Charles Schwab & Co. Inc. is eliminating online trade commissions for stocks, exchange-traded funds and options listed on U.S. or Canadian exchanges and across all mobile and web trading channels beginning Oct. 7, the company announced today.

Schwab will reduce U.S. stock, ETF and options online trade commissions from $4.95 to zero, though clients trading options will continue to pay 65 cents per contract, according to a press release. Schwab clients using the company's web and mobile channels automatically qualify for the new pricing without opening a new account, making a new deposit or maintaining a minimum balance of any type.

The announcement sent the discount brokerage firm's stock down 10 percent in late-morning trading. At the same time, shares of rival discount brokerage firm TD Ameritrade fell more than 20 percent.

In conjunction with the fee cuts, company founder Charles Schwab is releasing his latest book, “Invested.”

Peter Crawford, Schwab's chief financial officer, said in a prepared commentary that elminating online trade commissions removes one of the last remaining barriers to making investing accessible to everyone and continues Schwab’s tradition of challenging the status quo on behalf of individual investors.

"Additionally, it’s the right move from a competitive standpoint," he said.

Crawford added that based on recent activity, the pricing reduction is estimated to be equivalent to approximately $90 million to $100 million in quarterly revenue, which roughly translates to 3% to 4% of total net revenue. He noted that the potential revenue impact in coming quarters could be smaller because commissions per revenue trade have been falling for multiple years.

Of course, Schwab will still be able to earn money going forward from market-making, margin loans and other activities.