2019 ZacksTrade review: brokerage pros and cons, commissions, fees, account minimums, rating, trading platform, investment research tools, education, and customer service.


Overview of ZacksTrade

If you have benefited from the materials through Zacks Investment Research, you may be interested to know that the company also now operates a low-cost broker called ZacksTrade. You may or may not want to take the plunge depending on your trading habits. This online broker succeeds in some areas, but fails in others. Let’s check it out.


ZacksTrade Basics

Rating:  ZacksTrade rating

  • Stocks & ETFs: $0.01 per share; $3 minimum
  • Options: $3 for first contract plus $0.75 per additional
  • Mutual Funds: $27.50


ZacksTrade Pros

  • Great trading software. ZacksTrade uses the same platforms as Interactive Brokers.
  • Per-share commission schedule. Day traders and other high-volume traders will appreciate this.
  • Free materials from Zacks Investment Research. A lot of traders rely on these resources, and ZacksTrade is a good place to get them at no cost.


ZacksTrade Cons

  • Weak fund resources. Zacks focuses on global stock trading.
  • Retirement savers don’t have a lot here. Not many IRA types are available.
  • No portfolio management. This broker definitely needs a robo advisor.
  • Fees that other brokers don’t assess. Data and ACH transfers can incur charges.


What Type of Trader is Best Served at ZacksTrade?

ZacksTrade offers a suite of very advanced trading tools with a per-share equity commission schedule. So obviously, day traders and other frequent equity traders will find good reason to open an account here. Notice that we said “equity” traders. While the broker offers trading in derivatives, it doesn’t offer the same generous commission schedule on options. More on that later.

Another advantage that ZacksTrade has over other brokerage firms is its international stock trading. The broker’s customers get to trade Canadian, Mexican, European, Asian, and Australian equities. And there’s no need to open a separate account.

US-based mutual funds are available at ZacksTrade, and so are fixed-income securities. US and global ETF’s are on the menu, too. Missing are futures, forex, and cryptocurrencies.

As for accounts, we found both taxable and retirement versions. However, the broker-dealer doesn’t offer SIMPLE or SEP IRA’s, and individual 401(k)’s aren’t on the menu, either.

Now that we have an overview of what’s available at ZacksTrade, let’s examine its performance in major categories.


Funds

ZacksTrade Mutual Funds Rating

While ZacksTrade offers mutual funds, the broker wasn’t able to tell us how many funds it offers. We do know that more than fifty fund families are available. Every purchase or sale comes with a $27.50 transaction fee. While ETF’s are also on tap, ZacksTrade does not offer any commission-free.


Customer Service

ZacksTrade Customer Rating

Because ZacksTrade caters to experienced traders, it only provides customer support during the weekday. Besides its phone number, it also offers online chat. There’s a self-service section after logging into the ZacksTrade website. The brokerage firm does not have any brick-and-mortar locations.


Pricing

ZacksTrade Pricing Rating

ZacksTrade’s great software (which we’ll look at momentarily) is free. But the broker has a tendency to charge for all sorts of data. International data is available, a great service.

A ZacksTrade account carries no on-going fees. There is a $2,500 minimum deposit requirement to open a new account.

As for trades, stock purchases and sales cost $0.01 per share. Zacks does impose a $3 minimum commission. Equities below $1 in market price cost 1% of principal, and the $3 minimum trade fee is enforced here as well. Foreign stocks carry various commissions depending on the specific exchange.

Derivative trades are $0.75 for each contract, with a $3 charge for the initial contract. Exercises and assignments are free.

One annoying charge that ZacksTrade imposes is a $1 ACH fee for every electronic transaction after one per month.


Open Account

Trade stocks, options & ETFs for as low as $1 until 2020.


Margin

ZacksTrade Margin Rating

ZacksTrade currently charges between 4.49% and 5.69% for margin debits. Accounts can be setup as regular margin or portfolio margin accounts. Regular margin accounts have 2:1 leverage, while portfolio margin accounts can get as much as 6:1. A net liquidation value of at least $110,000 must be maintained to qualify for the latter.

The broker’s maintenance margin requirement is 25% for long stock positions. This increases to 30% on short positions.


Portfolio Management

ZacksTrade Management Rating

ZacksTrade does not offer any account management services at this time. Given its low-cost model, a robo-advisory service could be a good addition in the future.


Browser Platform

ZacksTrade Platform Rating

The ZacksTrade website does have a login, but the site only provides account management. There is no trading capacity.

Zacks does offer a browser platform. Named ZacksTrader, it has a rather plain interface. But there are some good tools on it. For example, the software’s order ticket provides direct-access routing, a rare feature on browser platforms. Some of the available venues we found include CBOE2, PSE, and BOX.

There are several order types available, including on-close orders, stop, and trailing types. Time-in-force choices include GTC, IOC, and FOK. Good-till-date orders allow specific times and dates to be entered.


ZacksTrade browser platform


The order ticket can also trade bonds and warrants and has access to more than 90 foreign securities markets. Although there is a commodities tab on the platform, Zacks does not offer futures trading.

Options can be traded on the browser system, although only puts and calls are available in chains. We’re disappointed that the software cannot display multi-leg strategies. However, in the order ticket, a “Spread” menu offers several strategies. These include straddles, verticals, diagonals, iron condors, and calendars.

Charting is very rudimentary on this platform. There are no tools at all, and a graph cannot be displayed full screen. Yahoo’s free website charting is much better.

One feature we liked on the browser system is Market Pulse. Green and red horizontal bars show gains and losses for bonds, currencies, and stocks around the world. This would be a good tool for traders who need information on global markets.


Desktop Software

ZacksTrade Trading Rating

Traders who need more than the simplicity of the browser system can upgrade to ZacksTrade’s very advanced desktop platform free of charge. Called ZacksTrade Pro, it offers many tools, and we don’t have the space here to go through all of them.


ZacksTrade desktop platform


One of the highlights of the platform is excellent charting. There are many technical studies that can be displayed below or on top of a stock’s price history. This itself can be shown in a range of styles, such as line or candlestick. There’s also a great deal of customization available. For example, the width of candlesticks can be adjusted, and the colors of studies can be changed.


ZacksTrade charting


One feature we really liked during our trial was the right-click menu. Here, there are many functions that are available. Trade of course is one. Alerts can be selected, and so can time and sales data.

The trade ticket is in the upper-left corner of the platform by default. It offers basic and advanced modes. The basic version includes the normal fields, like quantity of time in force. Clicking on the advanced button produces several other options. These include order routing, and there are many more choices than the browser system offers. Also on tap is a margin window that displays the margin requirements for the ticker entered.

An option chain window displays calls and puts on ZacksTrade Pro. A drop-down menu can switch over to spreads. Clicking on a bid or ask price automatically populates a trade ticket. This ticket has all the advanced features that the stock ticket has plus Greek values.

The option trading window has a toggle switch, which allows for multi-leg strategy building. We found butterflies, synthetics, iron condors, and more. A small payoff chart shows the maximum gain and loss for a strategy.

The upper-left corner of the platform has a blue “New Window” icon. This is where many more tools can be found. For example, the Level II data box is here. Missing on the platform is live streaming of video financial news.


Mobile Platform

ZacksTrade Mobile Rating

Now we come to ZacksTrade’s mobile platform, which functions on tablets and phones. Called Handy Trader, it provides a lot of very useful tools. Extended-hours trading is possible, and there are multiple order types and time-in-force choices. There is an optional wheel order entry system as well.


ZacksTrade App Review


Charting on the mobile platform comes with some really nice features, such as the ability to display a chart horizontally and many technical studies. We found Williams Oscillator and Negative Volume Index, among others. The maximum timeframe is five years.

The app can trade options. Multiple legs can be built simply by tapping on a bid or ask price, and a stock leg can be added, too. Strangely, direct-access routing is available for derivatives but not equities.


Level II Data

ZacksTrade Level 2 Rating

ZacksTrade offers Level II data on both American and foreign exchanges. Prices vary based on the specific data package you want. They vary from US$10 to over €100.


Extended Hours

ZacksTrade Extended Hours Rating

ZacksTrade clients can trade outside of regular session hours. The broker’s after-hours period runs from the closing bell to 8 pm, while the pre-market session starts at 4 am. There are no surcharges for trading during these times.


Financial Education and Security Research

ZacksTrade Research Rating

Security research is possible on all three trading platforms at ZacksTrade. The mobile app shows only a minimal amount of information, and we certainly don’t recommend relying on it for security research. There is a stock scanner on the mobile platform that is able to look for American and foreign companies.

The browser platform has the same ability. The software provides news and financial information on companies that have filed documents with the SEC. Streaming market data is available as well.

The desktop platform has the best research tools. Information on short interest and upcoming dividends is available, and much more. Some of the available news sources include Seeking Alpha, Motley Fool, and Morningstar. We would like to see a business TV channel added.


How Does Zacks Compare to Its Rivals?

ZacksTrade’s per-commission pricing of a penny per share is more expensive than Lightspeed Trading, who charges less than half that amount with just a $1 minimum. However, Lightspeed also charges hefty fees for its trading platforms, which Zacks doesn’t do.

Some firms, like Firstrade, have gone all the way to $0 per trade, although they don’t have the same trading tools that ZacksTrade customers get.

The software platforms Zacks uses are the same used by Interactive Brokers. Very high-volume traders will probably get better pricing there.

Several other low-cost brokers, including Firstrade and Schwab, provide some ETF’s with zero trading fees. To be competitive, ZacksTrade needs to come up with its own list.

Although ZacksTrade offers mutual funds, better resources will be found at Vanguard and TD Ameritrade.


Recommendation

It’s difficult to suggest ZacksTrade for beginners. The company does not provide a lot in terms of financial education, nor does it offer customer service around-the-clock. Its software also isn’t the most user-friendly around.

Because Zacks has a $2,500 new account deposit requirement, we do not recommend it for small investors. Many other firms nowadays such as Firstrade require nothing to open an account.

We definitely do not recommend ZacksTrade for mutual fund or ETF investors. Better lists and resources can be found at Ally Invest. If you’re interested in foreign ETF’s, ZacksTrade would probably be worth it.

We do advocate ZacksTrade for investors who place fewer than five hundred shares in a trade. With the broker’s commission schedule, trades will be cheaper than E*Trade and TD Ameritrade.

We also recommend ZacksTrade to infrequent traders at Interactive Brokers. Because IB has a $10 minimum monthly fee, these traders will spend less per year at Zacks.

Although ZacksTrade does provide a few IRA’s, we don’t recommend it for retirement saving. More IRA types are available at other brokers with better guidance on building a nest egg. ZacksTrade is designed for frequent trading, not long-term saving.


ZacksTrade Review Summary

Zacks has tried to branch out of investment research and provide a competitive platform for actual trading. It mostly succeeds, and some Interactive Brokers customers will actually get a better deal here with the same trading tools. In some areas though, such as retirement and mutual funds, the broker is a pass.


ZacksTrade Incentive to Open Account

Trade stocks, options & ETFs for as low as $1 until 2020.

Open ZacksTrade Account

ZacksTrade reviewed by TopRatedFirms.com. Rating: 4