WEBVTT
X-TIMESTAMP-MAP=MPEGTS:900000,LOCAL:00:00:00.000

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GLOBAL NEWS 24 HOURS A DAY, ON
AIR AND @TICTOC ON TWITTER,

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POWERED BY MORE THAN 2700
JOURNALISTS AND ANALYSTS IN OVER

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120 COUNTRIES.
I AM RITIKA GUPTA.

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THIS IS BLOOMBERG.
VONNIE: TIME FOR OUR STOCK OF

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THE HOUR.
SCHWAB ON ITS PACE FOR THE WORST

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DAY IN THREE YEARS.
THE COMPANY CUT SOME OF ITS FEES

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TO ZERO.
KAILEY LEINZ IS HERE WITH MORE.

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KAILEY: THIS WILL BE EFFECTIVE
ON OCTOBER 7.

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ELIMINATING ALL FEES.
THE BASE CHARGES FOR OPTION DOWN

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TO ZERO.
THE COMPANY THINKS THIS WILL

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HAVE AN IMPACT ON ABOUT $190
MILLION OF ORDERLY REVENUE,

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ABOUT 3% OF NET REVENUE.
THIS IS WHY YOU ARE SEEING THE

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STOCK TAKING A HIT.
SCHWAB HAD TO DO THIS IN ORDER

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TO GET INVESTORS MORE ASSETS.
I WAS LOOKING THROUGH RESEARCH

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FROM OUR ANALYSTS AT BLOOMBERG
INTELLIGENCE.

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97% OF THE FLOWS OF PASSIVE
FUNDS HAVE BEEN IN FUNDS WITH 20

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BASIS POINTS OR LESS.
THIS IS WHERE THE MARKET IS

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GOING. YOU SEE A LOT OF SCHWAB
COMPETITORS DOING THIS LIKE

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BLACKROCK AND VANGUARD .
INTERACTIVE BROKERS MADE A MOVE

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TO THE ZERO COMMISSION TRADES.
THIS IS WHERE THE MARKET WAS

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HEADING AND SCHWAB HAD TO CATCH
UP.

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GUY: PRESUMABLY THERE ARE PLENTY
OF COMPANIES THAT HAVE NOT DONE

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THIS AND WILL NOW HAVE TO FOLLOW
SUIT. KAILEY:

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THE STREET TELLING US WE
WILL SEE MORE OF THIS.

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WHEN ONE COMPANY MAKES A MOVE
LIKE THIS, OTHERS HAVE TO CATCH

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UP, OR EITHER DO SOMETHING MORE
COMPETITIVE.

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YOU ARE SEEING A LOT OF BROKERS
FALLING IN SYMPATHY.

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TD AMERITRADE DOWN 20%.
INTERACTIVE BROKERS TAKING IT ON

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THE CHIN AS WELL.
THESE TRADING COMMISSIONS ARE A

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MUCH LARGER PART OF THEIR
REVENUE THAN SCHWAB.

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FOR TD AMERITRADE, IT IS ABOUT
25%, AND FOR EACH RATE IT IS

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17%.
THEY ARE MUCH MORE EXPOSED --

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FOR EACH RATE -- FOR E*TRADE, IT
IS 17%.

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OUR ANALYST SAID THIS MAY BE THE
CATALYST FOR E*TRADE NEW

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MANAGEMENT TO CONSIDER A MURDER
-- A MERGER WITH TD AMERITRADE.

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VONNIE: A MERGER?
KAILEY: POSSIBLY.