In a surprising shake-up of the brokerage industry, Interactive Brokers and Charles Schwab both announced recently that they would be dropping commissions on stock trades. Then other leading brokerages followed suit, including TD Ameritrade (NASDAQ: AMTD), which slashed its trading commissions from $6.95 to $0.
At first glance, a $0 commission business model might not seem like a great way to make money. Don't be so quick to judge. There are a couple of good reasons why this could actually be a net positive over the long run for TD Ameritrade and its investors.
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