Quote:
Originally Posted by DaFace
I'd assume they're betting that they'll make more money on people switching to them and using their other services than they do on commissions.
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People have been predicting for a few years that we'll see Brokers pay us to make trades. DaFace is right. I'm sure they hope you'll turn on margin, trade some options, banking, credit cards, financial planning. Even if you never touch any other service though they sell your order flow for profit, loan your shares out short, most traders keep cash in their account which they profit off of. It's probably a loss leader going to 0 but it likely makes sense to get people into the ecosystem.
I thought they'd drop to 2.95 or something first. JP Morgan came out with a 2.95 service last year. Vanguard made 99% of ETF's free trading last year.