Zecco Eliminates Free Trades and Raises Stock Trade Commissions
When something seems too good to be true, it probably either is or won’t last long in case it is true.
And what happened to Zecco Trading in the past few years just serves as a perfect example. Zecco, an online discount broker whose name stands for ZEro Commission COst, started in 2006 by offering its customer commission free stock trades. At that time, I had wondered how long the no-commission fee structure can last. It turned out it didn’t. Two years later on March 1, 2009, Zecco had its first major change of its fee schedule by adding account balance and trade limits when rewarding free trades, which was reduced to 10 commission free trades per month. For customers who don’t meet the requirement, the commission for online stock order is $4.50/trade. The change caught many by surprise, including me, but it wasn’t unexpected despite that Zecco claimed at that time
Apparently, Zecco isn’t done.
Starting tomorrow, March 1st, two years after the first change, Zecco will once again restructure its commission. This time, eliminate the free trades all together and raise commission for stock trades.
The following is a letter I received from Zecco last Friday.
Thank you for being a Zecco Trading customer. I hope you’ve been enjoying the exciting improvements we’ve rolled out in the last few months.
When Zecco Trading first launched in 2006, our focus was to deliver a good, solid service at a bare bones price. In the four and a half years since that launch however, our customers’ needs have evolved quite a bit. While investors today certainly value low commissions, they also demand a great trading service with a rich set of advanced features.
So, we have been working hard to continuously improve the Zecco Trading experience. In just the last year or so we’ve introduced major improvements in our quotes and research offering as well as launched important new tools like Zecco Streamer, Zap Trade and the new Zecco Mobile iPhone app. We’ve also made substantial improvements in customer service and upgraded our core infrastructure to dramatically improve performance and reliability.
To better support this balance between offering remarkable value and continuing to deliver the innovative new technologies, tools and services that Zecco Trading customers require, we are modifying our commission structure. Starting on March 30, 2011, our new commission rates will be:
With this change we are no longer offering 10 free trades per month. As before, there are no minimum balance requirements or inactivity fees to open or maintain a Zecco Trading account.
- Equity trades: $4.95 per trade
- Options trades: $4.95 per trade, plus $0.65 per contract
With this change we are no longer offering 10 free trades per month. As before, there are no minimum balance requirements or inactivity fees to open or maintain a Zecco Trading account.
At $4.95/trade, Zecco puts itself at the same level with TradeKing, another popular discount broker, in terms of commissions, but I doubt many will see them as equal because they are just not. And at $4.95, I don’t think Zecco has any advantage over other brokers.
Two years ago, I wrote about Zecco Trading alternatives. Now with so many commission free ETF trades, you don’t really need Zecco in you want to buy ETFs without paying a commission.
Are you using Zecco? If you are, with this latest change, may not be the last though, are you plan to keep your account with them? If you are considering moving, TradeKing may be a better choice since the commission is the same at $4.95, but the customer service and website, as well as research tools, are well superior. Plus, TradeKing will reimburse up to $150 account transfer fee if you move your brokerage account to TradeKing. Check out my TradeKing review for details about the broker.
I am glad that I only have a small play account with Zecco.
Related posts:
- Zecco Trading: Zero Commission Free Stock Trades
- Zecco Bonus Code for 20 Free Trades
- Zecco To Adopt New Pricing Policy: $25K Minimum Required for Free Trades
- Zecco Gives Unlimited Free Trades in October
- Free Trade And Dividend Reinvestment From Zecco
Original Post on The Sun’s Financial Diary
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Zecco Eliminates Free Trades and Raises Stock Trade Commissions
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Whistler Blowers, Insiders
You forgot to mention that they will now charge a $6.95 fee for stocks that are less than a dollar. That is a 55% price increase in their brokerage fee. Oh did you also notice how they hide the details about the $6.95 fee in their fine print! Plus they hope to get their new trading platform out by July if they can get all the bugs worked out. It was to be rolled out in January and now we are looking at July or later, but they thought they should increase their fees nows. Well they lost my support and I am looking around for a cheaper broker. Zecco you blew it!