Schwab Fee Cuts Trigger Online Broker Bloodbath

Schwab is eliminating fees for online stock, ETF, and options trades, impacting its revenue by $90-$100 million quarterly. This move aligns with market trends towards low-fee products, as seen with competitors like BlackRock and Vanguard. The market reacted with declines in stocks of other brokers like TD Ameritrade and Etrade, which rely more on trading commissions. Analysts suggest this could lead to mergers, such as between Etrade and TD Ameritrade, to remain competitive.

What changes did the company announce regarding trading fees?

How much impact is the fee reduction expected to have on quarterly revenue?

What percentage of net revenue does the expected impact represent?

Which companies are mentioned as competitors that have already implemented no-fee trading?

What could be a potential consequence for E-Trade and TD Ameritrade if they do not reduce their fees?