,000 min avg account balance), Chase Sapphire Banking, J.P. Morgan Private Bank and J.P. Morgan Securities clients.
8/21/18 – Firstrade Moves To Free Online Trading – Stocks, ETFs, Options, Mutual Funds
- All stocks, exchange-traded funds (ETFs), options and mutual funds now commission-free
- Previously, Firstrade offered investors flat-fee stock trades for $2.95 each and options trades for $2.95 plus $.50 per contract. Firstrade also had the second largest offering of commission-free ETFs at 703
8/27/18 – Ally Invest Introduces Diverse Set of Commission-Free Exchange-Traded Funds
- 100 commission-free ETFs now available, previously zero
- BlackRock iShares, Wisdom Tree, ESG among products in lineup