Commission-free trade is a new challenge for the financial markets; as such, the time for completing the stock market trade will now be shortened. Such announcements made on behalf of Interactive Brokers Group to eliminate the trading fees brought in mixed reactions in the financial markets.
Ex Nasdaq CEO, Bob Greifeld, while announcing his retirement from the Nasdaq platform, talked about the impacts that the commission-free trading is going to have on the financial markets. He served Nasdaq as the CEO for 13 long years, before he decided to retire. Nasdaq’s transformation from a bare money loser to a more diversified and hugely profitable international exchange happened under his leadership. However, this transformation involved millions of dollars and a steady endeavor on the part of the exchange.
When he was asked about the impacts, he sounded quite skeptical about the recent developments in the financial market. Talking about the zero-commission trading, he said that if the small investors can give up some price improvements in their orders, then only this zero commission trading can keep up to their expectations of earning profits. He also added that as the commission changed from $5 to zero; it will not have that much effect on the behavior of the investors so that they will move away from their buying and holding behavior.
He also said that it is high time that the investors move from their passive investing behavior to resurgent active management. More active management can easily adapt to the commission-free trades as compared to passive investors.