Zecco Pulls an About Face
Online discount broker Zecco Holdings has spent a small fortune advertising on the internet in an attempt to garner new accounts. With no minimum balance and unlimited free trades, the broker has been attracting hordes on young, male traders. But the business model needs tweaking:
In an about-face, the Burlingame, Calif., company said that it will set its minimum account balance back to $2,500 after eliminating its account minimum balance in June (InvestmentNews, June 6). The new requirements will go into effect Jan. 1.
“Increasing the minimum account size allows us to make incremental investments in our trading platform,” said Gabriel Dalporto, a Zecco spokesman.
He added that the intent of the May price cut was to give all of Zecco’s customers access to free trades. However, based on data that Zecco received, the cheaper platform didn’t really work, Mr. Dalporto said.
The company will instead allow investors to make their first 10 trades each month at no cost. A fee of $2.50 will be charged for each additional trade. Investment News
Odd-lotters might not take kindly to the commission structure.
Zecco to limit free trades
Investment News
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