Zecco To Adopt New Pricing Policy: $25K Minimum Required for Free Trades
Zecco Trading now requires a minimum of $25,000 in the brokerage account in order to earn 10 commission free trades every month.
This is just another example to show that there’s no such thing as free lunch, if you consider free stock trades from Zecco as *free lunch*. Since the launch in July 2006, Zecco, which stands for “Zero Commission Cost,” has been slowly drifting away from their initial belief that “there are independent investors out there who are comfortable making their own decisions and who would rather see their money go toward their investment return instead of paying higher commissions” (see my interview with Zecco). Today, they finally buried their free trade concept when they announced new pricing policy effective March 1, 2009:
The new fee structure essentially killed the free trades for small investors, who have been attracted to Zecco because of its relatively low minimum requirement to earn the free trades so they can keep the costs to invest down. Not any more. You now have to be an investor who either have a big account ($25K minimum) or trade like crazy (25 trades per month) to avoid the commission, even though the new $4.50 per trade commission is still relatively low comparing to other online discount brokers. Zecco’s explanation of the policy change is like this:
Why was this necessary now? Anyone who’s read a newspaper lately knows that the 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.
“Reduced retail trading volumes”? Didn’t they give unlimited free trades in October 2008 to everybody because “system activity increase by over 450%” in September?
Looking back the history of Zecco, the broker has changed its policy quite dramatically in the past two and a half years, more like bait and switch. First, they offered 40 monthly free trades with $2,500 minimum, then reduced the minimum to $1,000, later removed the account minimum all together. But that didn’t last long as they reinstalled the $2,500 minimum requirement and cut free trades per month to 10.
Today, it became just a discount broker.
I wasn’t very confident about their free structure from the very beginning and have doubts how long the free trades can last, therefore, I only keep a very small account, my play money, with them. With the new pricing policy, I don’t see the reason for small investors to hang on with them. The main and only attractive point of Zecco is now gone.
Maybe it’s time for Zecco to change its name as well.
Will you keep using Zeccoo? If not, what’s your option? If you have at least $25K, then I am sure you can find better alternatives which can give you better trading experience.
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