Online Stock Trading is Free Now

  • New York (CNN Business)There is no such thing as a "discount broker" anymore. In the span of just a few days, nearly every major online brokerage company eliminated commissions. It's now essentially free to trade.

    So what will companies like Charles Schwab (SCHW), TD Ameritrade (AMTD) and E-Trade (ETFC) do now to differentiate themselves in an increasingly crowded market where price is no longer a selling point?

    "In a world of equal footing, it's all about what you are offering," said Steve Quirk, TD Ameritade executive vice president of trading and education, in an interview with CNN Business.

    Quirk said that there is more to investing than just free commissions. He argues that TD Ameritrade offers more services and advice than many of its rivals to help people who have questions about what types of stocks and ETFs to buy.

    E-Trade touted its customer service and easy-to-use technology. The company recently launched a service that lets clients use Google Assistant Voice commands to check their brokerage accounts, for example.

    Brokers need to tout products that go beyond zero commission trading

    "Price really hasn't been a competitive differentiator for some time, and we have always believed it's about the customer experience more than anything else," said Alice Milligan, chief customer officer for E-Trade, in an e-mail to CNN Business.

    Schwab was not immediately available for comment for this story.

    Online brokerage business growing increasingly crowded

    Competition in the industry remains brutal.

    Several other companies have announced plans for brokerage services with no commissions in the past week. And many are adding their own twist to try and stand out from the pack.

    Robinhood, one of the first online brokers to go to zero commissions when it launched in 2013, put out an ad this past weekend about the moves made by Schwab, TD Ameritrade and E-Trade. The tagline: Change Doesn't Happen Overnight Until it Does.

    Ally Financial's (ALLY) online brokerage arm Ally Invest touted portfolios that allow risk-averse investors to hold up to 30% of their money in cash, for example.

    Stocktwits, a social networking firm for traders, launched its own no-fee online brokerage offering too. Phil Pearlman, chief community officer for Stocktwits, said the company hopes to take advantage of the fact that younger traders want to share ideas. So as part of its Trade App online brokerage, users can post — or "tradecast" their history of trades.

    "This is the heart of social trading. You make a trade and it's there for your followers to see. It's a trusted ledger of your trading history," Pearlman said.

    Stocktwits is also offering fractional trading, which lets people invest as little as $5 to buy a small percentage of a stock instead of a full share. That can come handy in for someone that doesn't have a lot of disposable income to invest and wants to buy a piece of a company like Amazon (AMZN) or Google owner Alphabet (GOOGL), which each trade for more than $1,000 for just one share.

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