Schwab is eliminating brokerage commissions:
Discount brokerage Charles Schwab Corp said on Tuesday it is eliminating commissions for online trading of stocks, ETFs and options listed on U.S. or Canadian exchanges.
Schwab’s latest move is likely to have a knock-on effect across the sector, forcing rivals to follow suit and eliminate commissions, experts warned.
…
The decision marks an inflection point for online brokers, as newer, nimbler rivals such as Menlo Park, California-based startup brokerage Robinhood have been capturing market share in recent years by offering commission-free stock trades.The firms are able to offer the free trading by selling their customers’ orders to so-called wholesale market makers, such as Citadel Securities and Virtu Financial, which aim to make a profit on the spread between the bid and the offer on the shares.
…
“Stocks commissions long ago stopped being a primary revenue item for Schwab, dropping to 8 per cent of revenues last year and currently under 5 per cent. Net interest income from customer deposits and asset management fees are far more important,” added [director of financial institutions research at Argus Research Stephen] Biggar in an email to Reuters.Schwab made $139 million from selling its customers’ orders in 2018, up 22 per cent from the previous year, according to a regulatory filing.
TD Ameritrade was paid $458 million for customer orders in its last fiscal year, up from $320 million the year before, according to a filing.
Asset Management fees? Yes, Schwab offers ETFs and mutual funds.
Investors will be pleased to remember that there isn’t much chance of such a thing happening here. Why should the bank-owned market-makers pay the bank-owned brokerages for order flow? They get it already! Why should they use asset management to subsidize commission trading? They’ve got it already! Thank you, securities regulators and Competition Bureau for the fine job you’ve done over the years.
Meanwhile, some distraction from impeachment proceedings has been found necessary:
As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies, they don’t have a clue. Pathetic!
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1841 % | 1,889.9 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1841 % | 3,467.8 |
| Floater | 6.38 % | 6.55 % | 47,245 | 13.16 | 4 | -0.1841 % | 1,998.5 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1690 % | 3,390.8 |
| SplitShare | 4.65 % | 4.59 % | 53,381 | 3.99 | 7 | 0.1690 % | 4,049.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1690 % | 3,159.4 |
| Perpetual-Premium | 5.58 % | -19.38 % | 59,240 | 0.09 | 6 | -0.0259 % | 3,005.3 |
| Perpetual-Discount | 5.41 % | 5.48 % | 69,879 | 14.53 | 28 | -0.1415 % | 3,178.3 |
| FixedReset Disc | 5.55 % | 5.47 % | 168,965 | 14.36 | 72 | -0.3116 % | 2,077.5 |
| Deemed-Retractible | 5.23 % | 5.79 % | 65,015 | 7.89 | 27 | -0.1908 % | 3,151.8 |
| FloatingReset | 4.61 % | 6.85 % | 56,305 | 7.92 | 3 | -0.1778 % | 2,341.2 |
| FixedReset Prem | 5.23 % | 3.57 % | 123,949 | 1.56 | 14 | -0.0888 % | 2,602.1 |
| FixedReset Bank Non | 1.97 % | 4.09 % | 85,818 | 2.26 | 3 | -0.0554 % | 2,679.6 |
| FixedReset Ins Non | 5.52 % | 8.14 % | 100,250 | 7.86 | 21 | -0.7303 % | 2,091.4 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| GWO.PR.N | FixedReset Ins Non | -3.27 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.89 Bid-YTW : 9.48 % |
| TRP.PR.D | FixedReset Disc | -3.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 15.48 Evaluated at bid price : 15.48 Bid-YTW : 6.18 % |
| HSE.PR.A | FixedReset Disc | -2.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 10.78 Evaluated at bid price : 10.78 Bid-YTW : 7.15 % |
| IFC.PR.A | FixedReset Ins Non | -2.10 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.54 Bid-YTW : 10.74 % |
| MFC.PR.J | FixedReset Ins Non | -2.06 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 18.51 Bid-YTW : 8.14 % |
| TD.PF.D | FixedReset Disc | -1.97 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 19.43 Evaluated at bid price : 19.43 Bid-YTW : 5.46 % |
| MFC.PR.N | FixedReset Ins Non | -1.92 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 15.81 Bid-YTW : 9.42 % |
| MFC.PR.F | FixedReset Ins Non | -1.84 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 12.29 Bid-YTW : 11.12 % |
| HSE.PR.G | FixedReset Disc | -1.75 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 17.40 Evaluated at bid price : 17.40 Bid-YTW : 7.13 % |
| MFC.PR.B | Deemed-Retractible | -1.51 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.48 Bid-YTW : 6.61 % |
| TD.PF.C | FixedReset Disc | -1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 17.04 Evaluated at bid price : 17.04 Bid-YTW : 5.47 % |
| CM.PR.Q | FixedReset Disc | -1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 17.85 Evaluated at bid price : 17.85 Bid-YTW : 5.85 % |
| TD.PF.A | FixedReset Disc | -1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 17.37 Evaluated at bid price : 17.37 Bid-YTW : 5.35 % |
| TRP.PR.B | FixedReset Disc | -1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 10.77 Evaluated at bid price : 10.77 Bid-YTW : 6.25 % |
| BMO.PR.Y | FixedReset Disc | -1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 18.78 Evaluated at bid price : 18.78 Bid-YTW : 5.54 % |
| CU.PR.F | Perpetual-Discount | -1.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 21.35 Evaluated at bid price : 21.35 Bid-YTW : 5.33 % |
| SLF.PR.J | FloatingReset | -1.15 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2030-01-31 Maturity Price : 25.00 Evaluated at bid price : 12.89 Bid-YTW : 11.09 % |
| TRP.PR.E | FixedReset Disc | -1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 15.51 Evaluated at bid price : 15.51 Bid-YTW : 6.07 % |
| CM.PR.S | FixedReset Disc | -1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 17.80 Evaluated at bid price : 17.80 Bid-YTW : 5.61 % |
| PWF.PR.A | Floater | -1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 11.51 Evaluated at bid price : 11.51 Bid-YTW : 6.10 % |
| BIP.PR.A | FixedReset Disc | 1.17 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 18.10 Evaluated at bid price : 18.10 Bid-YTW : 6.90 % |
| CGI.PR.D | SplitShare | 1.20 % | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2023-06-14 Maturity Price : 25.00 Evaluated at bid price : 25.40 Bid-YTW : 3.35 % |
| PWF.PR.T | FixedReset Disc | 1.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 5.67 % |
| BAM.PR.Z | FixedReset Disc | 1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 18.85 Evaluated at bid price : 18.85 Bid-YTW : 5.93 % |
| BMO.PR.T | FixedReset Disc | 1.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 17.11 Evaluated at bid price : 17.11 Bid-YTW : 5.39 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| RY.PR.H | FixedReset Disc | 106,689 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 17.60 Evaluated at bid price : 17.60 Bid-YTW : 5.27 % |
| POW.PR.G | Perpetual-Discount | 78,223 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 24.61 Evaluated at bid price : 24.87 Bid-YTW : 5.64 % |
| EMA.PR.C | FixedReset Disc | 75,130 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 18.15 Evaluated at bid price : 18.15 Bid-YTW : 5.90 % |
| TRP.PR.C | FixedReset Disc | 55,963 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 11.45 Evaluated at bid price : 11.45 Bid-YTW : 6.34 % |
| TRP.PR.J | FixedReset Prem | 40,245 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-05-31 Maturity Price : 25.00 Evaluated at bid price : 26.01 Bid-YTW : 3.30 % |
| RY.PR.M | FixedReset Disc | 37,655 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2049-10-01 Maturity Price : 18.70 Evaluated at bid price : 18.70 Bid-YTW : 5.42 % |
| There were 39 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TRP.PR.D | FixedReset Disc | Quote: 15.48 – 15.99 Spot Rate : 0.5100 Average : 0.3421 YTW SCENARIO |
| IAF.PR.B | Deemed-Retractible | Quote: 21.87 – 22.53 Spot Rate : 0.6600 Average : 0.5504 YTW SCENARIO |
| GWO.PR.N | FixedReset Ins Non | Quote: 13.89 – 14.32 Spot Rate : 0.4300 Average : 0.3224 YTW SCENARIO |
| CU.PR.F | Perpetual-Discount | Quote: 21.35 – 21.79 Spot Rate : 0.4400 Average : 0.3325 YTW SCENARIO |
| MFC.PR.O | FixedReset Ins Non | Quote: 25.65 – 25.95 Spot Rate : 0.3000 Average : 0.1971 YTW SCENARIO |
| CM.PR.S | FixedReset Disc | Quote: 17.80 – 18.15 Spot Rate : 0.3500 Average : 0.2493 YTW SCENARIO |
To my pleasant surprise, National Bank Brokerage has just lowered transaction fees to $0.95 for customers who (like me) make at least 100 trades per quarter (even though I have < $1M in assets with them).
This is particularly interesting for preferred shares, where it has up to now not usually been worthwhile undertaking small-volume trading between strong pairs due to the transaction fees.
prefQC is there a link available online for pricing. All is see is the following:
https://nbdb.ca/pricing/commissions.html
And this is usual pricing.
For some reason they seemed to have launched it rather quietly. Here is a press release: https://www.newswire.ca/news-releases/national-bank-direct-brokerage-announces-its-new-highly-competitive-fee-structure-805804390.html
Awesome. Who says there’s no competition. And I’m opening my account as we speak. Thanks so much!
Who says there’s no competition.
Rob Carrick:
what is important ? sure i would like for td waterhouse to lower the self directed commissions , but i also like the level of service i get on the rare occasion i need any . i am sure both will decline together . will the savings offset any increased difficulty in getting service ?