Top Brokerage firms price wars turn ugly for their investors

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There is an interesting price war going on currently in the market between top online stock brokerage firms. Just to provide some background on this front, please read this article which mentions how Charles Schwab went about lowering their commission rates for stock investing and how its affecting the entire industry.

Charles Schwab Rates Cut, Sets Price War

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This price was is taking a big toll on some of the largest players in the industry. Please keep in mind some of these brokerage firms are publicly traded companies. Fidelity investments was the latest brokerage firm to enter price wars after Charles Schwab had reduced their rates to a flat 8.95 per trade three weeks earlier. Fidleity has reduced its rates to 7.95 per trade which now lower than the three big players in online brokerage industry namely E-trade, Chareles Schwab abd TD- Ameritrade. The stocks of these companies fell by 4% in trading today when the entire market was up.

The anaylst at comparebroker are contnually monitoring the price wars and would be bringing you updates . For now their anaylsis still recommends using Tradeking , Zecco or Options House for discount trading because under $5 rates and decent service. A quick glance at the offers from the three firms are below:

1. OptionsHouse is currently running special ads for 100 Free Trades if you open your account before April 30th. On top of that, they are the cheapest as far as the commission rates go.

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2. TradeKing is the top Rated Broker by SmartMoney – 4 years running (2006-2009). It also got 4-Star Rated Broker by Barron’s – 12th Annual Survey of Best Browser-Based Online Brokers. All that is available for low flat fees – $4.95 per trade plus $.65 per options contract

3. Zecco:Best thing about Zecco is their 10 free trades every month if you make 25 trades in a month. Hence your effective rate actually becomes a lot lower than what they advertise which is 4.5$/trade. Their effective rate comes down to 2.70$ / trade, now who can beat that? See details below:

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