[On :freetrade:] Charles Schwab Corporation - SCHW

That is a great chart.

Schwab’s share price is still down 14% since their announcement, but their commissions make up only 7% of their net revenue. Looks oversold to me.

Most of Schwab’s revenue is from earnings on deposits.

See Q3/9 month ending September 2019 earnings - https://content.schwab.com/web/retail/public/about-schwab/schw_q3_2019_earnings_release.PDF

They will also sell fractionals now.

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I hold Schwab (bought since I last posted on this thread). They’re number 1, why buy a loser? TD Ameritrade is the broker with the largest percentage of commission revenue. Why not buy ETrade instead, who won’t be as impacted by the zero commission world.

There will be cost savings eventually when the platforms merge. But it’s not like they’re in a position to jack up prices.

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The rationale for buying the no.2 over the no.3 looks sound: consolidation into one business with $5trillion AUM - that’s truly staggering to me :open_mouth:

Schwab is being opportunistic by bidding for Ameritrade after their share price drop when they slashed commissions knowing they can also leverage their idle cash better:


Found this illuminating:

Schwab has opened 30% more accounts since abolishing fees: clearly a lot of people who didn’t own equities before have been tempted into the market by the simplicity of free accounts.

Source: MoneyWeek article.


I ended up selling this today at a small loss. I bought just after they dropped commissions for equity trades. But with interest rates at 0, I think there are better opportunities out there. Haven’t reinvested yet, sure that the market is going to drop again.

Freetrade Wannabes Schwab updated Android App updated this week to support fractionals