What Does Commission-Free Trading Mean For You?

Josh here -

Charles Schwab announced that starting October 7th all commissions on stocks, ETFs and options would go down to zero. The march toward commission-free trading has been happening in slow motion for decades, ever since the 1970's.

My take on it is this - it's terrific news for investors, as it lowers the cost of being an investor and gaining access to markets. But is it a "game changer"? I don't think so. It's also important to note the link between market valuations and the ease of access. On a secular basis, US stocks have been valued higher as the average fund fee, commission fee and other costs have fallen. Trading volumes have soared and more participants than ever are using the public markets to build wealth. This is not a coincidence.

Be sure to subscribe to our channel so you never miss an update:

New to investing? Check out Liftoff:

Follow us on Twitter:

Follow us on Facebook:

Talk with us about your portfolio or financial plan here:

Obviously nothing on this channel should be considered as personalized financial advice just for you or a solicitation to buy or sell any securities. Please see this 3,000 word terms & conditions disclaimer:

[scottscriticalmass]

Appreciate the impromptu video Josh! It was only a matter of time before a brokerage offered free stock/etf/option trades (w/o strings attached) and it makes perfect sense that it's Schwab. I'm a long time Schwab customer and SCHW investor and today's news makes me even more satisfied on both, today's stock performance notwithstanding. I'd love to see SCHW wrongly punished further, as I haven't bought shares since '09 and would jump at the chance to add in the lower $30's. Cheers man!

[ryansloot]

Bond ETFs can now be used as shorter term savings accounts. They provide more yield than high yielding savings and now won't cost ~$10 to get in/out.

[drcm]

Establishing a cost basis in small amounts over a week is much better than randomly picking one day and time (in small accounts)

[clkc]

I bought my 1st stock early 90's... cost $50. My wife and I started an online account in the late 90s cost had dropped into the $20 range.

[Ok-dort]

It would be nice to remove HardToBorrow fees.... somebody with a small account gets eaten by these fees.

[rodsalvador]

This is amazing! Couldn't help trading today because of the volatility but I can't wait to keep trading going forward.

[askchrishetrades]

It means robinhood goes bye bye bud. Already getting calls of people moving accounts over from them and other firms. Schwab will buy out other firms and errands first to go under. Smart move from Schwab. Will gather assets off the street much faster.

[JRInTroy]

It's a big deal. It means newbies can purchase a single share of a $30 stock just to experiment. It also means you can make a hundred tiny trades per day if you wanted... right?

[AlemGizaw]

Does this mean they will all be like robinhood?

[brandonderrick]

The bitcoin trading effect is real. I'd bet this is a competitive move to compete with Interactive Brokers which cut its fees to compete with bitcoin exchanges. All speculation of course.