E-Trade drops commissions on trades, joining Schwab, TD Ameritrade in brokerage fee war

• E-Trade is getting rid of commission fees on U.S. stock, ETF and options trades. 
• The move comes within a week of Interactive Brokers, Charles Schwab and TD Ameritrade all dropping their commission fees.
• E-Trade estimates a quarterly revenue impact of $75 million from dropping fees. 

Pedestrians walk outside an E*Trade Financial office in New York.

Daniel Acker | Bloomberg | Getty Images

Retail brokerage firm E-Trade announced Wednesday it will drop commission fees on online U.S. stock, ETF and options trades.

The move comes within a week of Interactive Brokers, Charles Schwab and TD Ameritrade all dropping their commission fees. Shares of all the brokerage firms have been getting hit this week on fears that a lack of commission revenue with hurt margins.

E-Trade's new fee structure will start on October 7. Options will still have a 65 cents charge per contract.

""With this new commission schedule we are further raising the bar, delivering an unrivaled experience at price points that cannot be beat," said E-Trade chief executive officer Mike Pizzi in a press release.

E-Trade estimates a quarterly revenue impact of $75 million from dropping fees. The stock dropped 5% after hours following the announcement.

Bank of America estimates E-Trade gets about 17% of revenue from commission. TD Ameritrade generates 28% of revenue from commissions and Schwab generates only 8% from revenue.