Fidelity Investments said on Tuesday it cut the price on trades for stocks and exchange-traded funds by 38% for retail brokerage clients.
Boston-based Fidelity’s price reduction to $4.95 from the previous commission of $7.95 a trade, will likely put pressure on the rest of the U.S. brokerage industry. Fidelity’s price offers a discount of more than 50% when compared with some rivals.
“It puts the flag up that Fidelity is the value player in investing,” said Ram Subramaniam, president of Fidelity’s retail brokerage business.
Discount brokers TD Ameritrade Holding (AMTD) and E*Trade Financial each charge $9.99 per trade and Charles Schwab (SCHW) charges $6.95.
Fidelity said it also reduced option pricing to $0.65 per contract, down from $0.75. Fidelity’s online brokerage business has 17.9 million accounts and $1.7 trillion in total client assets.