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2019 review of TradeZero investing: brokerage fees and commissions, advantages and disadvantages, minimum requirements, level 2 quotes, margin trading and shorting stocks.

TradeZero Overview

TradeZero specializes in low-cost day trading. With several software tools and free trades in some situations, the broker is worth taking a look at.

Company Details

Based in the Bahamas, TradeZero actually manages two companies: TradeZero America and TradeZero Bahamas. The American company accepts applications from U.S. citizens and is governed by U.S. day-trading rules set by FINRA and the SEC. This means each account needs to have a balance of at least $25,000 in order to day trade. The American company is a member of SIPC, which protects each account up to $500,000.

The Bahamian branch is not governed by U.S. regulations, which means there is no $25,000 minimum (there is a $1,000 minimum). While this may sound great, the broker does not accept applications from U.S. or even Bahamian citizens. Apparently, this company is for residents of other countries due to Bahamian regulations. While TradeZero Bahamas is not a member of SIPC, brokerage accounts are insured through Lloyds of London and Bahamas First General.

Vision Financial Markets serves as the clearing firm for all TradeZero brokerage accounts. Vision is a U.S. company and is a member of FINRA.

Trading Technology

Both TradeZeros use the same software. There are three trading platforms available to TradeZero customers. The first one we’re going to look at is called ZeroFree. As the name suggests, there is no charge to use it, but it’s rather simple. It’s a browser-based trading environment that is compatible with Windows and Mac. It can also run on tablets and phones, although as we’ll see shortly, TradeZero has a mobile app.



ZeroFree provides real-time data and news. Level I data and a watchlist are included at no charge. For an additional fee, Level II quotes can be added to the platform. The charge is $25 per month, and the broker-dealer throws in hot keys for free if you sign up for this Level II package. Options trading can also be added for $25 per month.

The platform displays important account information, such as buying power and available cash. The trade ticket offers multiple order types, short and cover buttons, and several time-in-force options. ZeroFree’s charting program offers technical indicators and the price history of extended hours.

The next platform up is ZeroWeb. Not only does this program offer Level II quotes, it actually incorporates the ability to create multiple Level II windows at the same time. Up to 6 can be created. This feature could come in handy if you were trading multiple stocks at the same time.

ZeroWeb also offers real-time news. It provides data from AMEX and NYSE, which ZeroFree does not provide. ZeroWeb has custom layouts, which is a nice feature if you’re going to be using the software regularly. Up to 5 watchlists can also be created (with thirty ticker symbols each), and hot keys are customizable.

Charting on ZeroWeb is pretty similar to what’s available on ZeroFree. There are a few technical indicators, extended hours, and simple drawing tools.



There is a $59 monthly charge for ZeroWeb. For American clients, this price also includes access to the broker’s finest platform, ZeroPro. Non-Americans who sign up through TradeZero Bahamas don’t get ZeroPro for this price, but they do get ZeroWeb for free with 80,000 shares traded in a month.

ZeroPro comes with a lot of the same great features that ZeroWeb offers. More charting windows and Level II windows can be created, however. ZeroPro provides more technical indicators and drawing tools. Another difference is that Pro can trade options, whereas Web cannot. Furthermore, ZeroPro offers alerts, but ZeroWeb does not.



We found several order types on ZeroPro’s order ticket. These include stop market, limit on close, market on close, one cancels other (OCO), range, and conditional. An order window will send all entered orders at the same time. Trade buttons are color coded on the ticket.

Traders who have an account with TradeZero Bahamas must pay $79 per month for ZeroPro; but this charged is waived for accounts that can reach 100,000 shares in a month.

Mobile App

A mobile app is available to both TradeZero America and TradeZero Bahamas customers. It functions on Apple and Android phones and tablets, and there is no charge for it. Data streams in real time. The app can be synched to either of the two major platforms.

Some of the features available on the broker’s desktop platforms are missing on the app. We didn’t find hotkeys or Level II information, for example. TradeZero promises that options trading will be possible on its mobile platform in the near future. Also currently missing is streaming financial news, mobile check deposit, and bill pay.

We did find a watchlist on the app, and price information streams in real time on it. The app offers charting with indicators, up-to-date news articles, and a trade ticket. Although the app does miss in a few areas, the trade ticket offers direct-access routing, which is sure to please active traders. There are also several duration options and order types.

Options and Other Investment Choices

TradeZero provides access to pre-market and after-hours trading sessions. Although a few broker-dealers today have decided to cut costs by eliminating options trading, TradeZero has not followed this trend. Besides options, stocks, and ETF’s, TradeZero also offers trading in warrants. Unfortunately, there are no bonds, currencies, futures, or mutual funds available.

The company’s best options trading tools not surprisingly are on ZeroPro. Besides single legs, complex strategies are also available. We found butterflies, iron condors, calendars, and several other choices. As with equities, direct-access routing is possible; and there are several order types, too.

TradeZero Cost of Trading

Now we come to what all of this costs. TradeZero has two commission schedules—one for each company. TradeZero America charges $0 for stock, ETF, and option trades. To qualify for this unbeatable rate, the equity must trade on the Nasdaq, NYSE, or AMEX, and have a price above a dollar. The fantastic rate applies to both market and limit orders, and even better, there are no per-contract option charges.

Over-the-counter stocks and stocks on the major exchanges priced under a dollar cost 0.2¢ per share. This rate applies to the first 250,000 shares traded in a month. Transactions after that limit are free. In all cases, sell-side exchange fees are passed onto the trader.

TradeZero Bahamas charges $0 for limit orders. The limit order must not create an immediate match to qualify for this rate. Other requirements include a minimum of 200 shares, a price of at least a dollar, and the security must trade on the Nasdaq, NYSE, or AMEX.

Market orders cost 0.5¢ per share with a $0.99 minimum. Options are $0.99 plus $0.79 per contract. Assignments and exercises cost $35 each. Sell-side fees for stocks and options are passed through.

There is a $15 charge for using a live representative to place a trade with either firm.

An account with either TradeZero broker carries no on-going fees. The Bahamian one has a $500 minimum opening requirement, which is also the amount required to start day trading. Because TradeZero America is governed by U.S. regulations, a $25,000 deposit is required to day trade. The broker requires $2,500 to open an account.

Banking Features

Strangely, TradeZero only accepts bank wires to fund an account. The American branch does not use the ACH system. Furthermore, the Bahamian branch charges $30 for an incoming wire and $70 for an outgoing one. TradeZero America customers pay $50 for an outgoing wire and nothing for an incoming one.

TradeZero does not offer checks or a debit card with a brokerage account, and this failure will subtract more stars in this category.

Retirement and Investment Advice

TradeZero does not offer portfolio management or retirement accounts.

Direct-Access Routing

TradeZero customers can send orders to specific market makers and ECN’s. During our research, we found NSDQ, BATS, EDGX, and ARCA. Commission-free trades need to be sent to EDGX. The broker does not charge additional fees for routing orders to specific venues.

Level II Data

Amazingly, TradeZero offers Level II quotes on all of its platforms, the mobile app being the only exception. ZeroFree does require a $25 subscription, which will subtract a star here. Another issue we didn’t care for was the use of one color—blue—for all of the prices on ZeroFree. Different shades are used, but multiple colors make data easier to read. The Pro and Web platforms do use multiple colors for prices in their Level II windows.

Extended Hours

TradeZero knows its customers want access to extended-hours sessions. The broker provides a pre-market period from 7:00 am until the opening bell. Its after-hours period starts at the closing bell and lasts 2 hours.

Margin

TradeZero clients pay a flat 5% for all borrowed amounts. Bahamian accounts receive a high degree of leverage, although the exact amount varies based on an account’s balance. The broker requires at least $2,500 to qualify for 6:1 intraday leverage. Positions held overnight qualify for a 2:1 ratio.

TradeZero America customers get 2:1 leverage with a $2,500 in assets.

Shorting Stocks

In addition to day trading, shorting stocks is another specialty that TradeZero has. The broker promises an “extensive” list of stocks that can be shorted. TradeZero uses Vision and Convergex to provide shortable equities. The list is updated every morning. If a stock is shortable, it will have a green S next to its ticker symbol.

Amazingly, every trading platform TradeZero offers has a direct hard-to-borrow locate system. We practiced shorting stocks on ZeroWeb. When we clicked on “Short” on the trading ticket a pop-up window would tell us if the stock was hard-to-borrow. In this window, we entered a ticker symbol and the software would display how many shares were available. Stocks that are classified as hard-to-borrow carry fees, and this pop-up window states the exact price. To borrow 100 shares of USO on our test day, the fee was $1.30. Once you accept the shares, they stay with your account for the remainder of the trading day.

Investment Education and Research

TradeZero has a minimal amount of learning materials on its website. During our research, we found videos that demonstrated the use of the broker’s platforms. Topics in these resources include how to use hotkeys, how to build a custom layout, and how to use Level II data.

ZeroPro has alerts and a stock screener. The other platforms don’t offer these tools. Pro also provides the day’s market movers, which the other programs fail to deliver.

Customer Service

A TradeZero agent can be reached over the phone anytime during the week from 9 am till 5 pm, Eastern Standard Time. Unfortunately, there are no weekend or evening hours. The area code is 954, a Floridian number.

One feature the broker has added to its website is a chat function. The website claims it is staffed 24 hours a day, 7 days a week. However, on a weekday morning at 5:30 am, EST, no one answered our chat request for over 20 minutes. When we finally got a response, it took several more minutes to receive an answer to our second question. TradeZero says it will accept orders for securities through its chat system, although this incurs the agent-assisted surcharge.

Recommendation

TradeZero would be a good choice for Americans who plan to frequently trade options and stocks, but don’t need access to bonds or mutual funds. Higher rated Firstrade also has $0 commissions and offers both bonds or mutual funds.

TradeZero could also be a good broker for non-Americans who don’t have a minimum level of funds for day trading in their home countries, but can meet TradeZero’s $1,000 requirement. Firstrade is again a better choice for residents of Australia, Belgium, China, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, South Korea, Mexico, New Zealand, Poland, Singapore, Spain, Taiwan, and United Kingdom.

We also recommend the brokerage firm for traders who plan to short stocks or route orders to specific exchanges. We can’t suggest TradeZero for new investors because it doesn’t have a sufficient level of learning resources.

TradeZero Review Recap

With two brokerage firms, TradeZero offers a lot of services that should appeal to advanced traders anywhere in the world.