Chase Manhattan is the latest bank to fire a shot in the deep-discount on-line trading wars.
Last week Chase's no-frills discount brokerage subsidiary, Boston-based Brown & Co., slashed fees from a flat rate of $19 per trade to $5 for a market order and $10 for a limit order, said Gregory A. Rotella, president of Chase Investment Services Group.
Market orders are placed at the best available price, whereas limit orders are placed only when a security reaches a price determined by the customer beforehand.
Brown has also added Internet trading to a lineup that already included live brokers, telephone trading, and personal computer trading, Mr. Rotella said. The fee cuts apply no matter which channel a customer uses.
The cuts bring Brown's rates in line with those of its closest competitor among banking affiliates, Suretrade Inc., which charges a flat $7.95 per trade. Suretrade is a unit of Quick & Reilly, which was recently acquired by Boston-based Fleet Financial Group.
Brown & Co. is headed by George Brown, who is featured prominently in its advertising. Chemical Banking Corp., now Chase Manhattan, bought Brown in 1980.
Mr. Rotella said the price cut was partly driven by the need to remain competitive."Obviously there has been a lot of competition around," he said.
However, he added, "we feel the need to have a continuum that starts with George (Brown & Co.) in deep discount and goes all the way up to advice in a very personalized way."
From $5 at Brown, he noted, Chase customers can go to a minimum of about $50 a trade at Brokerage Line, Chase Investment Services' brokerage service. There, customers can trade by phone or personal computer. And for those who need more hand-holding, Chase charges a minimum of roughly $100 through its advice-based channels.
The $50 and $100 fees are not flat rates but depend on the number of shares traded, Mr. Rotella said.
He also noted that Brown, traditionally an equity-only company, would add mutual-fund trading capabilities over the next month.
The "self-directed active traders" who use Brown will now be able to choose from among several hundred funds, including Chase's Vista Funds, which will be offered along with third-party portfolios, Mr. Rotella said.
