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January 17, 2007
tech:stocker says Discount Online Trading Services Hosed
TD Ameritrade has a great quarterly report this week with a 69% rise in fiscal first-quarter profit and shares in rival E*Trade rose along with it. This sector, which has languished over the last five years as small investors lost their taste for day-trading. But now it seems investors are starting to reassess the prospects of these companies.
Sounds great, except for the Zeeco factor that Wall Street is missing because Zeeco is not a public company, yet. Zeeco stands for zero commission online. In other words, TD Ameritrade and E*Trade must content with a free online trading service. Its curtains for these guys. The company has financial backing from a Skype founder, who plans to do to online trading what he did to telecom service fees.
Zeeco plans to generate revenue through interest on margin loans, floats, premium services, and Google Adsense advertising on the Zecco site. While basic stock buying and selling will be free on the site, there is a charge for premium services such as placing option calls. This is in sharp contrast to stock trading commissions on TD Ameritrade and elsewhere that run anywhere from $5 to $15 per trade.
Read - TD Ameritrade Scores Big
Posted by Paul at January 17, 2007 06:45 PM
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