Forex broker TD Ameritrade will now offer its clients commission-free trading which will be available through the brand’s main American entity.
Among the advantages of the new trading options is unlimited access to stocks and exchange traded funds with no commission fees. Furthermore, prices for options trading will also be lowered to $0.65 per contract.
The chief financial officer of TD Ameritrade, Steve Boyle, when asked about the decision, responded “This is great news for our clients, and thanks to the diversity of our business model, we’re able to make it a reality.”
He further states that he is expecting a significant revenue impact of some $220-240 million per quarter with amounts to around 15 percent of the net revenues according to the June Quarter fiscal 2019 revenue.
The decision to begin offering to clients commission-free trading comes in the wake of a growing demand for it in US and all around Europe.
The mobile apps Robinhood and Acorns were among the first to start providing the service, followed by inovative brokers such as Trading 212, Revolut and eToro. And it must be said that their client base responded quite favorable and has grown considerably in the past five years.
The innovative and lucrative service caused a chain reaction in the US with the two other big names in the business aside from TD Ameritrade Charles Schwab and Interactive Brokers also announcing commission-free trading in the past week.
According to the Peter Crawford, chief financial officer of Charles Schwab, the road to zero commission trading was inevitable.