TD Ameritrade Matches Schwab, Ends Commissions on Many Trades

(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.