TD Ameritrade to Not Participate in Price Wars Among Stock Brokerage Firms

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TD Ameritrade CEO Tomcyzk said today he does not plan to indulge in the price wars that its rivals Fidelity and Charles Schwab have entered into. First Charles Schwab reduced its trade from $ 12.95 a trade to $ 8.95 a trade. This was followed by Fidelity which used to charge anywhere between $8 and $19.99 to flat $ 7.95 per trade.

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The CEO of TD Ameritrade said that they would wait for the market to settle and then decide on what price to charge the consumers for trading. Their focus till then would be to provide great tools for RIA’s (Registered investment advisors) who would be trying independently to get large client for TD Ameritrade. TD Ameritrade plans to increase the assets invested through brokerage firm to $33 billion from $ 27 billion currently.

What it means for TD Ameritrade clients is probably they should look at alternatives like Tradeking or E-trade for opening brokerage services. TD Ameritrade is going upscale and changing its business model for people who have millions of dollars to invest. For millions of other people who do not have millions of dollars to invest a smaller brokerage firm like Options house or Tradeking might be useful. Details on popular offers from these firms are as following:

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

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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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