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Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: ecommerceman who wrote (13263)	4/23/2000 11:14:00 PM
From: BWAC	Read Replies (1) \| Respond to of 13953

The Freetrade.com is obviously not for everybody. You can't sell options, and you can't sell short, no IRA's, and a few more cant's. I seriously doubt it will take much money and trading away from the current AMTD. (At this point in its life anyway.) Who knows what the future holds. As usual some points are being missed. This Freetrade thing will have little or no significant expenses. I figure they will run the thing on the back of their current system. In effect attempting to utilize their excess, already paid for capacity. Thus little or no incremental cost. The FreeTrade will not be adveritsed. Further as the pace of new accounts seasonally lessens, again I suspect AMTD will use their already in place staff to process applications. After that it's on your own as a customer. In the last conference call AMTD said it cost them $8.54 per trade. They expected that to decrease. This number did not include advertising. Subtract the support staff, run it all electronically, (ALL: no phone, email only, wire money in/out, etc.) The $8.54 could get cut down to $3 or so. Revenue from $5 limit orders. Revenue from order flow payments. Margin Revenue. And Advertising Revenue. You cannot open an account unless you agree to accept ads. This will be the make or break part. If they can convince advertisers to pay enough to have access to an audience with money at their fingertips. Besides EGRP offers trades for $4.95, which isn't above their cost of doing the trade. In the end its all about covering your basic costs and pocketing the margin revenue. What I think should happen. EGRP should put a stop to all idea of freetrades. End the whole concept. Buy AMTD. Then eliminate AMTD's $200 Million advertising budget. Eliminate OnMoney. Consolidate the back offices and reporting. Add $80 Million right to the bottom line as profits per quarter. 25 cents per share possible. Gather 1,000,000 more accounts. Immediately pass SCH with the added trades per day. Why EGRP and AMTD haven't done this I do not know.