Zecco - free stock trades

I just saw this on GigaOM:Skype backer takes on ETrade with free trades

Morten Lund, the guy who was the earliest backers of Skype is at it again. He has financed Zecco, a start-up that will allow consumers to trade stocks for zero commissions, versus $10 to $20 that many online brokers charge today. Other investors in the company include former Dutch Coca Cola CEO Pier Baarsma and Soren Kenner former chairman of McCann Erickson MRM Europe

CEO Jeroen Veth, a 37 year old entrepreneur and former Merrill Lynch Vice President is heading up the company and contends that most of the old school online brokers spend too heavily on marketing and thus have to charge higher prices. Lund and crew believe that the actual trade costs about $2 and if they can lower the cost of marketing to near zero, they can offer zero commission trading. They will make money with what else - advertising.

"Our model is different. We run a lean operation, use the latest technology and rely entirely on word of mouth, guerilla marketing, viral campaigns and public relations to get the message out. As a result we can look at the $2 per trade as the cost of doing business – and still turn a tidy profit"

Zecco, in company’s own words is at “the intersection where online brokerage meets Yahoo Finance and Myspace,” and offers tools such as free blogging, forums etc. The big question is can they make it happen? My gut says that there will be some who will be attracted to this service because of its free nature.

Others will show up at the service because of the forums, and the community, and many are already looking for options to Yahoo Forums. In the long run this could cause old school companies to look at their own pricing structures hard and lower their prices. But can Zecco be the next ETrade, well not sure about that. What do you think?Seems that the service is about 18 days away from going live.
Zecco

This too shall pass; but, it may be fun while it lasts.

We lose money, but make it up in volume!

It says you can open an account on 10/9...free is free! It would be nice if they give you some free money to invest too, no?

Sweet, this is what I've been waiting for.

I'm gonna buy $1000 worth of the S&P 500...as each of the 500 individual stocks

LH2004 said: b0mbrman said: I'm gonna buy $1000 worth of the S&P 500...as each of the 500 individual stocks You jest, but that's what I'd love to be able to do -- and constantly sell whatever's down and hold whatever's up, to create a great big capital loss machine.

But I forsee this heading the same place as everyone who's tried it before. And remember, it's going to be some serious commissions to get rid of all those stocks with somebody else.

Oh, I'd love to do it in all seriousness, as well.

Or, alternatively, own different market sectors (S&P 500, small cap, developed int'l, emerging markets, etc.) in ETFs and rebalance every week.

b0mbrman said: Or, alternatively, own different market sectors (S&P 500, small cap, developed int'l, emerging markets, etc.) in ETFs and rebalance every week.If you're dealing with baskets that large and trading that infrequently, you can afford to pay some more substantial commissions. Trading, say, 10 times a week, or about 500 a year, with a portfolio of, say, $200,000, MBTrading- or sogoinvest-level commissions would be pretty tolerable as a fraction of assets. I'd love to be trading individual stocks, maximizing security-specific volatility, trading maybe 1000 times a week, just for the sake of realizing losses for tax purposes; even $1 a trade would then be pretty outrageous.

This aught to be intresting. Free trades have been tried before. I wonder what makes them think it will work or do they even care. From what I understand they already have a website and are just adding the feature that will allow trades.

Also if they are going to pay the bills with advertising then the customer has to pay by being bombarded with pop-ups and flash ads while they are trying to decide on which stock to pick. I will keep and open mind though.

Reminds me of freetrad.com from Ameritrade. I need to hear a more compelling reason than just free trades to get me over there. Super low margin rates, high credit interest rates, something...

TTrader said: Sounds right on the money Russler. I think I am going to go with sogo. At least I know the CEO William Yeh knows what he is talking about. I just checked him out and he has a huge background with the market. He already has a company that handles high volume trades for huge companies called genesis securities. He created sogoinvest to offer these same discount cost per trade prices to the individual investor. Who is creating zecco? and what is their purpose? That is what i want to know.

From the OP:

Skype backer takes on ETrade with free trades

Morten Lund, the guy who was the earliest backers of Skype is at it again. He has financed Zecco.... Other investors in the company include former Dutch Coca Cola CEO Pier Baarsma and Soren Kenner former chairman of McCann Erickson MRM Europe

CEO Jeroen Veth, a 37 year old entrepreneur and former Merrill Lynch Vice President is heading up the company....

H&R Block's financial advisor side has offered commission free trading for over a decade (mkt or limit)

the catches are you must have over 500k with them (in one act) and each trade has to be over 1k shares in size

Alfredo Gutierrez from Zecco.com posted some information of the trading plan of the upcoming Zecco.com at Indextown.com.

Scripta said: I see a Sogo ad on the front page. They're going down even before they got up.

Hey Scripta,

I saw that to. How funny is that. And since the page isn't live yet, the sogo ad jumps out of the screen.

Not everything free, $3.50/trade after 40 trades in a month.

High margin interest, high opening balance of $2,500.

misc fees
$75 for an ACAT.

Yes, I signed up early this morning. The 2500 initial deposit is not that big a deal for the amount of trades I do per year. Still have to mail in the signed form (14 pages to read) and make the deposit. It was an easy setup though (probably 10 minutes total). I plan to try this for a while. Will have Ameritrade account and this for a while to compare. May them move everything to Izone or IB if not happy with Zecco. Love Ameritrade though (6 years in it), just too expensive with more discounts available.

Good luck to you.

honghong322 said: I just held off and I put money into the Sogo account. Since I don't trade a lot the 3 dollar trades won't kill me.


I agree; i'm figuring i'll just sub to Sogo at the Gold level, and use 5 automatic trades a month.

The ability to buy small amounts of fractional shares is worth the small price, IMO.
Especially to invest $200 month evenly into stocks that happen to have a high-share price.. some as high as $3,000/share; no way to do that with Zecco, afaik, yet.

they have been talking about zecco on cnbc on and off all day

There are few things that I think it is wise not to shop for based on price alone, major surgery being one example and stock brokers being the other.

Maybe they will be ok for certain folks (small trade sizes where commissions really add up) but I think in the long run most people would be better off with one of the name brand discount retail brokers (Ameritrade et al) or direct access brokers (interactive broker, MBT).

Ivanist said: The service is not going to last long. The only they will survive is to get huge volume.

The service is already lousy and system full of bugs.
I tried to open an account and it haanged up my computer while trying to save my application.
I had to reboot my computer and I am afraid if it may happen again while I am trying to trade.

Margin rates as well as the interest they pay on cash balances are very unfavorable.

Still, its good to see another free broker.

It puts pressure on the big boys.

for those that funded the account with a credit card, how soon are you able to withdraw your funds/use the $$$ to buy stocks?