Yes folks, commission rates are still falling – at a rate even I’m surprised at. Following Fidelity’s move last week, E*Trade (ETFC) announced that it was ’simplifying’ its commission rate schedule.
E*Trade is trashing its $12.99 pre-trade commission tier as well as its account activity fees – a nice bonus for those of us who don’t do much in the way of volume. It’s also getting rid of annual IRA account fees, per share commissions formerly applied to market trades larger than 2,000 shares, and all account service fees.
Starting on February 8, 2010, all E*Trade Securities customers will pay $9.99 or less per stock and options trade (plus a $0.75 per contract fee on options trades). Traders who move while higher volume traders will continue to enjoy the current $7.99 per trade rate.
As an E*Trade shareholder, I’m not sure about how much I appreciate this news. It’s likely that the company is feeling the bite of increasing competition – which does imply some risk to earnings estimates as it loses out on those high-margin fees.
P.S. Read my recent interview with Frank Curzio, and read all about Apple’s (AAPL) new Aperture 3.0 program!