TD Waterhouse joins the discount party

From Monday 17 April, TD Waterhouse will be offering online trading up to $10,000 at $14.95, matching Comsec in this trading range. This rate applies to market orders, while an extra $4 per online trade is charged for limit orders. TD Waterhouse are also offering a frequent trader discount of 10% of monthly brokerage for online traders.

While we have seen Comsec passing on discounts where they are able to process trades more efficiently and others (HSBC, National Online Trading) allocating discounts to frequent traders, TD Waterhouse are the first online broker to charge separate fees for market and limit orders. Market orders are matched against the best market price at the time the order is entered, while limit orders allow you to set a maximum or minimum price at which you are prepared to buy or sell. Generally, market orders can be processed more efficiently as less monitoring of the order by the broker is required.

The message given to online broker customers in the past two weeks is to get off the phone and step up the number of trades if you want to take advantage of lower brokerage rates. We can expect to see further customisation of fees and services as price tension in the industry increases.