TD Ameritrade announced late Tuesday that it will cut online equity, ETF and options trading commissions to $6.95 per trade effective March 6 for its retail clients and clients of RIAs who custody with TD, following the lead of Fidelity Investments and Schwab, which earlier in the day made their own trading price cuts.
In a statement, TD Ameritrade CEO Tim Hockey positioned the price cuts in a broader context. “There is an effort underway in our industry to redefine value. While some are leading with price, our clients tell us it’s much more than that,” Hockey’s statement read.
“With our pending acquisition of Scottrade on the horizon,” Hockey continued, “we have a unique opportunity to enhance that [investor and advisor] experience even further with lower pricing for all of our clients.”
Specifically, online equity and ETF trade commissions will be lowered from $9.99 to $6.95, while options pricing will also be $6.95 plus $0.75 per contract.
Earlier Tuesday, and less than a month after Schwab cut commissions $2 to $6.95 a trade, Fidelity Investments announced a $3 drop to $4.95 per trade and within hours Schwab matched it. Fidelity and Schwab also lowered options prices to $0.65 from $0.75 per contract.
This is not the first time that TD Ameritrade has cut costs for popular investment vehicles. In October 2010, TD followed the ETF trading and expense ratio cutting lead of Schwab Investment Management and Vanguard in rolling out a list of 101 commission-free ETFs.