Banking & Finance

Electronic Trading Price Wars (AMTD, SCHW, ETFC, IBKC)

Oddly enough, Interactive Brokers is the one e-Broker trading higher today with a 1.5% gain to $16.38.  Charles Schwab (NASDAQ: SCHW) is down 1.3% at $18.19 today.

ETFs have been competing with stocks and no-load mutual funds and in mutual funds with a load.  They have taken more and more market share and are becoming more and more accepted by the retail and institutional investors.  As there are some poor strategy mutual funds, there are some poor strategies outlined by ETFs.  But asking whether there will be more or less ETF products or less ETF products down the road it seems that the safer bet would be on betting-the-over.

A price war is good for customers.  These same price wars are rarely good for the suppliers of goods and services, in this cases the electronic brokerage firms.  This is definitely not the first price war in online trading fees.  It is likely not the last.

JON C. OGG
FEBRUARY 2, 2010

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