What Is May Day?

The stock market changed 🍷forever on May 1, 1975, a d🥂ate commonly referred to on Wall Street as May Day. This was the date when brokerages were first allowed to set their own commission rates rather than charging a set price for stock trades.

It was the first time in 180 years that trading fees 🌠would be set by marketplace competition instead of a fixed price.

Understanding May Day

Prior to the May Day changes, brokers charged a fixed-rate commission for all traders, regardless of the size of the tradeꦇ.

That meant that small investors paid a high percentage of their potential ♚profits in fees and commissions, Brokers risked being expelled if they charged a 🐻lower price to any investors.

The Securities and Exchange Commission's move to deregulate trading fees was controversial. Then-New York Stock Exchange Chair James Needham opposed changing the fee structure, citing the securities industry's struggle to recover from an earnings slump. (Earlier, as a member of the Securities and Exchange Commission (SEC), he had expressed skepticism that such a move would drive brokers out of business.)

Brokers opposed the moveﷺ as it would cut down on their overall commissions. Some even referred to the SEC꧂ as the Soviet Economic Committee.

May Day's Aftermath

May Day opened the way to the creation of discount stock brokers. As commission prices fell, brokers began offerinꦚg new trading services that c🔯harged lower rates but didn’t offer advice to investors.

The creation ofღ discount ✤brokers gave rise to a new do-it-yourself-investor class who conducted their own research and paid lower fees for their trades.

Among those leading the way was 澳洲幸运5官方开奖结果体彩网:Charles Schwab, who founded his namesake company in 1971. The Charles Schwab Corp. began offering discounted stock trades in September of 1975. Other discount brokers followed, paving the way for the online 澳洲幸运5官方开奖结果体彩网:discount brokerages we use today. 

Discount Brokers

D🐼iscount broke𓆏rs have flourished In the years since May Day 1975, but the number of competitors soared with the introduction of online trading.

A ret𝔉ail investor can open a trading account with a dollar—although the minimum deposits vary by broker—and trade stocks for free. Most charge small fees for transactions 🐷in other assets such as mutual funds.

Discount brokers don't typically offer personal investment advice, yet many have expanded their services to offer online coaching and make financial advisors available via online chat and phone to answer investors' questions.

澳洲幸运5官方开奖结果体彩网:Charting packages and fundamental research are also provi𝔍ded by most discount brokers, although it is the job of the investor to sift through the information and make their own tr🍃ading decisions.

Examples of Commission Structures Following May Dayᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚ

Commission-free trading of stocks became common around 2019, as online brokers entered a price war amid stiff competition. At least 10 online brokers now offer commission-free stock trades.

🥃 Most have some limits to that deal, and many charge a commission on trades of some assets such as mutual funds and options. They also offer premium services for a fee.

Anyone signing up for a new service should check for hidden fees. Stock trades may be free but there might be, for example, an inactivity fee, charged if a cl🌠ient doesn't make anyꦅ trades within a specified time frame.

Most discount brokers provide a trading platform, charting functionality, fundamental research, news, and online help. Before choosing a broker, look for a 澳洲幸运5官方开奖结果体彩网:demo account to asܫsess the functionality and any cost𒅌s of trading.