| 07 January 2010

The Charles Schwab Corporation today announced that they're slashing commission rates on equity trades by 30% to $8.95. Options trading fees remain $8.95 plus $0.75 per contract. The new pricing takes effect in two weeks, on January 19th, and will also be available to RIAs in their managed accounts. TD Ameritade (AMTD), by comparison, charges $9.99 for equity trades.

Schwab may be attempting to cash in on the pricing pressure felt by the super-discounted online only firms like tradeMONSTER, optionsXpress (OXPS), OptionsHouse and TD Ameritrade's thinkorswim unit.

We recently reported that OptionsHouse "adjusted" their pricing. Instead of a flat rate of $9.95 for up to 4,000 contracts they now charge $5 for up to five contracts. Trade more than that and it's $8.50 plus $0.15 per contract. The rates increase further for complex spreads, straddles and other combo trades to $12.50 plus $0.15. This means that low-volume traders will actually pay less, but high-volume traders will pay more.

Schwab also announced it's rolling out new managed portfolio ETF products. According to the release, these products are "made up of diversified ETF holdings representing up to 20 asset classes... Schwab Managed Portfolios-ETFs use diversification across all the major asset equity and fixed income classes, as well as TIPs, real estate and commodities such as energy, agriculture and precious metals."

Schwab also recently rolled out a line of new ETFs and customers can trade those products for free.




Photo Courtesy Dan Jaeger