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Free Online Trading: Too Good to be True?

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2000/08/30

Abstract

Cambridge, MA, USA, August 30, 2000

Free Online Trading: Too Good to be True? Report Published by Celent

Competing mainly on the basis of execution price is no longer a viable option for most online brokerage firms. While retail investors still do look for affordable execution prices, most are willing to pay a little extra for a brand name and extensive content and research. The latest salvo in the commission war is the emergence of completely free online trading. A handful of firms have begun to offer low -- in fact, nonexistent -- execution pricing to attract independent, Internet savvy retail investors. In a report, titled "Free Trading -- Too Good to be True?" Celent Communications examines the recent online brokerage phenomenon of commission-free trades. The report provides detailed analysis of the four online brokerage firms currently providing commission-free trades and identifies the possible impact this may have on the overall industry.

Members of Celent Communication's Retail Securities & Investments research service can download this 20-page report electronically by clicking on the icon to the right.

"Commission-free trading represents good opportunities for those retail investors looking for the cheapest possible execution price," noted Sang Lee, an analyst at Celent's Trading group. "However, those brokerage firms building their entire business model on the concept of free trading without offering a robust suite of research/content and reliable customer service will quickly find that there is no such thing as a free lunch."

A Table of Contents is available online.