In its latest competitive bid to gain a larger portion of the online brokerage market, E-Trade (NasdaqGS: ETFC) will begin offering commission-free trading on 93 exchange traded funds.
According to E-Trade, clients will be allowed to buy and sell 93 ETFs from three fund sponsors: Deutsche Bank’s db-X, Global X and WisdomTree.
Potential investors should note that short sales, buy-to-cover and buy-write orders do not fall under commission-free trades. Options and options-exercise-related transactions are also not eligible. ETF trades will incur a small fee if the fund is sold within 30 days of purchase to discourage short-term trades.
It should be noted that while commission-free trades is a plus, long-term investors should look at a fund’s expense ratio when considering the total cost of the ETF investment.