# no commission trading



## oldmontana (Oct 2, 2019)

has come to Charles Schwab and TD Ameritrade (starting tomorrow ) and other discount brokerage firms.

Will that cause the big firms to lower their commissions?  I think not as they give advise on a stock...you will not get that at discount brokerage firms....they have tons of research available but its up to you to decide.


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## mathjak107 (Oct 3, 2019)

i have a chase you invest account and have been trading free for more than a year now


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## fmdog44 (Oct 3, 2019)

I have ben paying $6+/- for trades through TDA. Not sure why this nice change was made.


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## Liberty (Oct 3, 2019)

oldmontana said:


> has come to Charles Schwab and TD Ameritrade (starting tomorrow ) and other discount brokerage firms.
> 
> Will that cause the big firms to lower their commissions?  I think not as they give advise on a stock...you will not get that at discount brokerage firms....they have tons of research available but its up to you to decide.


Think it shows the market is maturing ...separate yourself from the herd of competition, they may be chumming the small investors or day traders in the hopes of up selling them more.  Think of lost leader retail advertising...get them in the store and upsell.  Of course the others will have to match it now, probably.


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## Lethe200 (Oct 4, 2019)

Here's the explanation:
*Your Stock Trades Go Free but Your Cash Is in Chains*
Schwab made a big splash this past week by eliminating commissions. It’s still making money off you elsewhere.
WS Journal by Jason Zweig, Oct. 4, 2019

....You no longer will pay a few bucks in commissions to buy or sell a security at these firms. But Schwab and other brokerage firms are in business to make money, and one way they often do that is by milking clients’ cash. When you trade for free, you still pay—at a different tollbooth.

....Schwab can offer such cheap options partly because of how it handles investors’ cash. The firm automatically sweeps idle cash *not* into money-market mutual funds or other assets that could yield about 2% at today’s rates, but into its own bank, which pays peanuts. 

....This week, clients were earning between 0.12% and 0.55% on those balances.

...When clients invest in Schwab Intelligent Portfolios, its roboadvisory service that offers preselected baskets of ETFs, between 6% and 30% of the money goes into [required] cash. ...._*With $41 billion in assets, those portfolios hold about $4 billion in cash. Conservatively assuming Schwab nets about 1.5% by lending out that money through its bank, the firm is making roughly $60 million a year on it.*_ The clients, meanwhile, are earning less than $25 million.

Schwab discloses all this. The rate it pays on clients’ cash “may be higher or lower than...on comparable deposit accounts at other banks,” warns a disclosure from Schwab Intelligent Portfolios. “Schwab does not intend to negotiate for rates that seek to compete with” other cash options, adds the disclosure.

_*Furthermore, the document states, if you need to withdraw money from your Schwab Intelligent Portfolios account, the firm may sell some of your ETFs—potentially triggering a taxable capital gain—to restore your cash balance to its required level.*_

.... according to David Goldstone of Backend Benchmarking, a research firm in Martinsville, N.J., that tracks automated online investing services, no other roboadvisor requires clients to hold even as much as 10% in low-yielding cash.

+++++

So even if you are not using the roboadvisor services; others are and that's who the brokerage is making money from. A LOT of money.


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