Can E-Trade Rule the New Commission-Free Realm?

How will E-Trade fare in a brave new commission-free world?

Amid news that the majority of brokerage firms are eliminating commissions on individual trades, E-Trade Financial Corp. could be a winner…

As of the end of the market day yesterday, CNN Business listed E-Trade as one of the biggest gainers with an increase of 2.25%. Although, it’s since dropped, as E-Trade traded sideways this morning.

Some analysts were also optimistic about E-Trade yesterday. Some compared E-Trade to TD Ameritrade and suggested that as the elimination of commissions changes the industry quickly, E-Trade would be a more appealing competitor.

CNN Business noted some of E-Trade’s significant value propositions, including customer service and ease of use, along with its compatibility with Google Assistant Voice.

In a world where price isn’t a differentiator anymore, some believe that E-Trade will thrive. It may be just what users are looking for: an easy way to get into the market and check accounts.

But others point to a rapidly diversifying industry with newcomers like Robinhood adding cryptocurrency options and more to the brokerage menu. This diversification, they say, could dent established brokerage chains like E-Trade and Charles Schwab.

Experts urge investors to keep a keen eye out for new fees. Brokerages will likely need to counterbalance the elimination of commissions. So anyone looking for a broker should vet what the company can offer the average trader — beyond no commissions.

E-Trade Market Moves

In rallying some 3% over the past week, E-Trade reverses a major crash from September 30 where the stock plummeted from $43 down to a low of $35.20.

Back in August, E-Trade was on a grim slide from highs near $52 to an eventual dip near $40. In fact, six months ago, E-Trade started out near $50, cresting at $51.27 April 29.

Since then, the equity is up and down. But it’s significant that E-Trade lost a full one-fifth of its value over the past year, with 52-week highs of $54.44 and 52-week lows of $34.68. For a firm with a market cap of $8.8 billion and a well-known player in its segment, that’s a troubling trend.

But now E-Trade bulls point to a range of financial services. That includes the trading of common stocks, preferred stock, futures contracts, ETFs, options, and mutual funds. This just may be a strong long-term strategy in the commission-free days to come.

Bitcoin ETF Could Be a Game Changer

An upcoming SEC deadline on a Bitcoin ETF could also be helpful to established brokers … It would offer traders an easy way to get into Bitcoin without putting a lot of money down upfront.

Keep an eye on E-Trade values as equity prices continue to oscillate. At the opening bell, E-Trade weighed in at $36.68 and moved relatively sideways for a while, countering a dip with commensurate gains.

Time will tell how E-Trade will perform throughout the day and the week ahead. Especially as markets digest the news that traders won’t be shelling out $7–$10 anymore for each trade.

Recommended For You

Leave a Reply

Your email address will not be published. Required fields are marked *