After Robinhood took the consumer market by storm in 2013 by offering completely free trades, analysts predicted it would only be a matter of time until the major brokers followed suit. I personally keep a small portion of my assets in Robinhood, though they haven’t been exactly without controversy. Robinhood has been accused of possibly not providing the best order speeds and pricing, as they take revenue from sending their order flow through 3rd party market makers. There was also the botched launch of Robinhood Cash. For what it’s worth, here’s my Robinhood referral 🤣.
6 years later, the predictions finally came true. First, Interactive Brokers announced on September 26, 2019 that there would be no commission for trades of US stocks and ETFs. Next, Charles Schwab on October 1, 2019, announced that it was also eliminating commission for trades of US stocks, ETFs, and options. TD Ameritrade announced later that day that it was also eliminating commissions. ETrade followed suit on October 2, 2019. There still will be some small fees for each options contract, but no commission. Share prices of the major retail brokerages all have been net down after these announcements, but the idea is to bring more capital into each of their businesses. Hooray for competition! I for one plan to move my assets back from Robinhood to Schwab.