New York (CNN Business)Charles Schwab fired the latest shot in the war over fees charged by online brokers, announcing Tuesday that it plans to eliminate commissions for trading stocks, ETFs and options on its mobile and web platforms.

Schwab’s news comes a week after rival Interactive Brokers Group rolled out its new IBKR Lite service, which also eliminated commissions for US-listed stocks and ETFs. The entire discount brokerage industry is dealing with tough competition from upstarts like Robinhood, which already offer trading services with no or low commissions via popular mobile apps.

“From day one, my passion has been to make investing easier and more affordable for everyone,” said Charles Schwab, the company’s chairman and founder, in a statement. “Eliminating commissions ensures my ultimate vision is realized — making investing accessible to all.”

    Charles Schwab CEO and president Walt Bettinger added that “price should never be a barrier to investing for anyone, whether an experienced investor or someone just starting on the investing path.”

    Shares of Schwab (SCHW) fell 8% on the news, as investors clearly seemed worried about the loss of a lucrative stream of revenue from fees and the potential impact this would have on Schwab’s profits. The company had been charging commissions of $4.95 a trade.

    Interactive Brokers (IBKR) shares tumbled 6%. Competitors TD Ameritrade (AMTD) and E-Trade (ETFC) were hit even harder, with both stocks plummeting about 20%. Investors will probably expect both discount brokers to counter the moves of Schwab and Interactive Brokers or risk losing market share.

    Both companies still charge standard commissions of about $6.95 a trade.

    TD Ameritrade spokeswoman Becky Nilya said in a statement to CNN Business that it was too soon for the company to respond directly to Schwab’s move.

    “The news just came out,” Nilya said. “We’re committed to delivering the best experiences for our clients. We have the best platforms, award-winning service and investor education, an extensive branch network, and the best price improvement in the industry. And, we will remain competitive.”

      E-Trade was not immediately available for comment about Schwab’s new pricing structure and whether they planned to match it.

      Robinhood had no comment about whether it’s concerned about increased competition from Schwab, Interactive Brokers and the rest of the traditional discount brokerage industry.

      Source: http://edition.cnn.com/

       

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