Schwab to Cut Fees on Options Contracts
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Charles Schwab Corp. will cut the fee it charges certain customers for options contracts by 32%, echoing a move this month by Ameritrade Holding Corp.
Schwab customers who place 30 or more trades per quarter or have more than $1 million in assets at Schwab will pay $9.95 per trade plus 95 cents per option contract, down from $1.40 per contract, the San Francisco-based company said Tuesday. Options contracts give the buyer the right, but not the obligation, to buy or sell a security at a set price.
The cut will reduce Schwab’s annual revenue by $10 million, said spokesman Greg Gable. That amount is “not material” given Schwab’s annual revenue of more than $4 billion, Gable said.
Discount brokerages have been lowering fees and commissions in a battle for market share. Fidelity Investments sparked the latest round of cuts Feb. 1, when it announced lower commissions for online stock trades for “mid-level” customers.
Schwab shares fell 20 cents to $10.18 on the New York Stock Exchange.
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