Pedestrians walk outside an E*Trade Financial office in New York.
Daniel Acker | Bloomberg | Getty Images
Retail brokerage firm E-Trade announced Wednesday it will drop commission fees on online U.S. stock, ETF and options trades.
The move comes within a week of Interactive Brokers, Charles Schwab and TD Ameritrade all dropping their commission fees. Shares of all the brokerage firms have been getting hit this week on fears that a lack of commission revenue with hurt margins.
E-Trade’s new fee structure will start on October 7. Options will still have a 65 cents charge per contract.
“”With this new commission schedule we are further raising the bar, delivering an unrivaled experience at price points that cannot be beat,” said E-Trade chief executive officer Mike Pizzi in a press release.
E-Trade estimates a quarterly revenue impact of $75 million from dropping fees. The stock dropped 5% after hours following the announcement.
Bank of America estimates E-Trade gets about 17% of revenue from commission. TD Ameritrade generates 28% of revenue from commissions and Schwab generates only 8% from revenue.