Comments on: Zecco Minimum Opening Balance Drops To $0 http://www.bargaineering.com/articles/zecco-minimum-opening-balance-drops-to-0.html personal finance blog with anecdotes, advice and commentary. Sun, 22 Nov 2009 02:01:03 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: The Truth Will Out http://www.bargaineering.com/articles/zecco-minimum-opening-balance-drops-to-0.html/comment-page-1#comment-285581 The Truth Will Out Wed, 24 Sep 2008 01:23:35 +0000 http://www.bargaineering.com/articles/zecco-minimum-opening-balance-drops-to-0.html#comment-285581 TJP, I don't know where you get your information. But Zecco does not receive much of the interest it charges on margin accounts. Instead, Zecco's clearing firm, Penson, is actually extending the margin loan and keep almost all of the interest charged to Zecco's clients. Zecco collects a approximately 50 basis points. That's it. And it costs Zecco approximately $2.00 to execute every trade. Penson also collects that $2.00 as their charge to execute the trade on behalf of Zecco. As such, Zecco in my view is NOT a sustainable business. They are literally losing money on every trade. They are a short term play to acquire accounts and then flip those accounts to a larger broker. Their clients will be hurt in the long run. Penson is a public company. Check their 10k, 10qs and prospectuses for more information on how they manager their relationship with correspondent brokers like Zecco. TJP, I don’t know where you get your information. But Zecco does not receive much of the interest it charges on margin accounts. Instead, Zecco’s clearing firm, Penson, is actually extending the margin loan and keep almost all of the interest charged to Zecco’s clients. Zecco collects a approximately 50 basis points. That’s it. And it costs Zecco approximately $2.00 to execute every trade. Penson also collects that $2.00 as their charge to execute the trade on behalf of Zecco. As such, Zecco in my view is NOT a sustainable business. They are literally losing money on every trade. They are a short term play to acquire accounts and then flip those accounts to a larger broker. Their clients will be hurt in the long run. Penson is a public company. Check their 10k, 10qs and prospectuses for more information on how they manager their relationship with correspondent brokers like Zecco.

]]> By: TJP http://www.bargaineering.com/articles/zecco-minimum-opening-balance-drops-to-0.html/comment-page-1#comment-127300 TJP Tue, 03 Jul 2007 13:16:13 +0000 http://www.bargaineering.com/articles/zecco-minimum-opening-balance-drops-to-0.html#comment-127300 I'm not surprised. Zecco generates most of its revenue from margin accounts; And the margin trading market is a multi-billion dollar one. It's similar to America's addiction to credit cards, so in the long run, Zecco will prevail. But I still wonder how much it costs the average broker to execute a normal online trade. Considering the advancements in technology, it probably costs pennies per trade. However, margin accounts earn 10%+. Who do you think will win in the long run? I’m not surprised. Zecco generates most of its revenue from margin accounts; And the margin trading market is a multi-billion dollar one. It’s similar to America’s addiction to credit cards, so in the long run, Zecco will prevail.

But I still wonder how much it costs the average broker to execute a normal online trade. Considering the advancements in technology, it probably costs pennies per trade. However, margin accounts earn 10%+. Who do you think will win in the long run?

]]> By: keith http://www.bargaineering.com/articles/zecco-minimum-opening-balance-drops-to-0.html/comment-page-1#comment-100595 keith Tue, 05 Jun 2007 18:29:31 +0000 http://www.bargaineering.com/articles/zecco-minimum-opening-balance-drops-to-0.html#comment-100595 Nice $0 minimum balance. I'm just wondering if there are any stocks / funds I can buy for $0. Nice $0 minimum balance.

I’m just wondering if there are any stocks / funds I can buy for $0.

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