E*TRADE Financial Corp (NASDAQ: ETFC) has joined the list of brokers eliminating online retail commissions joining several others in the pricing war.
E*Trade said Wednesday afternoon it will eliminate retail commissions for online U.S. listed stock, ETF, and options trades. It also plans to reduce the options contract charge to 65 cents, while keeping its active trader options contract charge at 50 cents. The changes take effect Oct. 7.
E*Trade also joined the other online brokerage stocks in seeing its stock price drop. E*Trade's stock closed down 16% on Tuesday. On Wednesday, it closed down another 3.6%.
The company pegged the revenue hit from ending the commissions at about $75 million in the second quarter.
Online brokerages have been reducing fees for some time in a bid for market share, and some new entrants have come into the market with a no-fee platform.
The cuts led at least one analyst to recommend investors stay away from online brokerage stocks for now.
E*Trade shares closed Wednesday at $35.20.
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