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Strategies & Market Trends : The Final Frontier - Online Remote Trading
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To: TFF who wrote (7688)9/21/1999 10:40:00 AM
From: Eric P  Read Replies (1) of 12617
 
Interesting offering. A recent post on the AB Watley thread posted the e-mail that Watley sent to their existing customers regarding this change. One portion of this e-mail was as follows:

There is no money market sweep feature for this new service level. For example, at the end of each day and as an average throughout the month there must be a $20,000 free cash balance in your account. UltimateTrader FREE accounts are not eligible for a money market sweep unless the cash balance exceeds $100,000.00. Funds over $100,000 will be swept into the Alliance Capital Reserve Fund. UltimateTrader FREE accounts will receive a fixed interest payment on free cash balances of 1.5 percent.

If I understand correctly, it sounds like this UltimateTrader Free account is targeted to the low volume customer who wants the software 'free'. The tradeoff is the lower interest rates paid on cash balances in the account. For a customer with the minimum $20k cash balance and very few trades, the ~2.5% interest rate reduction (1.5% versus ~4.0%) will 'cost' the trader approximately $40/mo. For a trader with higher account balances of $100k, the lower interest rate will 'cost' about $210/month in reduced interest. Not exactly 'free', but still perhaps attractive for some people with relatively small accounts (i.e. less interest lost) and few trades (software not already 'free').

-Eric
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