True colors: Zecco cancels free trades for small investors
Advertisements:Summary:
- As of March 1st, 2009, to qualify for 10 free stock trades, you must reach a $25,000 minimum balance in your account, or execute 25 trades
- Account balance of $25k or more + 25 or more trades per month = You will get 10 free stock trades per month, $4.50 otherwise
- Account balance of $25k or more + Less than 25 trades per month = You will get 10 free stock trades per month, $4.50 otherwise
- Account balance of less than $25k + 25 or more trades per month = You will get 10 free stock trades per month, $4.50 otherwise
- Account balance of less than $25k + Less than 25 trades per month = $4.50 per trade (No free trade)
Most of investors are falling under forth scenario (having less than $25k in account) as since Zecco’s inception they try to attract students or graduates who wish to start experimenting with investing, small investors show wants to invest something small on monthly basis. This new change is very disappointing. I would say If It’s too good to be true then It’s probably it is- well today, Zecco has shown its TRUE COLORS. As a small investor, there’s no way I can come up with $25,000 for several more years.
New pricing structure really equals the playing field for Zecco and Sharebuilder. $25K account balance includes could be anything including all cash, money market funds, stocks, exchange traded funds (ETFs), mutual funds, and options in your account. However, algorithum to quality for 10 free trades (either by having $25K+ balance or 25 trade qualification) is even more complex and I think new structure made it difficult for small investors to reach/utilize free trades. Based on my first impression, you might have to spend more to get something little for free. You must read below example to understand:
See more FAQs about new Zecco pricing here.
So who to blame for this new structure? Well obviously its economy! Now a days, many CEO is conveniently blame on economy instead of innovative way to cut the cost. And Jeroen Veth (Zecco CEO) is no different. He explained in email: “US and world economies have been hit hard over the past 4 months. As a result, some of the largest corporations in the world have had to cut costs and adjust to new business realities. With reduced retail trading volumes and lower interest rates, we at Zecco Trading simply could no longer provide free trades to as many people as we would like.” Zecco should change its name to “Zero commission with FEE”, sounds weird! Why I am so upset, well they betrayed me.
As a positive note, As of March 1, 2009 the terms of the Zecco Friends Program will be changing. The referral credit will be increased from $65 to $75. If you want to be a Zecco member, please comment this post. I will send you invitation soon.
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Comments
C’mon, $4.50 a trade, how can you beat that? You could always trade on Etrade or Ameritrade for $10 a trade, and noe be able to trade half of the small time stocks out there because they dont fit your brokers platform lol. Make good investments and the $4.50 is a fart in the wind.
[...] was a bit disappointed to see Zecco cancel their free trades for small-balance investors, as I had considered trying out their services. In the end, it may still be a good [...]