Stock Trading Goes Free

10 comments

Morten Lund is backing Zecco, a stock trading platform that will offer free stock trades. The site will be financed by advertising.

GigaOm notes:

Zecco, in company’s own words is at “the intersection where online brokerage meets Yahoo Finance and Myspace,” and offers tools such as free blogging, forums etc.

Will investors trust a free platform enough to bet their money on it? If a free platform puts a damper on the paid online stock brokers who buys ads on it?

Given Google's insider data on ad costs, brand strength, and search trends (via things like brand related search volume, ad price trends, linking trends, linguistic trends, advanced knowledge of relevancy algorithm changes and "quality based" pricing and how those may help or hurt a business, and early indication of the rise of new competition), how hard would it be for Google to launch something similar but better? And if they did create it, would they only use it internally, or would it be an ad supported product rolled into Google Finance?

Comments

plenty of options

There are plenty of advertisers outside of paid brokers who could advertise on the service, there's no shortage of software prediction programs, subscriber newsletters, books etc that are finance related that could fit in, let alone other financial services as well: margin lending, standard lending, even everyday banking and insurance.

Actually, You don't need to

Actually, You don't need to charge a commission. You can make your money as a market maker off the difference between the ask and the bid. It is generally around an eighth or a teeny.

They stated that trades on

They stated that trades on average cost about $2. The spread between ask and bid is usually like a nickel or less. ;)

With currency trading you can win on the spreads as a market maker, but stocks are of such low value (typically, at least outside of BRK.A) that the spread is less than $2. I guess if people trade 100 shares and the spread is 3 cents it works out, but I bet their are frontrunning laws about acting as an intermidiary and gaming the spread

Thanks for noticing Zecco

Thanks for noticing Zecco :)
This has been, and still is, one of the most exciting projects I have ever worked on and its nice to see the responses we get after the news was released yesterday. The guys behind this are great and its just so much fun to be part of a project that is sure to kick some butt in a huge industry. OK, I'm a punk but I do like it :)

This has been, and still is,

This has been, and still is, one of the most exciting projects I have ever worked on

Wow, that makes three TW'ers who've worked on this!

well I didnt work on that

well I didnt work on that project...who is #3?

> Wow, that makes three

> Wow, that makes three TW'ers who've worked on this!

No, more, you just don't know :)

Great idea guys.

I bet the venture ends up being very successful.

shoulda, woulda, coulda

Too late to mention I'm a licensed broker?

I haven't read all the

I haven't read all the comments, but I disabled Javascript (developer tools) to get past that first X days left, and I browsed trough all the website's pages. Looks pretty neat.

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