Bank of America move may hit online brokerages

Bank of America's announcement that it would offer 30 trades a month free to accounts with $25,000, raises the stakes for the pure online brokers. They are all under pressure already to diversify their revenue sources away from trades. One likely outcome a some kind of price war. The likes of TD Ameritrade and E*trade may be forced to lower commissions still more. The responses from other juggernauts, like Citigroup, JP Morgan Chase and Wachovia, will potentially be more interesting. If they jump on the bandwagon, the discount guys will have tougher road. To be sure, free trades have been tried before. It's in many ways a marketer's dream, but it did not take off before and it's unclear if customers will respond any differently now.

For more on Bank of America's move:
- Here's an article from TheStreet.com