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Commission fees fall, taking stock prices with them

Data: FactSet; Chart: Axios Visuals

After seeing its stock price plunge 26% in Tuesday trading, brokerage firm TD Ameritrade announced it would offer free stock, ETF and options trades, starting Thursday.

Threat level: Investors are worried that the race to the bottom, now clearly in full swing, will blow a hole in the profitability of online brokerage companies. Shares of the companies already were struggling this year.

  • Charles Schwab — the largest of the publicly traded brokers with 12 million customers — made the same offer to clients earlier in the day, sparking a massive selloff among the top brokerage firms.
  • Interactive Brokers cut fees to zero on stocks and ETFs last week.

By the numbers:

  • Schwab's stock fell 9% on the day.
  • E-Trade's stock dropped 16%.
  • Interactive Brokers' stock lost 9%.

Of note: TD Ameritrade makes a particularly large (25%) share of its revenue from commission fees, according to analysts at investment bank JMP Securities.