Zecco Brokerage Account Review: April 2008
I have discovered over time that Zecco seems to have a somewhat limited short inventory, unlike their competitor, SogoTrade.
If you're having trouble deciding on a broker, this article of things to think about when choosing a discount broker can give you some food for thought.
Zecco also gives you the ability to trade options for a relatively decent price. However, no free option trades.
Zecco Kind of Bites
Zecco is not good for a very active short-term trader. You will not find any sort of data solution with these guys; get ready to pony up for a third-party data service (which you should probably do anyways). The only saving grace is that there are real-time charts with a fair bit of options (various indicators, candlesticks, etc. from BigCharts). However, they will not update in real-time, so be ready to click 'refresh'.
Do not use Mozilla Firefox to access their web-based trading platform. I have had many technical issues while attempting to use Mozilla. I recommend that you use MSIE (ugh).
I have often experienced connectivity issues in the mornings and evenings.
price improvement, execution
One thing that Zecco does seem to be good at that SogoTrade is not (SogoTrade is my other brokerage account) is price improvement on orders. Execution times seem similar, but if I enter a limit order with SogoTrade I have NEVER gotten a price improvement. Not even from like $15.00 to $15.0001. Limit orders with Zecco will frequently feature price improvements, even if it is just a few cents on a share here or there. One of my earliest trades with Zecco was on the super-illiquid CBOU stock, and a limit sell order of $2.90 from the night before was executed in the morning at $2.95 - from my experiences with SogoTrade, I doubt they would have done the same; it makes me wonder if they're keeping those price improvements for themselves.
Zecco has all sorts of orders
Zecco has all the order types you need, specifically the ones SogoTrade lacks - stop, stop limit, and virtual trailing stop. This makes them suitable for the more active trader.
Also, Zecco does not count modified orders and cancelled orders against your free trades. You can sit and modify/cancel trades all day long and not pay a penny, or use up your precious free trades. SogoTrade is not so forgiving with its free trade promotion - a cancelled or modified order uses those puppies up.
if you like penny stocks Zecco is pretty good
Zecco charges no extra fees for stocks with very low share prices, unlike many brokerages which will typically add extra commissions for stocks that are less than $2-$5
Zecco is good for an IRA that trades frequently
Unlike SogoTrade, Zecco offers an IRA option. Currently they only offer traditional and Roth IRAs but they claim they might attempt to add personalized 401ks and SEPs in the future.
Once again, you get 10 free trades with the IRA account each month, and if you have both an IRA account and a taxable account with Zecco, you will receive 10 free trades for each account! Pretty damn good deal for only having to park $5000 with these guys.
However, there is a $30 yearly IRA fee. Thus, I would say that you have make at least 6 trades in a given year to justify this fee. However, if you are like most people, you would probably like to dollar-cost-average into ETFs, and Zecco will allow you to do this very easily without being eaten alive by commissions. You could easily be averaging in on an ETF each month share by share if you wanted to!
That sort of dollar-cost-averaging ability is very rare among discount brokers. The only other broker that I am aware of that could offer similar DCA potential is ThinkorSwim, because they offer 3 free mutual fund trades per month, and they offer no annual fee on IRA accounts. If you want to buy or sell traditional mutual funds with Zecco, you will have to pay $10 each way.
Pros and Cons of investing with Zecco
Sign up with Zecco and get a free book.
However, I still have a Zecco account, those 10 free trades are hard to pass up, especially considering they give you money market sweep. (Denying you money market sweep is what a lot of deep discount brokers will do in order to provide you with super-low commissions, etc.)