My Review of Zecco Trading Online Discount Brokerage Account 2011

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What are my criteria of good brokerage?

This is my second installment of discount brokerage review. In my previous article, I have provided a review about Just2Trade trading system. In this article, I’ll review Zecco brokerage hence I have this account for close to 3 years. Zecco stands for Zero Cost Commission. As you know, trying to find reliable brokerage can be a headache for a regular investor. One of my regular brokerage I have been using is Zecco. I would recommend using Zecco if only you have $25,000 account balance / fund to invest hence this is one of the criteria to get the 10 free trades/month. I’ll explain later at the later part. My criteria of good brokerage are as follows:

  • Low commission fees to trade stocks online as well as etf, mutual funds (if necessary)
  • Reliable, can be access freely, stable trading platform
  • Offer ACH electronic transfer
  • Responsive and contactable customer service


Background / History

Zecco Trading is one of many US online brokerages. It was established on 2006 by Jeroen Veth, former Merrill Lynch Vice President. Zecco headquarter is currently located at Burlingame, California (USA). It currently uses Penson Financial Services as their clearing. Penson Financial Services Inc, member of FINRA & SIPC, holds and clears all Zecco client assets. All Zecco accounts are insured under SIPC and supplemental Lloyd’s of London coverage provided by its clearing firm, Penson Financial Services, Inc.


What are the details?

Zecco Trading offers product such as stocks, options, mutual funds & forex. You can easily trade stock online with their web trade. There is no minimum balance to open an account with Zecco. However to get 10 free trades per month, you need to have $25,000 account balance. There is no inactivity fee. For foreigner (non US citizen), you can open Zecco account as well. Zecco provide accounts to individuals, joint holders, retirement accounts (Traditional IRA, Roth, Rollover) etc.

  • Products Offering: Stocks, options, no-load mutual funds, Forex (separate account)
  • Market Orders: $4.95 per trade
  • Limit Orders: $4.95 per trade
  • Mutual Funds fees: $10.00 per trade
  • Options fees: $4.95/trade+$0.65 /contract
  • Minimum Balance to Open: $0. $2000 minimum for margin accounts. $25,000 minimum for day trade
  • Account Inactivity Fee: $0.00
  • Some Other Fees: DTC Out: $25.00. ACAT Out: $50.00. Paper statement: $1.50, E-paper: $0.00
  • Maximum Margin Rate: Based on proprietary base rate

Note: Recently, Zecco change its pricing structure, there is no more 10 free trades for $25,000 or more account balance. This information is updated on 2/25/2011.


How to open Zecco account?

Opening account is straight forward by filling its online application. Most people will get their account information within a day after application submission. To apply for margin account, option trading account and Money Market Sweep Account, you will need to fill separate form. I just emailed my forms to customer service and they should apply any changes to your account within couple days. Note: sometimes, they may require your identification information; you can fax or email the information to them through their customer service.


Inside Zecco Trading Account

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Zecco trading platform view
Zecco trading platform view
Zecco trading platform view

My Experience / Review

I have deal with various discount brokerages. As mentioned before, I started investing with Fidelity on 2006, mainly buying mutual fund. Then my friend introduced me to Zecco early 2008. Since I haven’t used many different brokerages, I really like with Zecco offering. The trading system is simple and accessible through web. During this period (2008 - March 2009), Zecco still offers 10 free trades per month with only $2000 balance (i.e. $4000 balance for margin account). However this offering was changed on March 2009, nowadays the minimum requirement to get 10 free trades per months is by having $25,000 balance in your account. You can also get similar deal through WellsTrade by Wells Fargo. Wells Fargo offers 100 free trades per year with $25,000 account balance (i.e. roughly 8.3 free trades per month). Still Zecco provides better value with the same account balance of $25,000. Now I use Zecco as my primary brokerage to trade and invest. If I reach my 10 free trades limit within a month, I’ll use either Just2trade or Lightspeed. If you reach your free trades limit, any trade will cost only $4.50/trade.

As of February 25, 2011, Zecco Trading will not offer any free trades for any customer with >$25,000 account balance. The stock trade will cost $4.95 per trade.

So what is the commission structure in Zecco, 10 free trades per month for $25,000 account balance otherwise it is $4.50 per trade. There is no limit for amount of shares. This means trading 1 share or 10 shares or 1000 shares will cost free or $4.50/trade. Trading option will cost $4.50+$0.50/contract. No free trades is provided for Option Trading. So for 2 contract of options, you will pay $5.50 ($4.50+ 2 x $0.50). Margin rates are less competitive compare to Just2trade or LightSpeed.

If you have been using Zecco before, you might notice about double login using Zecco. This is one of my complaints. Zecco will require 2 different passwords to login their system. The first password is to login through their general account system and the second login to access the trading system. These 2 systems are very cumbersome, however recently Zecco go through a facelift which only require 1 login to access all system. This is definitely a change from previous system. So as of today, you will only need to provide your login information with 1 password to access their brokerage system.


gainskeeper year to date
gainskeeper year to date

Other premium services

The trading platform is very simple and responsive. I can place a Market order, Limit order, Stop Loss, Stop Limit, and Trailing Stop. Though there is no before & after hour trading. Zecco also provide 2 premium services such as:

  • Gainskeeper ($24.99 for 6months) – GainsKeeper offers a suite of automated 'tax smart' trading tools to individual trader / investor. It also can provide custom Schedule D which can be used for filling tax. Buy and Sale details can be downloaded and integrated to your tax software such as Intuit TurboTax and H&R Taxcut.
  • Quotestream II ($20/month) – It delivers real-time or delayed market information. It can create up to 10 portfolios/52 symbols per portfolio. It also can provide market mover information.

I usually email the customer service if I have any issue. The customer service is very responsive. Other people have mentioned a non responsive customer service, though I never have any issue.


 

Final Thoughts

Pros:

  1. 10 Free trades per month with $25,000 balance.
  2. Reliable web-based trading
  3. Great premium service (extra fees) such as Gainskeeper (Tax)
  4. Forum and community of traders.
  5. Ideal for beginner trader
  6. Zecco Zap Trade – New toolbar for trading while doing research

Cons:

  1. No conditional/ logical order & No complex order such as MOO (Market On Open) & MOC (Market on Close)
  2. Need to pay extra for Gainskeeper $24.99 per 6 months
  3. Only web-based trading & No software trading
  4. No pre-Market & After Market hour trading

 

People Complaints - from research

The following are complaints from people about Zecco:

  1. You need to double login to trade – This has been fix
  2. You recieve paper statements of your trading activity every day – Zecco implement e-statement. Paper statement will cost $1.50.
  3. Zecco has terrible customer service
  4. Website is very difficult to use
  5. Stock chart is very basic and limited trading tools

Awards

Zecco is feature in SmartMoney magazine and Barron Online as one of better brokerage with low fees & commissions.

Disclaimer

Disclaimer: I have no affiliation with Zecco other than I use it for trading. Please do your own research for additional details. All information is as updated as August 3, 2010. Please trade responsibly.


No more Zero Commission after 03-29-2011

I just received an email from Zecco about their new commission rate tonight (2/25/2011). Zecco will no longer offering 10 free trades per month. Though, there are no minimum balance requirements or inactivity fees to open or maintain a Zecco Trading account.

Starting on March 30, 2011, Zecco's new commission rates for current customer will be:

  • Equity trades: $4.95 per trade
  • Options trades: $4.95 per trade, plus $0.65 per contract
  • For stocks and ETFs priced under $1.00, online trades are $6.95

Updated on 2/25/2011

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Comments 8 comments

eshaw profile image

eshaw 6 years ago from Huntsville

what if you got 100 dollar in your account what do you recommend


chan0512 profile image

chan0512 6 years ago from Camarillo, CA Author

Eshaw,

If I only have $100, I would save the money in my online saving account which pay high interest. Commissions/fees can eat through my capital. Though if I still want to invest, I will invest in ETF through Fidelity which doesn't charge any fees to buy ETF and there is no minimum as well. Fidelity offers 25 etfs with free commission. I would recommend to wait until I have $5000 minimum before I start investing in stock. Stock investing need strategy and can be a challenge with low capital. Usually, I have my price target when I'll sell or stop due to excessive loss for the stock.


LillyGrillzit profile image

LillyGrillzit 6 years ago from The River Valley, Arkansas

Great investment information...


chan0512 profile image

chan0512 6 years ago from Camarillo, CA Author

@Lilly Thanks for your comment


chan0512 profile image

chan0512 5 years ago from Camarillo, CA Author

Dear Cheryl,

Sorry to hear your issue. Market has been very volatile. Hence your investment is on margin, it is not unusual to receive a margin call from your brokerage. Please invest only your own money. You won't receive any margin call. If you don't understand about margin account, please have a professional to advise you. You can do according to Zecco's recommendation such as liquidate your account or add more funding.

Otherwise you can try to invest in mutual fund. Stock market is very volatile nowadays, it can swing to your favor and out your favor in a heartbeat.

Thanks,

chan0512


RB 4 years ago

Hi,

GUYS DO NOT INVEST WITH ZECCO. THEY ARE A SCAM. I HAVE LOST OVER $8000, $5000 DUE TO ZECCO'S FAULT. THEY EXECUTE TRADES LIKE A MINUTE LATER, INSTEAD OF LIKE 2 SECONDS UNLIKE ETRADE, AND THEY CHARGE $750 TO BUY OR SELL A PENNY STOCK. WHEN I BOUGHT MY PENNY STOCK, THE COST WAS $5. BUT WITH NO WARNING, AND NO LETTER OF NOTICE TO CUSTOMERS TO EXIT POSITIONS IMMEDIATELY, THEY TOLD ME IT WOULD COST ME $750 TO SELL MY PENNY STOCK POSITION DUE TO FEES FROM PENSON CLEARING HOUSE. ETRADE IS BIGGER AND THEY KEEP SHARES OF PENNY STOCKS, SO THEY CAN CREATE A MARKET FOR YOU AND WILL AVOID THESE OUTRAGEOUS FEES. ALSO, THE STOP LIMITS DON'T WORK HERE. ON ETRADE ALL MY STOPS HAVE EXECUTED. BUT NOT HERE YOU WILL LOSE MONEY ON ZECCO. PAY THE EXTRA COMMISSION AND GET ETRADE. YOU WILL MAKE BACK THAT MONEY EASILY. ETRADE HAS BETTER CUSTOMER SERVICE TOO, AND THEY OFFER CLASSES. ETRADE HAS A SCANNER TOO THAT WILL PICK UP RISING PENNY STOCKS. LAST, ZECCO HAS NO TRADING MOBILE APP. THEIR APP JUST SHOWS CHARTS, OF WHICH THERE ARE MANY OTHER APPS OUT THERE THAT DO THAT. ETRADE YOU CAN TRADE ON SMARTPHONES AND INSTANTLY UPDATE AND ALERT YOUR POSITIONS. YOU WILL LOSE MONEY ON ZECCO. I THINK THE MOST SOMEONE MADE MONEY ON ZECCO LAST YEAR WAS 500%, OR A 5 X GAIN. YEP THAT IS THEIR TOP GUY. ETRADE, THERE ARE PEOPLE THAT PUT IN $1000 AND GOT LIKE $30,000 IN RETURN... LOTS OF PEOPLE... THERE ARE MORE EXPERIENCE TRADERS ON ETRADE TOO, AND YOU WILL GET THE BEST TOOLS. DO NOT WASTE YOUR TIME ON ZECCO, AND LOSE $8000 LIKE I DID. THANKS


chan0512 profile image

chan0512 4 years ago from Camarillo, CA Author

hi RB,

Sorry to hear your issue with Zecco. It probably is safe to say that Zecco is not suitable for Penny stock traders. All the best with your trading.


RB 4 years ago

yea more probs with zecco now.... my last remaining penny stock with them just jotted up 100%... i called in to sell, (noticed i called in... you cannot place trades online on all penny stocks now, you have to call in)... i waited 30 minutes for them to finally place the trade, and they broke the news to me. they said that i would not be able to do a "GTC" but only a daily sale... basically i would have to call in each day to sell the stock at the limit i want, as they cannot place a Good-till-cancelled order on my penny stock... lol, yes, so i have to call in and wait 30 minutes for them to finally place it, until that penny stock sells at the limit i want. also, i would be incurring a $700 fee... so i was like, ok, i'll incur the fee, just sell it. i had hoped to sell it that day, but wait, more bad news... i was told i exceeded the 10% volume limit on the stock, and zecco would block my sale as they actually have to have that particular stock in one of their member's account to create liquidity... so instead of selling my 2.3 million shares at $0.0006 per share, i would only be able to sell 394K shares... yes lol, and that's after incurring a $700 fee... so to completely sell this stock completely i would have to incur a fee of about $4000, like 5 times what i paid for the stock in the first place... not only that, but each day i would have to call in, wait 30 minutes for them to even place the trade... this is pathetic...

i'll take my loss of $1000 and refuse to sell this stock... i don't care if it drops to zero... they ain't getting a lick of $700 from me... btw if the stock goes out of business, they can incur that $700 on u, claiming they had to sell it off... by that time i will have a lawyer, along with the hundreds of other other victims, filing a multi-million dollar lawsuit for fraud, misleading advertisement, and bait and switch scheme

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