$0 Commission Trading at Zecco

I’ve been reading about Zecco for a few months now. They have created a free trading zone. This “free trading” zone means Zecco traders will pay no - zero - $0.00 - commissions to buy and sell stocks. Commission free trading for everyone is now available, in Web 2.0 style.

How Can Zecco Offer Free Trading?!

The answer is pretty simple. Zecco makes money through 2 major revenue streams: online advertisements and interest from margin accounts.

Zecco has built up a community area on their site with forums covering all topics of trading, investing, finance, and business, and an area for bloggers and blog readers including commentary on trading, investing, and analysis.

Zecco also realizes interest from margin loans to stock traders is much more valuable income than trading commissions fees. While commissions fees are great income, they are substituting commissions fee income with advertising income. And they’re still holding on the very valuable interest fees attached to trading stocks on margin.

You didn’t think you’d get 0% margin rates, did you?

I’m Opening A Zecco Trading Account

Yes, I am in the process of setting up a Zecco.com $0 commission trading account. I have to fill out forms and fax, as well as mail, the documents to Zecco. In two weeks I should be making my first trade there.

With Zecco, I am going to grow my dividend and value holdings. With free trading, I can reinvest my dividend payments easily, no matter how little cash I am reinvesting. Free online stock trading is very interesting to me and I am still formulating new strategies to take advantage of no commissions fees.

Related Links:

• Zecco.com - Zecco Trading offers online stock traders and investors free trading - $0 commissions.

The Billionaire’s Club

Forbes has announced the “Forbes 400 Richest Americans” which they call “The Billionaires’ Club”. Everyone listed in this years Forbes 400 is a billionaire. That’s $1,000,000,000.

Here’s a snippet from the Forbes article at Yahoo:

This year, for the first time, everyone on The Forbes 400 has at least $1 billion. The collective net worth of the nation’s wealthiest climbed $120 billion, to $1.25 trillion.

Once again the biggest gainer is casino mogul Sheldon Adelson, with a net worth up $9 billion. Adelson’s Las Vegas Sands stock is up 125 percent since its public offering in December 2004. He has made almost $1 million an hour since the 2004 Forbes 400 was published.

Another big gainer is Warren Buffett, who added $6 billion. That wealth, and the rest of what he has accumulated as a value investor, will be given away, mostly to the Bill & Melinda Gates Foundation.

(from yahoo)

A Billion Served?

A trader I know posted this on a forum: “That’s just wrong, $1 million an hour. Half the world is starving, living on less than $3 a day, and some unknown fool is making a million US dollars an hour.”

The trader quickly added: “Adelson, if you’re reading this, give me an hour!”

I do not think we should simply take away some of this money these billionaires’ have worked hard to earn. But I do think there should be an additional tax on the super rich, such as these Forbes 400 billionaires. Any percentage tax on billions of dollars would mean tens of millions available to feed the hungry half of the world. I would be happy with this “special tax”, but I am biased since I do not have a billion dollars.

Related Links

• Forbes 400 Richest Americans: The Billionaires’ Club at Yahoo!
• Sheldon Adelson profile at Forbes. Mr. Adelson makes nearly $1 million dollars per hour from his casinos.

Stock prices dipped sharply after news of an attempted military coup in Thailand was reported.

Stocks, oil and US dollar currency are down, while bonds and gold are up.

From the AP news wire:

Traders watching Thailand closely are certain to remember how trouble in the kingdom has had worldwide implications in the past: The Asia currency crisis that erupted in 1997 began with the devaluation of the Thai baht, then snowballed into an international economic downturn. The baht fell sharply Tuesday.

Thailand Prime Minister Thaksin Shinawatra, who was in New York attending the United Nations General Assembly, faced calls to step down amid allegations of corruption and abuse of power.

The news hit the market on a day stocks had been drifting lower following a sharp drop in the pace of U.S. housing starts in August. Housing starts fell 6 percent, twice as fast as expected. New housing construction notched its fifth decline in six months, hitting its lowest point in more than three years.

(Reported from AP Business news wire)

This uncertainty with Thailand as well as the poor US economic indicators and data is hitting the stock markets hard. If these various issues remain uncertain, we will see shaky action in the markets with the possibility of a minor correction wiping out many summer gains. I would like to see the Thailand issue resolved swiftly and peacefully, which would bolster the Asian and US stock markets.

Here’s a look at the Nasdaq index right now:

Links:

• Stocks Off After Coup Occurs in Thailand
• Thai Baht Falls Most Since 2002 as Premier Declares Emergency

Fat Finger Syndrome Costs Tokyo Trader $18 million.

A stock trader in Tokyo has the “curse of the fat finger” - mistakenly selling over $18 million of web advertiser Adways through a typing error. The trader’s simple typo cost his firm, Tachibana Securities, $18 million.

Fat finger syndrome is accidentally pressing the wrong button when entering details on a computer keyboard.

“It is known as fat finger syndrome . the occasional tendency of stressed traders working in fast-moving electronic financial markets to press the wrong button on their keyboard and, in the process, lose their employer a mint ..” (The Guardian, 9th December 2005)

The trader had apparently intended to sell shares in another firm with a trading code similar to that of Adways but with a much lower share price.

The trader cancelled the order but only after 1,482 trades, just under 10% of Adways’ total, had been completed.

“It was an input error,” said Tachibana’s vice-president, Takahiro Tsuchiya. “The trader noticed the mistake immediately and cancelled, but it was too late to stop some of the shares from trading.” (The Guardian, 20th June 2006)

I personally have never had a problem with fat finger syndrome or the curse of the fat finger. I hope I never do. Most online brokers, such as TD Ameritrade, will not execute an order if you do not have the funds available in your account, which limits the possibility of fat finger syndrome from occurring in daytraders like most of us who trade online. However, working a large firm, these simple safeguards are not always in place - as we have seen today in Tokyo and many times in the past. This latest case of the curse of the fat finger should teach us all to verify and double check our order entry details. I know I do. No one wants be the next trader the curse of the fat finger strikes!

Related links:

• The Guardian - Fat finger’s £10m slip on Tokyo exchange
• Macmillan English Dictionary Word Of The Week Archive – fat finger syndrome

Asia indicies are rallying and showing strong gains Friday following stellar gains in U.S. indices. on Thursday. All major Asian indices are posting gains, with all index prices gaining over +2% except one (Index: ^KLSE - Kuala Lumpur), and some indices gaining over +3%. The Asia market rally follows the NYSE and NASDAQ rally on Thursday’s trading in the US.

Here’s a quick summary of the Asia indicies and their gains today:

• ^SSEA - Shanghai A-Share Index - 1,654.76 +2.64%
• ^HSI - Hang Seng Index Index - 15,837.19 +2.61%
• ^N225 - Japan NIKKEI 225 - 14,879.34 +2.82%
• ^STI - SES Straits Times Index - 2,373.91 +3.10%
• ^TWII - Taiwan TSEC Weighted Index - 6,575.77 +2.32%
• ^KS11 - KSE KOSPI Composite Index - 1,262.19 +3.51%
• ^KLSE - Kuala Lumpur - 893.50 +0.79%
• ^BSESN - Bombay BSE Sensitive - 9,896.93 +3.69%

Related Links:

• Yahoo! Summary of ^SSEA, ^HSI, ^N225, ^STI, ^TWII, ^KS11, ^KLSE, ^BSESN with prices, gains, charts and headlines