Schwab’s Ridiculously High Commissions
Yesterday MaoXian took a look at the financials of several brokerages. He noted Schwab’s amazing average of $37.59 per trade:
Charles Schwab reported 178,000 daily average revenue trades in Q1 (62 trading days) with average revenue earned per revenue trade of $37.59 (Yow!). 89% of total trades were placed online, by the way.
A couple of weeks ago I had a conversation with a friend of mine who is a Schwab customer. She mentioned to me that she was paying around $30 commissions. I was aghast! I used to pay those rates back in the early 1990’s. I figured that the only way Schwab could justify such high commissions was if she was making broker assisted trades. Turns out that she wasn’t… all of her trades were online. After asking her a bunch of questions and digging around Schwab’s site I came to the conclusion that she was either just being taken advantage of, or just chose the wrong type of account (or both).
tagged: Charles-Schwab-Corporation-(SCHW), Commissions and Payment-for-Order-Flow
