Time to Short Ameritrade, E-Trade, Charles Schwab?
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Bank of America Corp. (NYSE: BAC) announced today that its introduction of free online stock trading has expanded to seven mid-Atlantic and Southeast states. The company intends to speed up the program for an eventual nationwide rollout. The program lets investors make up to 30 free online equity trades per month through Banc of America Investment Services Inc. if they deposit at least $25,000 in Bank of America accounts. At this point in time, there has been "strong market demand" for the service according to Bank of America spokesman Jon Goldstein, but it still remains to be seen how many individuals will transfer their accounts to Bank of America. However, the nationwide rollout which was expected to be completed by next spring, is now currently on track for early 2007. With the apparent success Bank of America has had in their new venture, online brokerages such as TD Ameritrade Holding Corp. (NASDAQ: AMTD), E-Trade Financial Corp. (NYSE: ET), and Charles Schwab Corp. (NASDAQ: SCHW), who have yet to see this new service eat into their profits, should be on alert. The online brokerage sector fell dramatically when Bank of America first announced commission free trading on October 11 , but could see further substantial downside if Bank of America is able to pull enough customers away from the online brokerage firms and effect their bottom line.
Bank of America Corp. (NYSE: BAC) announced today that its introduction of free online stock trading has expanded to seven mid-Atlantic and Southeast states. The company intends to speed up the program for an eventual nationwide rollout. The program lets investors make up to 30 free online equity trades per month through Banc of America Investment Services Inc. if they deposit at least $25,000 in Bank of America accounts. At this point in time, there has been "strong market demand" for the service according to Bank of America spokesman Jon Goldstein, but it still remains to be seen how many individuals will transfer their accounts to Bank of America. However, the nationwide rollout which was expected to be completed by next spring, is now currently on track for early 2007. With the apparent success Bank of America has had in their new venture, online brokerages such as TD Ameritrade Holding Corp. (NASDAQ: AMTD), E-Trade Financial Corp. (NYSE: ET), and Charles Schwab Corp. (NASDAQ: SCHW), who have yet to see this new service eat into their profits, should be on alert. The online brokerage sector fell dramatically when Bank of America first announced commission free trading on October 11 , but could see further substantial downside if Bank of America is able to pull enough customers away from the online brokerage firms and effect their bottom line.
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