Zecco: You're in the money

July 27, 9:07 PMSF Personal Finance ExaminerBarbara Bryn Klare

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"We never see a headline

'Bout breadline, today,

And when we see the landlord,

We can look that guy right in the eye.

We're in the money..."

-We're in the Money, lyrics by Al Dubin, 1933

Great songs of the Great Depression and now the Great Recession remind us: it's much better to be in the money than not. Burlingame-based Zecco (Zecco Holdings, Inc) is an online discount trading site that gets you in the money fast. Back when I was swing trading, I always had my eye on the break-even point for every trade. I was paying more than Zecco charges, and I would breathe easier when I was in the black on a stock trade or "in-the-money" on an options trade. If you've got $25,000 minimum to invest, you're home free at Zecco, with 10 free trades every month. Don't have that kind of cash? Your stock trades will only cost you $4.50 each, which is real value.

I asked CMO Gabe Dalporto why Zecco lowered their original free trade offer from 40 to 10 (with a $25,000 min account). "The word 'free' completely changes trading behavior. When we gave away a large number of free trades, people traded a lot more often. For us to continue offering free trades and remain low-cost, we had to update our model."  Okay, it IS a lot to ask for. This isn't a breadline and trades aren't free. Is Zecco responding to consumers' needs? It seems so. No streaming quotes? They're working on a basic version of their QuoteStream II. Lack of research? They acknowledge that other sites are "best of breed" in this area, but are working hard to compete by adding S&P reports, S&P options reports and screeners. They do excel in the area of competitive pricing, and that is no small thing.

But to say that Zecco is only a low cost leader is only part of the story. In addition to low transaction costs, Zecco promotes and maintains a lively community of traders (ZeccoShare) that provides an "open window" on others' portfolios, and a support system when trades go bad. For example, if you want to buy GE, you can search for all traders who currently hold GE in their portfolios and strike up a conversation. It seems like every firm I talk to wants to jump on the "social community bandwagon," so I tend to be a little jaded. But I was impressed with the openness of the other traders, the healthy camaraderie and the opportunities for research. As Michiel de Boer, Developer of Product, UX, Social Media, and New Business at Zecco said, "The community adds the human touch and real data because it requires you to 'open your kimono,' as it were."

This April, Zecco officially took on the crowded Forex market. "At Zecco, we enjoy taking on the big guys," Gabe pointed out. He added, "We wanted to bring in this asset class with such crucial differences from the equity markets." Their pricing is competitive in that arena, too (just add .50 for each contract to the $4.50 trade cost). The 1-2 pip spread for major currency pairs is excellent and very competitive, but if you only want to put a pinkie in the forex water, they offer a mini but no micro account. To bring in Forex traders, they are offering a fairly typical opening bonus that gives out $50 for the first $1,000 and up to $200 for over $10,000 in your account by 7/31/2009.

Last but not least, Zecco has invested time and energy in trading education - of which one result is the Trading Game (also known as the Zimulator). With the Zimulator you can virtually trade stocks, options, and futures, presumably getting smarter about investing along the way. It's free and there is a version on Facebook that is easy to use. Zecco also maintains two blogs, the Inside Scoop and ZeccoPulse as well as an active Twitter profile. The Inside Scoop is a regular chat with Jeroen Veth, CEO of Zecco and ZeccoPulse is the community's official blog.

Their ongoing promo is Refer-a Friend (make $75 if a friend opens an account with at least $500). Look for a much bigger promo for Forex customers in the near future, and in the next couple of weeks, look for a new free trade promotional. Why not try Zecco out? You'll only be in the money faster.

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Barbara Bryn Klare is a finance writer and communications consultant at CafeFAQ Communications, an online information management firm. Check out her blog, The UpSide of Money, for an UpBeat approach to your finances.

 © 2009 Barbara Bryn Klare. All Rights Reserved.