Online Brokerages Hit a New Low
Money (08/00) Vol. 29, No. 8 p.113; Bennett, Andrea

Over the last few years, prices on the commissions for trading online have been steadily decreasing. Now, a handful of brokerages have introduced the lowest cost yet to the avid online trader--$0. However, the hassles involved in transferring funds, the lack of convenience and customer service, and the overall performance of certain stocks over a long period, may not be worth this enticing $0 sales tactic. Online traders should also take into account that commissions for these brokerages generate a healthy portion of the company's revenue. Last year, 51 percent of E-Trade's net income came strictly from commissions. Other companies making the move toward free trades include American Express, Freetrade.com, Thefinancialcafe.com, and FreetradEZ.


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