E-Trade cuts commissions to zero along with rest of brokerage industry

E-Trade announced Thursday that it will eliminate commissions for its clients. The changes take effect on October 7.

"With this new commission schedule we are further raising the bar, delivering an unrivaled experience at price points that cannot be beat—main street investors will now trade the stocks and ETFs of their choice for $0," said E-Trade CEO Mike Pizzi in a statement.

The news comes one day after rivals Charles Schwab and TD Ameritrade both eliminated commissions. Last week, a smaller competitor, Interactive Brokers Group, started its new IBKR Lite service, which also eliminated commissions for US-listed stocks and ETFs.

Shares of all four companies were hit hard in the past two days as investors worried about the impact that zero commission trading would have on their profits. After all, a once-lucrative revenue stream will now disappear.

To that end, E-Trade said in its release Thursday that it expected a quarterly revenue hit in the current quarter of approximately $75 million as a result of the commission eliminations.

E-trade's move was all but inevitable after E-Trade after Schwab and TD Ameritrade each announced Wednesday that they were ending commissions for investors trading stocks, futures and options. E-Trade had been charging $6.95 as a standard commission.

Several angry E-Trade customers ranted on Twitter Thursday about the company not immediately following suit, with several threatening to take their business elsewhere.

The official, verified E-Trade Twitter account responded to some of those complaints with messages urging patience and promising "exciting news coming soon!"

The entire discount brokerage industry is dealing with brutal competition from upstarts like Robinhood, which already offers trading services with no or low commissions via popular mobile apps.

Robinhood, a private company that is currently valued at $7.6 billion according to research firm CB Insights, is now worth almost as much as E-Trade -- which has a market value of $8.4 billion.

Jack Randall, a spokesman for Robinhood, said in a statement to CNN Business Wednesday that "the changes taking place across the brokerage industry reflect a focus on the customer that's been inherent to Robinhood since the beginning.

"We remain focused on offering intuitively designed products that reduce barriers to our financial system, including account minimums and commission fees," he added.