New Rate is $9.99 plus $1.25 per contract
March 5, 2002 -- Datek Online Financial Services LLC, a pioneer in the online brokerage industry, has reduced its commission for online option trading to $9.99 plus $1.25 per contract (for each online order up to 200 contracts).
"Our advanced technology has enabled us to deliver aggressive pricing for option trading," said John Mullin, President of Datek Online Financial Services LLC. "On top of that, we rebated more than $3 million last year to customers who traded options. For the typical option trader, the average annual rebate last year was more than $400. Now, we plan to give our customers the savings up front, and they no longer will have to wait for the rebates."
While order flow payments related to option trading remain substantial, the payments related to equity transactions have declined significantly since the New York Stock Exchange, the American Stock Exchangae and Nasdaq have moved to trading in decimals. At Datek, payment for order flow related to NYSE-listed transactions declined 95% during the year 2001. As a result of this dramatic decline, the processing costs of the rebates now exceed the amount of money being rebated to Datek customers. Therefore, Datek no longer will rebate these relatively insignificant payments.
Mr. Mullin said, "Datek helped change the world by lowering trading costs for individual investors. We were the first to offer trading in decimals and the first to rebate payment for order flow. These initiatives, along with our advanced order-routing system, have gone a long way toward reducing spreads and removing intermediaries between buyers and sellers."
About Datek Online Financial Services LLC
Located on the World Wide Web at www.datek.com, Datek Online Financial Services LLC is a pioneer in the online brokerage industry. Datek was the first major firm in its industry to introduce a Web-based, direct-access (all orders are routed through Datek Online Financial Services LLC) trading product, trading in decimals and a continuous 12-hour trading day for Nasdaq stocks. datek also was the first major online broker to provide a 60-second commitment and free, real-time streaming quotes.
About Datek Online Holdings Corp.
Established in 1998, privately held Datek Online Holdings Corp. is one of the most innovative financial services companies in the United States. The Company's primary businesses are Datek Online Financial Services LLC, a pioneer in the online brokerage industry; iClearing LLC, a securities clearing operation; and iCapital Markets LLC, a provider of execution services.