The online brokerage announced on Wednesday a new fee structure under which customers who make nine or more stock trades per month over a three month period pay $9.99 for each transaction. E*Trade previously charged most customers $14.99 or $19.99, depending on the market and type of trade. The company put the new fee schedule in place Tuesday.
"We believe that a simple, low-cost commission schedule is essential," said Jarrett Lillien, E*Trade's chief brokerage officer, in a statement.
Company representatives did not return calls seeking comment.
The move by E*Trade goes against the prevailing direction of fees in the industry. Rival Ameritrade, for instance, raised its rates last month--from its longtime charge of $8 per trade to $10.99--after itwith Datek. Meanwhile, E*Trade itself introduced fees on Individual Retirement Accounts earlier this year for customers with less than $25,000 in assets in their combined E*Trade accounts.
Under its latest fee plan, E*Trade will enroll customers who execute nine or more stock trades per month over a three-month period in its Power E*Trade service. Power E*Trade customers already pay just $9.99 per trade, but previously the company required customers to make at least 75 trades per quarter to qualify for the program.
Customers not yet enrolled in Power E*Trade will continue to pay the normal, higher commissions on their first 26 stock trades, but the company will charge the $9.99 fee for each transaction thereafter. To remain eligible for the Power E*Trade program and discount, customers will be required to continue making at least 27 trades per quarter after they enroll. If they do not make all the trades, the company will remove them from the program, but the customers will not be responsible to pay the higher price for the completed trades.
New E*Trade customers can enroll in the program without making the initial 27 trades, and will receive $99 from E*Trade after their first quarter in which they complete 27 trades. The cash-back bonus is not available to existing E*Trade customers.
In addition to the new fees, E*Trade said it will be unveiling a guarantee that qualified trades of stocks listed in the Standard & Poor's 500 index will be executed within nine seconds. E*Trade plans to put that guarantee in place at the end of the month, the company said.
"Information about the nine-second execution guarantee will be coming soon," the company said in a note to customers on its Web site.