Schwab Reduced Online Fees Again

Last month, Charles Schwab Corp. said it will cut trading fees again, lowering commissions on many of its online-investor customers by 35%. It was not the first cut of Schwab, which meant that prices in the online-trading industry would continue to be squeezed. The lowering commissions of Schwab would benefit about a million households. Schwab’s cutting trading applies to domestic individual investors with assets between $50000 and $1 million at Schwab. As a result, their base online trade commissions drop from $ 19.25 to $ 12.95. Also, this move applies to investors who make 9 to 29 trades a quarter. With last year’s price cuts, Schwab now has a pricing schedule with commissions of $ 9.95, $ 12.95, or $ 19.95, depending on assets and trading activity. It was a big decline comparing a $ 29.95 base commission for many trades last year.

The fees were first reduced by the San Francisco Company last year, Schwab followed; as well as Instinet Group Inc., Scottrade Inc., and Fidelity Investments, which have lowered fees recently in order to attract more price-conscious Internet traders. As a result, Instinet Group Inc. which runs an electronic stock trading network and an institutional-brokerage operation posted a fourth-quarter profit $ 18.7 million with an expenses fell 26%.

On the other hand, Schwab shares fell on the news, dropping 32 cents, or 3%, to $ 10.38 in 4 p.m. NYSE trading Friday, February 4. Trading value was about 19 million shares, nearly three times the normal volume. Over the past 52 weeks, the stock has traded as high as $ 13.11 on Feb 18 2004, and as low as $ 8.25 on July 19.

I visited the Schwab website, and learned a little bit about how to buy and sell stocks through Schwab. I think it is very easy and convenient to trade stocks through Internet. I also went through the commission fees on the Schwab, I think they are reasonable. However, for investors, it is good that they are cutting the trading fees. I think there may be more people interested in online investments; and however, the companies would get profit as as a result.

If you are interested in this, or you want to take a look at the website, you can visit Schwab at www.schwab.com.