As you might know, I've recently started stock picking. For a number of years, I've been a purely technical trader living and dying by trading systems, but now I've decided to introduce some fundamentals into my world. I think the technical trader really can't go wrong using a broker like Interactive Brokers for stocks, options and futures. Some options and futures traders may want to get a broker that's a wee bit more specialized, but all in all, IB is a good fit with lightening fast executions and a solid platform.
However, for simple old stock picking where I don't particularly care about getting my fills to the penny, I thought I would give
Zecco a try. For those who aren't aware, Zecco is a relatively new broker offering $0 dollar commissions on stock trades. That's right, zip, zero, free. No monthly fees, no minimum balance and they even pay interest on your cash balance! There are some reasonable conditions to free, you're limited to 10 trades a day and 40 trades per month. After that, the trades are a somewhat reasonable $3.50 per trade. Zecco does offer options, but these trades are not free. Option trades have a $3.50 ticket charge and $0.60 per contract commission.
The platform itself is entirely web based. Right from the start, this is not conducive to day trading or any trades that require up to the millisecond timing. I think this also makes it a bad choice for option spreads since the prices can move quickly and getting filled on a spread, especially when legging in is still a bit of an art form.
With all of that, Zecco is great for what it does. Setting up an account was quite simple and they now offer an all electronic means of signing up, so there's no paper work and approval is fast. They also support ACH transfers so that you can get your account funded fast as well. Zecco is now offering $0 minimums on accounts. I'm not sure how useful a brokerage account with $0 is, but hey, it got me to sign up and put money in.
Finally, once your account is approved, here is what your "Trading Center" screen looks like.
(click to enlarge)
The Positions tab is the most useful of the bunch. This is where you can monitor your existing positions and enter new orders. Entering new orders is about as easy as it looks. The only ECN in the drop down for my trades was AUTO. A small drawback to the Positions tab is that things do not update in real time. You need to click the Positions tab to get the prices in your P/L to refresh. However, from what I've read, the ability to get prices throughout the day in real time is a new addition to Zecco. Before, apparently, this was not possible. In my opinion, that would've been a show stopper. Having to click to update is bearable.
I have not figured out how to change the quotes area on the bottom of the screen and have it persist. I made a couple of tries without success. I thought that the Quotes tab along the top might be the place to set this, but this just gives you single quotes with links to charts.
The other cumbersome thing about Zecco is that many things are framed in. Those who have ever used any administrative functions for ThinkOrSwim will notice the same thing. This is a Penson Financial back end. So you have scroll bars within scroll bars which is always a user interface faux pas. Not a deal killer though.
The other tabs are useful, but probably not on a daily basis. The History tab will allow you to see your trades over a period of time. The Account Records tab is another Penson back end page which is filled with all kinds of details related to your current account standing. Buying power, margin call summary, account statements and activity can all be found here. The Mutual Funds tab is probably for those people who still buy mutual funds. It's interesting because Zecco, or at least the community surrounding Zecco is clearly an ETF crowd. The Messages tab is presumably messages from Zecco to you during the trading day. I haven't received a message yet. The myInfo tab contains anything and everything you wanted to know about yourself. Your name, your phone number, your date of birth. Whenever you forget these things, you can go to this tab for a friendly reminder. You can also change your address here as well as download informational PDFs.
So overall, Zecco may lack a few bells and whistles, but it lives up to the promise of free trades. My trades were certainly placed at $0 commission and the execution speed seemed quite reasonable (and I was trading odd lots). This is what it's all about, and Zecco delivered. Someone who is managing a portfolio of ETFs and practicing modern portfolio theory should really give Zecco a serious look. It could save you hundreds of dollars each time you rebalance your long term portfolio.
This is not the broker that I use for complex option trades or speculative trades. As mentioned, I think Zecco would be great for people who are rebalancing monthly, quarterly, annually, etc. This is the broker that I've been using for my
monthly picks and I've been quite satisfied. Even though I have "option clearance" at Zecco, I'll continue to use my old stand-by Interactive Brokers account for those trades.
Maybe one day Zecco will provide an API and we can hook it into
RightEdge, what do you say Zecco?
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