- Personal Finance
My Review of Zecco Trading Online Discount Brokerage Account 2011
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.
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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 AccountClick thumbnail to view full-size
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.
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.
- 10 Free trades per month with $25,000 balance.
- Reliable web-based trading
- Great premium service (extra fees) such as Gainskeeper (Tax)
- Forum and community of traders.
- Ideal for beginner trader
- Zecco Zap Trade – New toolbar for trading while doing research
- No conditional/ logical order & No complex order such as MOO (Market On Open) & MOC (Market on Close)
- Need to pay extra for Gainskeeper $24.99 per 6 months
- Only web-based trading & No software trading
- No pre-Market & After Market hour trading
People Complaints - from research
The following are complaints from people about Zecco:
- You need to double login to trade – This has been fix
- You recieve paper statements of your trading activity every day – Zecco implement e-statement. Paper statement will cost $1.50.
- Zecco has terrible customer service
- Website is very difficult to use
- Stock chart is very basic and limited trading tools
Zecco is feature in SmartMoney magazine and Barron Online as one of better brokerage with low fees & commissions.
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