E*Trade Ups Ante In Bid For Active Traders
Financial NetNews
04/19/02
April Kabahar
E*Trade Financial will introduce a flat-rate commission schedule for Power E*Trade, its active trading platform. Starting July 1, Platinum Power E*Trade clients will no longer have to make 75 trades or more every quarter to qualify for a discounted commission rate, said Connie Dotson, chief communications and knowledge officer. Instead, clients will pay a $9.95 flat fee the moment they begin trading, explained Dotson.
To cap the offer, E*Trade will also introduce an execution guarantee, which means that if a trade is not processed within a certain amount of time, clients won't have to pay the commission fee. The offer coincides with the upcoming launch of E*Trade's rewards program in which clients receive incentives for every fee-generating transactions they make at the firm (FNN, 2/10).
E*Trade's aggressive pricing scheme will bring it closer to the fee schemes of both Ameritrade and the recently acquired Datek, which charge $8 and $9.99 for trades, respectively.
At the same time, E*Trade is making a pitch to win over Datek and Ameritrade active traders. E*Trade is doling out a $100 welcome bonus to Datek and Ameritrade clients who transfer their accounts to Power E*Trade. It is also offering 30 commission-free stock trades during the first 90 days the accounts are opened and funded.
The promo is expected to run for the next 30 to 60 days, said Dotson. "We've made no secret that we are going after the active traders," she said, adding that Power E*Trade's platform contains more than just the usual active trading menu of direct access, speed, streaming quotes and real-time information; it is also tightly integrated with other types of accounts its clients hold within the firm.
The firm is touting the offer on its Web site (www.etrade.com) through a "special message" directly addressed to Datek and Ameritrade customers. The message reads, "Mergers are beyond your control. Luckily, there's Power E*Trade." A call placed to Anne Nelson, chief marketing officer at Ameritrade, was referred to spokesman Matt Ord, who declined to comment. Mike Dunn, a Datek spokesman, said the firm still believes that its customers' experience with its trading platform has not changed. He declined to comment on possible pricing changes.
The battle for market share in the active trading segment continues to heat up. Ameritrade acquired Datek for $1.3 billion in an all-stock deal last week. Soon after, E*Trade followed with its own series of acquisitions. The firm acquired Tradescape for $100 million in common stock and shelled out $5 million more to take control of A.B. Watley's online trading technology platform. New York-based A.B. Watley helped the firm develop Power E*Trade. |
