By Stock Charts | June 6, 2007
Zecco, the discount brokerage already offering free trades has sweetened the deal, dropping their minimum balance to $0! Zecco offers free stock trades and cheap commissions on options as well. You can make up to 10 free trades a day and up to 40 free trades per month before they start charging you $3.50 per trade – which is still a great deal! Margin trading requires a $2000 balance. You can fund your account through check, ACH, or wire transfer.
From what I’ve heard thus far, it seems like Zecco had a few problems initially, but I’ve talked to a few of my friends that currently have a Zecco account and the general consensus seems to be positive. As a discount brokerage, Zecco obviously doesn’t have the same level of resources as eTrade or Ameritrade, so that’s something to take into consideration. Heres a few comments from Eric over at TheFreshTrader.com:
- Customer service is difficult to contact and slow to respond
- You donâ€™t have all the sophisticated tools and reports that most other brokerages offer
- Zecco is not supported by TurboTax at the moment (although this may be fixed by next year), so I had to manually enter my trades into the tax forms
- It may be more difficult to short stocks than at the other major brokerages because there are fewer people to borrow from
- Your account information will sometimes display incorrectly because they are constantly updating the website and will mess up on occasion
I’ve been meaning to switch over from Scottrade for a while now (or at least open an account with Zecco as well) and I think this latest promotion is enough to win me over. I will post a review and my thoughts on Zecco once I make the switch. If you’re interested, head over to Zecco.com and check them out.
Zecco has just changed their pricing for new accounts from 40 free trades/month to 10 trades/month, and there is a new requirement that you must have $2,500 in account equity (cash + value of stocks). If you have less than $2,500, then trades cost $4.50. However, existing customers and anyone who applied before 10/1 will keep the old pricing until the beginning of 2008. After that, everyone will be at 10 free trades/month. Here’s their reasoning behind it:
Instead of paying for free trades you may not use, weâ€™re investing that money in the tools and functionality that you will. Over the coming months you can expect:
- Significant investments in the number of service representatives and training.
- Addition of 3 and 4 legged options strategies so you can trade butterflies, condors, and more.
- Release of a sophisticated options analytics platform.
- Access to ZeccoShare, the ground-breaking investor social network at zecco.com.
This really won’t affect most investors, who should probably have more than $2,500 invested, and would probably make less than 10 trades a month. It looks like the free trading is starting to take a toll on Zecco’s bottom line. Still, this is one of the best deals available in terms of brokerage commissions. For more information visit their signup page.For more stock news and chart analysis, subscribe to my RSS feed, or stock newsletter:
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