zecco.com

[newyorklady]

"Accounts Protected to $35 Million
Zecco Trading is a division of Equinox Securities, a fully disclosed broker/dealer and member of the NASD and SIPC. Customer securities accounts are protected by the Securities Investor Protection Corporation (SIPC), up to $500,000 (including up to $100,000 for cash claims). A detailed explanation is available upon request or at www.sipc.org. Additional securities protection is provided by Lloyd’s of London with an aggregate limit of $200 million providing that the combined return from Trustee distributions, SIPC and London to any customer does not exceed $35 million including a London cash sub-limit of $900,000. This coverage provides protection against brokerage insolvency and does not protect against loss of market value of securities.

Apply today and you’ll get:
- Free stock trades
(maximum 10 trades a day up to 40 a
month. After that, only $3,50 per trade)
- $3.50 option trades / $0.60 per contract
- Live customer service 5 days a week"

This sounds too good to be true. IS IT

 

[eridanus]

It depends. Do you care whether your trades are being sold for order flow payments?

 

[newyorklady]

um, i don't even know what that means, but i don't like the sound of it.

 

[eridanus]

It's not as prevalent now but market makers pay rebates when brokers send them orders. They do this because they [the market makers] can pocket the bid/ask spread. This is how Freetrade made money; it's also pretty similar to how forex firms make money. Market type orders are particularly vulnerable to this.

In other words, it's not truly "free" because you get a worse price for your stock. However, if you're investing for the long term, maybe you don't care about losing $.05/share.

Edit: Brokers are required now to publish where they're sending their order flow. It can be found in SEC 11Ac6-1.

 

[maddythebeagle]

I would go with the BOA or wells fargo offers before I would do this one...at least they are possibly getting you in on other products in exchange for the free trades....more likely to last...

 

[newyorklady]

thanks looked this stuff up.

"Further, the Commission recently expressed its concern that payment for order flow and internalization contribute to an environment in which quote competition is not always rewarded, thereby discouraging the display of aggressively priced quotes.1 In the multiple trading environment, specialists on the competing options exchanges typically will promise to match the displayed prices of other exchanges. If widespread, these passive "price matching" practices may weaken the incentive to display competitive quotes, because displaying a superior quote does not necessarily ensure attracting additional order flow. Over time, therefore, the quotes being matched may become wider, increasing execution costs to investors. By some measures, the improvements in quoted prices experienced after increased multiple-listing in August 1999 have been muted coincident with the increasing prevalence of payment for order flow and internalization."

http://www.sec.gov/news/studies/ordpay.htm

 

[newyorklady]

I would go with the BOA or wells fargo offers before I would do this one...at least they are possibly getting you in on other products in exchange for the free trades....more likely to last...

well i am already using another online trading account that i chose because didn't have to go through husband's work's compliance dept for it. he is in finance so it is a pain in my behind if i want to switch accounts. but saw zecco's prices and was just very curious.

 

[mickj]

I used them a little bit just to try them out. I am pleased. Their website is slightly confusing but not too bad.