Fidelity follows rivals in cutting online trading commissions to zero
(Reuters) - Fidelity Investments on Thursday eliminated commissions on online trades of U.S. stocks, exchange traded funds (ETFs) and options, becoming the latest brokerage to cut trading fees to compete with new entrants in the market.
Last week, rivals Charles Schwab Corp <SCHW.N>, TD Ameritrade <AMTD.O> and E*Trade Financial <ETFC.O> also stopped charging commissions on online trades.
Newer rivals such as Menlo Park, California-based startup brokerage Robinhood have been capturing market share in recent years by offering commission-free stock trades, forcing traditional brokerages to follow suit.
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 <VIRT.O>, which aim to make a profit on the spread between the bid and the offer on the shares.
Fidelity said the change will take effect on Thursday for individual investors and Nov. 4 for investment advisers. (https://reut.rs/2OCjtrq)
(Reporting by C Nivedita in Bengaluru; Editing by Saumyadeb Chakrabarty)
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