TD Ameritrade CEO Tim Hockey. © LILA PHOTO for TD Ameritrade Institutional. TD Ameritrade CEO Tim Hockey. © LILA PHOTO for TD Ameritrade Institutional.

Hours after Schwab announced plans to eliminate commissions on online trades for stocks, ETFs and options starting Oct. 7, TD Ameritrade announced plans to do the same, starting Oct. 3. Like Schwab, TD Ameritrade will charge 65 cents per contract for options trades.

“We are committed to giving our clients the best possible investing experience, with cutting-edge technology and award-winning investor education and service teams. And now, that experience just got better,” said Tim Hockey, president and CEO of TD Ameritrade, in a statement. “We’ve been taking market share with a premium price point, and with a $0 price point and a level playing field, we are even more confident in our competitive position, and the value we offer our clients.”

(Related: Schwab Ends Commissions on Online and Mobile Trades)

TD has been charging $6.95 for trades, slightly more than Schwab, which charges $4.95. The new rates will apply to TD Ameritrade retail clients and clients of independent registered investment advisors that utilize TD Ameritrade Institutional. A final pricing schedule will be available on Oct. 3, 2019.

The commission elimination is expected to reduce TD Ameritrade’s revenues by approximately $220 million-$240 million per quarter, affecting roughly 15% to 16% of net revenues, according to Steve Boyle, TD Ameritrade’s CFO. “We’ll have more information about our fiscal 2020 plan when we release fourth quarter earnings later this month,” said Boyle in a statement.

Even though TD Ameritrade announced the change after the market close on Tuesday, the stock ended the day’s  session down almost 26% at $34.67, more than other brokerage stocks. By market close Schwab shares were off 9.7%, Interactive Brokers off 9.5% and eTrade down 16.4%. All recovered in afterhours trading, and TD Ameritrade led the rebound, up 1.2% versus only a fraction of a percent for the others.