By Karim Rahemtulla On Tuesday, Charles Schwab (NYSE: SCHW), the pioneer in low-cost commissions, lobbed a grenade onto Wall Street.
It announced that it was going to a zero-dollar commission structure on all trading.
To put this in perspective, let’s go back to the ’90s. Back then, just before the advent of online trading, brokers could charge up to 5% of the amount of a transaction as their commission charge – both entering and exiting the trade.
For a $20,000 trade, that could amount to as much as $2,000 in commissions. Very few brokers were that egregious, however, and usually they charged around 2% each way.
Still, …read more
