Trading | Not cheap, Fiscally concerned
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Dec 1

I could just write each one of the monthly free trade as one of the 10 great reasons, I’ll try to go deeper.

I have been a client of ZECCO for more than a year now and know a thing or two about the good and the bad. I’ll list 10 great reasons to sign up to ZECCO, then I’ll give you a link (I’ll make a small commission if you sign up there…), then I’ll list a few negatives.

Here goes:

  1. 10 commissions free trades are more than enough to purchase new positions, liquidate a few positions or rebalanced once a month. This is just the right amount to limit you, the investor, from over-trading and foolishly destroying your capital. If you must trade more than 10 times a month, the cost of the trade is still very cheap. Transferring your individual account is free. Transferring your IRA account is cheap, and the yearly fee of the IRA account is relatively cheap.
  2. Their interface and infrastructure has matured over the last year, it is very useful and much more reliable. To compensate for September’s shortfalls in accommodating the overload of trades - we, the investors, got October with unlimited free trades. They listen to us and take actions when action is needed.
  3. Trading records are now available online. They used to send us snail mail for every day we traded, which is wasteful and annoying. Now you get email alert and get to download the trade confirmation in PDF format.
  4. I’m not an options trader, nor will I use their Mutual funds service - which had greatly improved. Reason #4 is to state that these services are available and the options trade is very cheap (compared to other brokers). ZECCO also provides low interest on margin, which I don’t use - so I won’t comment on.
  5. Premium tools. Again, not a subscriber (I’m not cheap - just fiscally concerned…), but I did get a free trial of the performance tools provided by gainskeeper and those are pretty useful (if you don’t use other offline tools to trace your performance). For the same reason, I can’t comment much on the active trader service with the streaming quotes except to mention that it’s there.
  6. Excellent customer support. You call or email and always get polite and on the point response. Enrollment and cash transfer mechanisms also have greatly improved.
  7. Quick orders mechanism, ultra fast execution. I have another brokerage account, when the market is overloaded (like in September), many brokerage houses had problems. ZECCO had increased their capacity and have fared well since. You need to remember though, it is always smart to sell when you can, not when you must - you just don’t want to be looking at a panic sell and be the one that needs to participate.
  8. Nice and useful real-time charts, watch lists and positions screen. The default screen for an investor/trader is the “Account Overview” which gives you total account value, positions, orders and a frame for quick quote. Like I said, nice.
  9. Maintaining a free commission account is much better than holding your portfolio in mutual funds. You have parallel potential investments in the form of cheap ETF-s, and you have a huge selection of such investment vehicles to go long, short, or commodities based on your strategy. You, the private investor get the chance to be much smarter and more diversified starting with only 2500$. You will not get kicked out of a position in a mutual fund because that mutual fund just lost 60%, and your 4000$ went below the 2000$ minimum as is the case with mutual funds and mutual funds brokerage. In addition, the only way to invest in a bearish mind set with a retirement account is to buy bearish ETF-s (or mutual funds), most retirement account providers don’t provide you with that option.
  10. ZECCO is SIPC insured, that’s not FDIC, but it does mean that your positions will remain your positions in case something would happen to ZECCO, the value of those positions would rely on the market though. For more (and better) details, see here.

If you have any question about my experience with them, feel free to comment below.
Open an account, you won’t regret it (you might regret your investment choices though)

Like I promised, here are a few negatives:

  • The first negative has nothing to do with ZECCO, but with novice investors (like I am). Recklessness is often unnoticed until huge and painful losses get compounded. The most important thing a person with no experience should do before starting to invest is to think about his exit strategy and about his defensive moves. ZECCO gives you the freedom to be extremely successful or extremely reckless, you need to avoid the latter.
  • I’m not a fan of “ZeccoShare”, that’s all I have to say about that elective and free service. “Community” is just not what I’m looking for. There are a lot of other resources you could use to do research, use them.
  • There was no 3rd party research reports. Like I mentioned before though, there are ways around that. Last I checked though they added S&P analyst reports. Like mentioned before, they keep improving their services.
  • When you have no margin, you have to wait a day or 3 days for trades to clear before having access to your cash. This could be the same as with other brokers, but it’s something to keep in mind. You can’t be very quick with your trades if you are fully invested in a retirement account. Should you trade like a maniac in a retirement account? Let’s leave that debate to another post…
  • In both positions and balance view, you will get wrong real time data after trades or when you put an order to buy something. You need to maintain your total balance calculations off line or at watch lists.
  • To track dividend payments, you need to enter the “Funding and Transfers” tab. Sometimes you need to reenter password. Then click on “cash history”, then manually enter a date range that includes today.
  • The login sequence could be faster. I believe they are still working on improving that.
  • I don’t know who still uses a live, personal broker. You don’t get that at Zecco, nor almost anywhere else unless you are extremely wealthy.

I hope I provided you with useful info, comments are welcome, spread it around.
Cheers!