Legend: ✅ direct source â˜‘️ 3rd-party source 💭 interpretation


Welcome back, insiders! You probably already know..

  • Charles Schwab the Sanfransico-based bank and broker bought TD Ameritrade back in late 2019. TD is/was one of the leading discount-broker providers, most notoriously known for it's ThinkorSwim platform aka TOS
    • There's a lot of rumors spreading regarding retail's ability to keep trading on TOS
    • So if you're an active trader or investor looking for the truth, this video is for you.
  • Here's what we'll discuss:
    • This all started back in 2019 so we'll catch up on the whole timeline
    • Once we get caught up we'll also discuss the road map ahead for TD users
    • We'll review risk//rewards for users
      • Including changes to your account
      • Changing perks like the interest on your idle cash
      • Effects on TOS
      • Clear up Margin and settlement rumors
    • And no finance video would be complete without a look at some charts.
      • We'll wrap up with SCHW price analysis since the merger
      • & analyze some comps
  • Also change of background today, we're in Austria.

TD to Schwab Rumors EXPOSED

0:00 Schwab Buys TD Ameritrade History
3:20 TD to Schwab Transition
4:44 Schwab Account Risks
7:00 Schwab Fees & Commissions
11:11 TradeJournal.co Sponsor
12:08 Schwab Margin Requirements
13:30 T+1 Settlement Period May 28th!!
15:33 SCHW Stock Price & Comparables

 

Transition Process and Timeframe

Start Date & Transition Phases

  • ✅ 11/25/2019 Official PR (Pressroom Schwab)
    • ✅ All-stock transaction valued at approximately $26 billion - a 17% premium over the 30-day volume weighted average price exchange ratio as of November 20, 2019
      • 💭 Typical for acquisitions to have a premium
      • ☑️ Google buying HubHubspot for 30% premium spot for 30% premium (Fool)
    • ✅ 12 million client accounts, $1.3 trillion in client assets and $5 billion in annual revenue. We expect this added scale to lead to lower operating expenses as a percentage of client assets (EOCA), which helps fund enhanced client experience capabilities, improve the company’s competitive position and further its financial success.

Completion & Further Roadmap

  • ✅ Start combining the firms in 2020​ (About Schwab FAQ)​.
  • ✅ The integration is expected to take between 18 and 36 months
  • ✅ Client account transition to Schwab began with a small group in February 2023, further transitions planned in stages throughout 2023 (4 phases) and a small group in early 2024. (Schwab)
    • ✅ This phased approach was chosen to ensure a smooth client experience and to avoid trading disruptions​
  • ✅ By November 2023, Schwab had completed its fourth round of client account conversions, including a significant number of trader clients and ToS users.
  • ✅ Schwab plans to finish transitioning all remaining Ameritrade client accounts in the first half of 2024, having already converted nearly 90% of Ameritrade accounts and 100% of the Registered Investment Advisor (RIA) firms previously custodied at Ameritrade​ (About Schwab)​.

 

Risk/Reward & Trading Platforms

Risks

  • ✅ Integration Challenges: As with any merger of this scale, there could be operational and integration challenges that may temporarily affect clients' trading experiences. (About Schwab)​
  • 💭 TOS active trading delays / freezes, lots of traders complaining about, no hard evidence
  • ✅ Staff Reductions: The integration will involve staff reductions, primarily in overlapping and duplicative roles, which is a standard part of achieving overall expense synergies in such mergers​ (About Schwab)​.
  • 💭 TD had pretty good support, 8/10 I'd give it. Schwab discusses a lot about reducing redundancies like duplicate staff. If they cut too much maybe issues going forward? Idk. I used to like calling TD support if there were any little issues or even random questions.

Reward (Benefits)

  • ✅ Enhanced Trading Platforms: The acquisition brings together the ToS platforms with Schwab’s trading capabilities, including Schwab.com and Schwab Mobile.  (Schwab Trading)
  • 💭 Not platforms I've heard traders care about, probably a big reason Schwab wanted TOS, utilize order for payment flow. What was popularized by Robinhood.
    • Best the have to offer (Schwab)
  • 💭 Thinkpipes A powerful, innovative platform designed to help advisors trade the way they want.

 

  • ✅ Innovative and Client-centric Products: The merger is expected to expand Schwab's "no trade-offs" approach by combining the best offerings from both firms, including leading trading platforms, investor education, retirement services, and asset management​ (About Schwab)​.
  • ✅ Commissions (Schwab)
    • $0 Stocks ETF's
    • $0 base options + $0.65 per contract, $0 Mutual Funds  
    • $6.95 commission per over-the-counter stock trade.
    • $2.25 futures and futures options per contract, plus exchange and regulatory fees.
    • $0 commission for forex currency trading. Trade cost is reflected in the bid/ask spread.
    • 💭Call Schwab, ask to get options lowered, plus test out there support
      • TD = $0 base options + $0.65 per contract at TD
      • TD = $6.95 commission per over-the-counter stock trade.
  • ✅ Current margin rates 11.825% - 13.57%
  • 💭 TD was 12.75% - 14.75%
  • ☑️ As of February 2024, Charles Schwab offers up to 0.5% interest on USD uninvested funds in your trading account. Same as Robinhood. (BrokerChooser)​.
  • ☑️ TD Offered up to 0.4% interest on USD uninvested funds in your trading account (BrokerChooser).​

 


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  • ✅ Margin Requirements on Certain Securities (Schwab)
  • 💭 No mention of settling period holdings
  • ✅ T+1 settlement period, May 28, 2024 (Schwab)
  • 💭 Could fuel a momo wave, when I had did my $25k small account challenge I started with a $6k account and did 3 $1k trades on Monday and again Tuesday, then on Wednesday I had Monday trades settled so now I can do 6 $1k trades each day. BIG Difference for market vol potentially. DOUBLE.

 

Stock Chart SCHW

  • ✅ 13.52% HOD & 6.69% EOD Green Day On Merger News
  • ✅ ~47% up since merger news April 11th EOD
  • 💭 Is there a play here? IDK $130B MC
  • ✅ Already one of the highest priced banks (Finviz)
  • 💭 Feels weak, divergence on price inc and strength (vol)