Privateer - if FreeTradez doesn't pull through this week - I will definitely have my doubts. By the way, even though I don't speak German - my roots are German.
wirelessbull interesting - where are your roots from in Germany ? Hope you haven't missed out some good trading opportunities lately due the delay with FreeTradez. ------------------ Good Trading Privateer
I received an email from freetraedez yesterday. They apologized for the delays but gave no guidance as to when they would be open for trading. At least they didn't make a promise this time. I still plan on trying them out. I hope that no one is basing a decision on the notion that they will be offering trading soon. I learned my lesson with Tradescape. They took about 5 months to launch their remote trading platform after several times promising that it would be offered 'soon.' Then they took another 8 months to register in most US states. So far freetradez is at 4 months. [This message has been edited by mjt (edited Oct 13, 2000).]
Hi, first time on this board, I just started trading, and have tried the other boards and they seem either childish, or to infrequently used. I notice on the broker boards this one was hot, nice comments, I tried IB and they seem to have a really fresh approach, the one cent per share isnt the best, but everything else seems to be alright. I also logged onto Freetradez, per the comments on this board, I noticed they are in my part of the country (midwest), I read through their site and while its not as flashy as IB, it seems straight forward. I was very impressed by the education portion of the site, it is as extensive as I have seen anywhere. I'm going to try them both, thanks for the insight.
Hello all, I wanted to pass along some information I found out about Freetradez. It seems that their ad revenue structure isnt as crazy as some may think. I spoke to a Company rep. this week that said they will display 2 ads everytime someone pulls up a quote. Level II fees run $10.00 per/mo per person. Clearing a trade costs only $1.00 per trade Now since every quote displays 2 ads @ .05 cents ea. this means a customer must average 5 quotes a day to break even on quotes... ( .50cents a day x 20 days a month),every quote after that is .10 cents in their pocket, and Look how many services out their are adding real time quotes to their sites because everyone wants them. As an active trader I look at dozens of quotes a day without making a trade. With no other form of revenue the formula for them to break even on a person making 10 trades a day is as follows 10 trades @ $1.00 ea = $10 free level 2 quotes = $10 total gross = $20 That means that a person has only to pull up 10 quotes a day for them to break even, every thing else is profit and that doesnt even include execution sponsorship, web site banners, statement ads, etc... I get the feeling the rest of the industry is upset because they didnt think of it first. Happy trading !!
I think you neglected to factor in cost of infrastructure and all the other operating and overhead costs. Breakeven is a lot higher than $10/mo/person (that's the Nasdaq exchange fee) and $1/trade clearing.
This is true angel, but if there are any early investors or a VC involved then chances are the infrastructre has been covered, there is also the asp angle to wonder about. Either way you look at it 10 trades a day was a lowball figure, how many quotes do you pull up a day ? how about a daytrader?, 100?, 200?, plus the fact they are going to be open 24/7 with connections overseas means quotes being checked around the clock. The main fact is that their ad revenue is not what the media indicated it would be. I've sent my application in with a nominal amount to start, but if their executions are as fast a they promise and the prices are what they say, how will the rest of the industry compete?
up2par thats just it other brokerages will have a very hard time competing if freetradez's executions are as fast as they say which will force them to get off their butts and start improving things for us(the individual investors). Datek is allready beta testing level 2 quotes and its very interesting that they have started this testing at a time when freetradez is very close to debuting. hmmm /mb_html/smile.gif
up2par - couple of things: 1. The initial capital cost of the infrastructure might now be a sunk cost paid out of initial capital (although any VC is going to want to see it back). 2. The initial cost of buying the hardware infrastructure is the smallest part of operating the infrastructure. The ongoing cost of operating, maintaining, upgrading, etc. is where the big cost element is. Even if you outsource it to an ASP, you've still got to pay them and that isn't cheap. 3. Not sure what you mean by "how many quotes do I pull up a day". When daytrading, I'm not "pulling up quotes" - I'm using realtime streaming quotes, not snapshot quotes. Unless they're providing realtime streaming quotes and L2 for free (in non-snapshot form), daytraders will still need a separate realtime quote service and they won't be "pulling up" any quotes from freetradz. If they do provide it, then I'm unclear how realtime streaming quotes works with the "pull up the quote and get ads displayed" kind of structure you mentioned. Now if they offered a realtime quote display with L2 and at the top or bottom of the display they cycled ads, that might make sense. But then it's not "per quote" based it's more how many ads can they realistically cycle per minute (probably no more than 2-3/minute, more than that and the advertisers won't get enough screen time). How do you tell what their ad revenue is going to be? $50 CPM (5 cents/impression) sounds too high. That's about what DoubleClick's Select targeted ad rates are. Doesn't seem reasonable that Freetradz would get the same CPM. $5-20 CPM seems more reasonable, especially if they try to fast cycle the ads. Maybe Baron wouldn't mind throwing in his two cents about the practicalities and general thoughts on ad revenue. Anyway, if this is more than a "we'll lose money on every trade but we'll make it up in volume - or at least until we can sell/IPO out" deal, they'll need a LOT of ad revenue. The ongoing operating costs aren't trivial, i.e., infrastructure, compliance, auditing, operations, management, customer service, insurance, etc. But if they can do it, deliver fast quality executions, AND make a buck at it - they'll have really done something and they should be applauded.
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