US subsidiary of crypto exchange FTX said on Thursday that it plans to roll out commission-free stock trading. The new service was limited to a small number of US users on Thursday.
FTX US made the announcement a week after company owner Sam Bankman-Fried acquired a minority stake in Robinhood and two days after Robinhood revealed plans for its own bigger push into crypto.
The news, which was first reported by The Wall Street Journal, comes as the S&P 500 teeters on the edge of a bear market. Stocks – and cryptocurrencies, by extension – have suffered a brutal sell-off for most of this year. The Nasdaq Composite had its worst April since 2008.
FTX US will offer fee-free brokerage accounts, commission-free trading, and market and company data. Customers will have the option to fund their accounts with fiat-backed stablecoins like USDC in addition to normal dollar deposits via wire transfer, ACH or credit card. There will be no minimum balance required for customers to maintain. Users will be able to trade certain securities on a fractional basis.
“Our goal is to provide a holistic investment service to our clients across all asset classes,” FTX US Chairman Brett Harrison said in a press release Thursday. “We have created a single integrated platform allowing retail investors to easily trade crypto, NFT and traditional stock offerings through a seamless and intuitive user interface.”
The product, called FTX Stocks, will initially route orders through the Nasdaq. The company said it would not receive any payment for the order flow. The back-end payments brokerages receive for directing customer trades to market makers have come under scrutiny as Robinhood attracts more retail investors to the market.
Instead, FTX Stocks is part of a new customer acquisition strategy the company is using, a spokesperson said. Although FTX US may initially lose money on stock trades, it hopes to recoup those losses in other ways, most likely through its crypto trading service.
“There is a clear market demand for a new retail investment experience that provides full transparency of order routing to customers and does not rely on order flow payment,” Harrison said in the press release. “As we expand product offerings and capabilities, we are excited to provide our customers with even greater choice for order fulfillment, as well as the tools they need to make routing decisions. enlightened.”
Besides Robinhood, FTX US joins fintech brands such as Square Cash App, SoFi, and Public to offer stock and crypto trading. Big crypto-native rivals like Coinbase and Binance do not offer equities, with the latter ending its equities product last year.