CyberTrader Inc., the direct-access subsidiary of the Charles Schwab Corp., is reducing commission rates for active traders by eliminating electronic communication network (ECN) and exchange fees and option charges, the company announced Wednesday.
Creating a dual-commission schedule, CyberTrader will let customers choose a commission rate based on order size or trading frequency. Users of CyberTrader Pro, its most sophisticated trading platform, can be billed on a "per trade" basis of $9.95 plus $.003 per share for trades of more than 5,000 shares, or a "per share" basis of $.006 per share up to 2,000 shares and $.003 per share above that amount. CyberTrader says a 100-share trade could be done for as little as $1.
"Our intention is to continue to find ways to increase CyberTrader's value to active trades," said Andy Gill, senior vice president of Schwab's Active Trader business, in a statement. Gill said this will give traders greater flexibility and the chance to reduce trading costs by eliminating ECN and exchange fees and cutting options commissions.
CyberTrader competes most directly with online brokers with direct-access trading technology such as Ameritrade and E-trade.
The elimination of ECN and exchange fees, which average $.005 per share among the 12 different ECNs or exchange venues, can save traders up to $25 on a 5,000-share order, depending on the trading venue. The broker also reduced commissions on all options trades from $9.95 plus $1.50 per contract to $9.95 plus $1.00 per contract.