In this review of TradeZero, we look at the broker in the view of a day trader. It offers most of everything day traders look for in a broker, including commission-free trades, direct market access, no adhering of the pattern day trader rule, and great software platforms. The only caveat is that they don’t take US clients. Is this the right day trading broker for you?
- 1 About TradeZero
- 2 Pricing
- 3 TradeZero Trading Platforms
- 4 Customer Service
- 5 Executions and Routes
- 6 Shorting Stocks
- 7 Type of Trader TradeZero is Best For
- 8 Pros…
- 9 …and Cons
- 10 Judgment
Based in the Bahamas, TradeZero offers low-cost trading, advanced software, short services, and no pattern day-trading rules. It is regulated by the Securities Commission of the Bahamas. Because of rules governing this type of brokerage firm, Bahamian and U.S. citizens cannot open a TradeZero account. Everyone else, keep reading, this broker may be worth it.
Stocks, ETF’s, and warrants that trade on the NYSE, Nasdaq, and AMEX exchanges cost 0.005¢ per share with a 99¢ minimum. OTCBB stocks above 10¢ can also be traded at this price.
TradeZero also offers free limit orders as long as the price is above $1, the order is for 200 shares or more, and there is not an immediate match. This means a buy limit order must be at least a penny below the ask; and for a sell limit order, the limit be must be at least a penny above the bid.
Derivatives cost 79¢ per contract with a 99¢ base charge. Exercises and assignments are a very steep $35.
An account can be opened with just a $500 deposit. Because TradeZero is not regulated by the SEC, there is no $25,000 requirement for day traders (TradeZero has a $1,000 requirement). There is no annual account fee, nor is there an inactivity fee.
Software and Data Fees
There are two platforms available to TradeZero clients: the website and ZeroPro, a desktop system. The web platform costs $59 per month. This fee is waived if you trade at least 80,000 shares in the month. The desktop software carries a $79 monthly charge, which is waived at 100,000 shares.
TradeZero provides anywhere from 1:1 to 6:1 intraday leverage, depending on an account’s balance. The broker requires $2,500 to qualify for 6:1. Overnight positions receive 2:1 leverage.
TradeZero Trading Platforms
TradeZero clients can use a browser-based platform with charting, Level 2 quotes, hot keys, and a watch list. Called ZeroWeb, the software also is able to display order history and real-time profit and loss figures. Besides desktop and laptop computers, the platform can be used on tablets and phones; although the broker does have an app, as we will see shortly.
ZeroWeb offers up to five watch lists at a time, and each one can contain up to 30 ticker symbols. The watchlists are updated in real-time. Charting comes with volume and technical studies.
I was impressed with the platform’s ability to operate without a mouse. Trading and toggling between windows can be performed completely with using a keyboard. Hot keys are customizable.
If you need something more powerful than the browser-based system, TradeZero offers a desktop platform called ZeroPro. Offering dynamic streaming quotes and multiple layouts, it is the broker’s flagship program.
I was impressed with the variety of order types that are available. Besides market and limit, there are limit on close, stop market, stop limit, and market on close. Also available are conditional, range, and order cancels other (OCO). All orders can be sent at the same time using a discrete window. The platform’s trading ticket sits in a separate window, which can be moved around the platform. Buy, sell, short, and cover buttons are all color-coded.
Another window displays TradeZero’s short list for the day’s trading session. These securities are shown in real-time. It’s possible to request a hard-to-borrow stock quickly on the platform.
ZeroPro has more than fifty technical studies. There are also drawing tools. What really impressed me was the ability to have up to ten chart windows open at a time.
A TradeZero mobile app can be used on Android and Apple devices. The platform offers real-time streaming data. What I thought was really impressive was the ability to link the mobile app to the Pro and Web platforms.
A watchlist can be created on the mobile app, and stocks on this list stream price data in real-time. If you trade a stock on the list, it is automatically added to a quotelist.
The trade ticket on the app allows for order routing. There are a variety of order types and duration choices. A chart is displayed above the order ticket and bid and ask prices are also shown.
TradeZero representatives are on the phone from 8 am till 5 pm, EST. There is a chat service on the broker’s website, and it is up 24/7. It seems strange that they have one service around the clock, but can’t deliver the other service at the same time. The company’s phone number has a 954 area code.
Executions and Routes
TradeZero offers direct market access. This means an order is sent directly to a specified exchange. Some of the available venues include ARCA, BATS, EDGX, and NSDQ. Only EDGX can be used for commission-free trades. TradeZero uses Vision Financial Markets as its clearing firm. Vision is based in the United States and is registered with FINRA and the SEC.
TradeZero has a short list that uses several sources of easy-to-borrow stocks. Convergex and Vision are the primary firms that provide these stocks. Hard-to-borrow equities are available for a fee. The broker imports its short list every day into ZeroPro. TradeZero promises more than 14,000 equities every day that can be shorted.
Type of Trader TradeZero is Best For
TradeZero would be an excellent pick if you want to day trade, but don’t have $25,000 to deposit. The broker’s commission schedule would also be excellent if you can handle at least 200 shares per trade using limit orders. The broker is named Zero for a reason.
- High-volume traders get the broker’s software for free.
- No routing fees.
- Extended-hours trading is available.
- TradeZero is not regulated by the SEC or by FINRA. Furthermore, there is no SIPC insurance; although the broker has coverage through a Bahamian financial institution.
- An account cannot be funded via ACH.
Using a broker-dealer based in the Bahamas carries certain hazards that you should be aware of before opening an account. Day traders with shallow pockets might find TradeZero worth it.