Merrill will offer online trading for $29.95 a trade through Merrill LynchDirect, compared with the $100 or more the firm's 14,000-plus US brokerscharge per trade. The move, which Merrill announced over the summer, wasspurred by the success that the No. 1 US discount and Web broker, CharlesSchwab Corp., has had in getting new customers and assets.

Schwab and others were quick to realise the potential of online trading andcurrently dominate the business. But among full-service firms, Merrill isone of the first to offer customers no-frills Web trading, after it alreadylaunched free Internet trades for clients who pay an annual fee.

"Backed by the full global resources of Merrill Lynch, Merrill Lynch Directcombines content, intelligence and innovation to create the smartest placefor the self-directed client to invest online," said Merrill's chiefexecutive, David Komansky, in a statement.

Merrill Lynch Direct customers can view their entireport folio, get onlinemonthly statements and annual tax statements, and monitor realised andunrealized gains and losses during trading hours. They can also buy 2,400mutual funds, bonds and, in some cases, new stock offerings, Merrill said.Merrill requires customers to deposit an initial $20,000 into their MerrillLynch Direct accounts, setting the bar higher than Web brokers such asAmeritrade Holding Corp., which requires just $500 to open an account. Andat $29.95 a trade, Merrill's commission is at the top end of Web brokeragecommissions but equal to what Schwab charges.

"Merrill is doing this so that (clients) don't take a percentage of theirassets and go somewhere else - and like it," said brokerage analyst DanBurke of market reseharch firm Gomez Advisors on Tuesday. "It's going to bea good thing long term, because they are offering customers choice."

Merrill, like other full-service firms, was slow to embrace on-line tradingbecause it thought that would cannibalize its existing brokerage business.But Wall Street firms this year made an about-face because they realisedclients wanted to trade at least some of their stocks online. Most now offerfree Web trading for clients who pay annual fees.

For example, some 255,000 of the Merrill's close to 5 million customersalready trade online through an account called Unlimited Advantage. Thesecustomers pay a minimum annual fee of $1,500 to get investment advice,research and free trades.

By contrast, Merrill Lynch Direct is a copy-cat of what Web brokers offer:cheap and fast trade processing at a low price. The No. 2 US brokerage,Morgan Stanley Dean Witter & Co., also offers no-frills online tradingthrough Morgan Stanley Dean Witter Online but others, like Paine WebberGroup Inc., limit access to clients who pay an annual fee.

Merrill will start advertising its new service startingonly in February, aMerrill spokeswoman said on Tuesday. The reason is that December is a badmonth to advertise financial services because people focus on holidayshopping, she added.

When it does start advertising, Merrill will contend with a plethora ofonline brokerage ads clogging the nation's air waves. The online brokerageindustry is expected to spend at least $1 billion in advertising in the nextyear, with the aim of keeping up its tremendous growth rate.