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Shares of electronic trading firms are under a bit of pressure today over fears of more price wars in the highly competitive electronic trading arena. The pressure comesx after Fidelity said it was cutting its online equity trades to $7.95 per trade on major US exchanges. In fact, as a target on the competitive and growing ETF sector, Fidelity said it would offer its retail customers effectively no-fee or discounted fees for online trading of about 25 BlackRock Inc. (NYSE: BLK) iShares ETFs.
We already saw a commission plan change recently from Charles Schwab Corp. (NASDAQ: SCHW) down to $8.95 flat-fees for online trades as well as some commission-free trading for its online brokerage trading in some of its own index-ETFs .
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Charles Schwab Corp. (NASDAQ: SCHW) has launched two new ETF products today. The Schwab International Small-Cap Equity ETF (NYSE: SCHC) and the Schwab Emerging Markets Equity ETF (NYSE: SCHE) have begun trading. The new Schwab ETFs are aimed to have very low expense ratios as each have an expense ratio of 0.35%. These can also be bought and sold (as with other Schwab ETFs) without having to pay commissions via online trading in the Schwab accounts. In short, these are no-load ETF products if you trade them through an online account Schwab.
LaBranche & Co. Inc. (NYSE: LAB) has been rumored to be making a serious change or sale for some time. Tonight, that was partially confirmed. The company has signed a sale agreement to sell its specialist operations, now called its Designated Market Maker business, to Barclays plc’s (NYSE: BCS) Barclays Capital for some $25 million. It is also purchasing all of LaBranche’s net DMM positions as of the closing date. This is not a 100% exit from all market making operations, just to be clear.
By Paul Ausick of 24/7 Wall St.
Earlier this week came an alert that a technical event was likely to be seen in the major money center banks and major financial institution stocks pertaining to the 50-day moving averages. After taking a closer look, this is now almost certainly going to come to fruition during the week between Christmas and New Years as we close out 2009. We looked at shares of Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC), and Goldman Sachs Group, Inc. (NYSE: GS) in this review. Citigroup Inc. (NYSE: C) is in a no-man’s land. Even the Direxion Daily Financial Bull 3X Shares (NYSE: FAS) and the Financial Select Sector SPDR (NYSE: XLF) show this technical alert is coming up as well. We even looked at the Direxion Daily Financial Bear 3X Shares (NYSE: FAZ) to see if anything could be seen there.
There is a key technical event that may be close to occurring in some of the major banking and financial stocks. These have all used the 50-day moving average as a key pivot point since at least July, and of late this moving average has acted as resistance as well. This may be representative of lower volatility, but if you look at the Direxion Daily Financial Bull 3X Shares (NYSE: FAS) and the Financial Select Sector SPDR (NYSE: XLF) this was particularly clear as well. We looked further into key ETF components such as JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corporation (NYSE: BAC), Wells Fargo & Co. (NYSE: WFC), and Goldman Sachs Group, Inc. (NYSE: GS). Citigroup Inc. (NYSE: C) looked like it had an entirely different chart pattern because it is in a league of its own.
E*TRADE Financial Corporation (NASDAQ: ETFC) has some good news this morning, although this could actually be bad news for those hoping for an immediate takeover. The company has been without an heir apparent in the CEO role until this morning. The online brokerage firm has named board member Robert Druskin as Chairman and as Interim CEO effective as of December 31, 2009. Druskin is well-known in the financial sector and is in his early 60’s, and this has both good and bad implications for the stock depending on how you look at E*TRADE as a prospective investment.
Meredith Whitney must be staggering her bank coverage news out to get more exposure, or at least that is a cynical take on the matter. Yesterday, she hit Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) 
BATS Exchange has been an almost stealth success in the world of trading stocks. In about four years it now claims to have about 10% of the US equity trading market share and about 8% of the FTSE 100 market share in trading volume. The company also recently filed rules with the SEC to launch US equity options trading and a second U.S. equities exchange both slated for launch in early 2010. Now it plans to launch a new ‘primary listings market’ by summer of 2010, which 24/7 Wall St. would dub the (or an) “other-other IPO market” for companies. BATS said that it wants to provide “a competitive alternative to incumbent exchanges by expanding into the US listings market.” The details were very limited in the release, so we will wait for more data and information before signing this up for the party or for the funeral.
Charles Schwab Corp.(NASDAQ: SCHW) is acting as a drag on the online brokerage firms today. Schwab warned that its fourth quarter results would come in weak due to lower trading volumes and due to increased management fee waivers over money market mutual funds. This is having a loose impact on E*TRADE Financial Corp. (NASDAQ: ETFC) and in TD AMERITRADE (NASDAQ: AMTD).
It seems that the long quest of the Chicago Board Options Exchange is going to end up in an IPO. The demutualization process has been an ongoing one and a filing from the company today confirmed what we have expected for months and months (or years). The company’s board of directors has approved plans to pursue an underwritten initial public offering of common stock of CBOE Holdings Inc. The CBOE has long been the recognized ‘brand’ for options trading, but there is competition in options and derivatives from the NYSE Euronext, Inc. (NYSE: NYX) and Nasdaq OMX Group Inc. (NASDAQ: NDAQ)… and somewhat from the IntercontinentalExchange, Inc. (NYSE: ICE).
SunTrust Banks, Inc. (NYSE: STI) is getting hit this morning, although perhaps not as harshly as the call might sound. Meredith Whitney put on her banker Scrooge hat and issued a SELL rating on the bank. She said the bank is at the wrong place at the wrong time.
TD AMERITRADE Holding Corporation (NASDAQ: AMTD) has just filed an automatic shelf registration statement with the SEC today, which many rumor mongers may jump on and point to the notion that this lends more credibility to some buyout rumors from yesterday that it may want to acquire E*TRADE Financial Corporation (NASDAQ: ETFC). AMERITRADE did not offer any terms nor any size or timing, but the offering is solely for senior debt securities and for subsidiary guarantees. As with most automatic shelf registrations, no underwriters were mentioned by name.
