Charles Schwab is dropping commissions for online trading of U.S. stocks and exchange-traded funds, the latest slash in an industry battle that’s drastically cut the cost of investing.
Tuesday’s announcement sent shares of other brokerages plummeting. TD Ameritrade lost 21% in morning trading, on pace for its worst day in 13 years. E-Trade Financial lost 18%. Schwab fell 8%.
Schwab said commissions for mobile and web trading of stocks and ETFs listed in the U.S. and Canada will drop to zero from $4.95 on Monday. The industry has been slashing fees across investments for years, as customers demand lower expenses. Stock mutual funds last year kept $55 in fees for every $10,000 invested, according to the Investment Company Institute. That’s down from $100 in 2003.