TradeZero offered commission-free trading a long time before TD Ameritrade, Charles Schwab and E-Trade did in October 2019. Are they still worth it when you compare them against those major brokerages now?
That's precisely the point we are going to evaluate in this TradeZero Review. If you are right at the beginning of becoming a trader, then you need the best online broker for day trading right from the beginning.
Keep in mind that there is TradeZero and TradeZero USA. TradeZero America Inc. is located in 68 34th Street Suite 513B, Box 47, Brooklyn, NY. 11232 while TradeZero is located in 204 Church Street, SandyPort West Bay Street, Nassau, Bahamas 00000.
Thats mainly due to differing local restrictions and regulations. But as I will point out in this TradeZero review, the location is not the only differentiator between both.
Trading Platforms and Tools
TradeZero provides a free mobile app and web-based platform. However, the most interesting one is ZeroPro, and it costs $59 each month. At times when the major brokerages haven't had their zero commissions strategy effective, the $59 was not an issue.
But now it is. E-Trade and TD Ameritrade, for example, have one of the best trading platforms worldwide. And those platforms are for free, and Level 2 data is their included as well.
And even if $59 doesn't sound that much at first, it is $708 per year. Let's say you start with $10,000 in your account; then, you have to generate a return of ~7% just to make back the platform costs. So, the former unique selling proposition doesn't exist any longer.
The ZeroPro platform offers dynamic streaming quotes, charting and level II trading information. The windows are all customizable and you can save multiple layouts. This is a highly advanced trading platform that is extraordinarily customizable.
If you are an active trader, this is probably where you would find the most functionality. ZeroPro also offers as many as six windows of level II information, and 10 windows of charting with indicators.
Real-time news, stock screener, options trading, and alerts are all possible. ZeroPro isn't free though, it costs $59 a month. If you are looking to make massive amounts of trades and rely heavily on technical analysis, you will like this platform a lot.
ZeroWeb is precisely what it sounds like, an online and web-based platform. This trading platform features many of the same benefits of the ZeroPro platform, except there are only six windows for charting, and for windows of level II information.
You do not have the ability to set alerts or trade options in this version, and there is no stock screener. However, you can access it anywhere there is an Internet connection and a browser available.
ZeroWeb access is included in your $59/month fee that also enables you to use ZeroPro. Both, ZeroPro and ZeroWeb have Level 2 included.
ZeroFree is what you would expect free. However, there is no free level II Windows, but you can add them on four $25 per month. You can have two charts with indicators, you receive real-time news, but do not have the ability to trade options without paying an extra $25 per month. It also does not offer custom layouts.
However, if you are looking for more of an investment scenario instead of frequent trading during the day, this platform is more than robust enough. Like with Investment Apps from Robinhood and Webull, trading for free is not really trading for free.
Also, you should be aware of the fact that options trading access costs another $25/month when using ZeroFree. And if you do the math - with $25 for Level 2 plus $25 for options trading, you are pretty close to the monthly fee of $59 for ZeroPro+ZeroWeb.
So if you are serious about day trading, then ZeroFree is not for you.
ZeroMobile should be thought of more as an add-on to your other platforms, as it gives you the ability to keep an eye on your trading positions while on the go. But it also gives you the option to monitor real-time level I quotes, as well as real-time news.
Charting with indicators is included, but it's only one window as you would expect on a small screen. In general, think of this as a way to monitor your financial concerns while away from the desk. It should be pointed out that this platform is included with all other platforms, and of course is free as a benefit for TradeZero customers.
|Price per Month||$59/month||$0||$0|
|Level 2 Data||Yes||$25/month||no|
TradeZero specializes in US stock markets, allowing access to the New York Stock Exchange, American Stock Exchange, and the NASDAQ. They also offer "Pink Sheets" as well. This allows traders to buy Stock, ETF, and Warrants. Beyond that, they also offer options on these products, so this is most certainly geared for those looking for exposure to the US markets in general.
With that being said, what TradeZero offers is cheap access to the markets and gives the trader the ability to save quite a bit on commissions.
All accounts are the same with the exception of leverage. As a general rule, the more you have in your account, the higher the leverage that you are able to trade with, up to 6 to 1 if you have more than $2,500. Be advised that Bahamian and American citizens cannot open an account at the main firm, but there is another branch of the firm known as TradeZero USA.
Commissions and fees
The commission structure is one of the most appealing parts of the brokerage. But only for people living in the United States. Why? Because of TradeZero USA allows commission-free trading for all stocks listed at NYSE, AMEX, and NASDAQ with a price of at least $1 and for both - market and limit orders.
But traders who live outside the United States are forced to open the account in the Bahamas. And with those accounts, only limit orders are free. And those limit orders must have a minimum share size of 200 shares. Otherwise, international trades have to pay commissions.
So, for international traders, we have some kind of downside here since free is not really free. There is also a big difference for paid orders like for OTCBB and PINK Sheets etc. depending on your residence. Anyway, there is also one upside for people outside the United States.
They are allowed to day trade with less than $25,000 while people living in the US are not permitted to day trade with < $25,000 due to the pattern day trader rule. Stocks trading under $1.00 on the NYSE, AMEX, or NASDAQ during the grace period are also charged at $0.002 per share with TradeZero America and at $0.005 with TradeZero.
Beyond that, there are the usual fees charged according to regulations and the like, all of which are out of the broker's hands. Options trades are free as well, with small regulatory fees per contract with TradeZero America and $0.99 base + $0.79/contract for TradeZero outside the U.S.
An option exercise or assignment does cost $35 though for anyone. What to know about free trades? You can find the explanation video here:
TradeZero vs SureTrader
Being located in the United States makes it impossible to day trade with less than $25,000 at both brokerages - TradeZero and SureTrader due to regulations. When it purely comes to trading commissions, then TradeZero vs SureTrader goes for TradeZero, since SureTrader costs $0.005/share and $1.95 minimum.
However, if you have more than $25,000 to day trade, then E-Trade, TD Ameritrade and Charles Schwab are great options now since they also offer commission-free trading.
Education and research
This is probably the weakest link when it comes to this broker. There simply is no education or research available, but they do mention that they have partnerships with other companies that can help.
At this point, though, there is so much free education and research online that it won't necessarily be a major deterrence for opening account. This isn't what TradeZero is, a full-service shop. They are about the execution of trades for those who already know what they want.
If you are looking for a brokerage firm that offers a lot of education and research, you will probably need to keep looking. Though, there is so much in the way of good free analysis online these days. Also, you should keep in mind that there are top-notch analysts out there that sell subscriptions that most professional traders prefer anyway.
TradeZero offers the usual customer service, with phone service available during market hours of operation, meaning 9 AM to 5 PM Eastern Standard Time. The phone number is 1-877-4-TRADE-0 for the New York office. The Bahamian office in Nassau can be reached at 1-954-944-3885.
They also keep the same hours. Beyond that, there is the availability of email support, and of course online chat. Again though, this is not a full-service brokerage, so one should expect help with execution more than anything else.
If there is a technical issue, they can be easily reached during market hours. Outside of market hours, you will not find much in the way of customer service. That's one of the trade-offs of a "bare-bones" brokerage house.
Excellent customer service is something you typically pay for through commissions. TradeZero is adamant about getting back to their traders the next business day when issues arise overnight.
TradeZero Review Summary
Trade Zero is one of the zero-commission innovators who caused an impact on the brokerage industry landscape. These days, other brokerages also offer commission-free trading.
Clearly, TradeZero isn't going to be the first place that day trading beginners run to. However, if you are looking for zero commissions for the types of trading mentioned, then that's obviously the big appeal. However, you have to understand when you get them for free.
It's only if you provide liquidity and do not execute your trade immediately. That can become a huge problem if you are day trader.
I recommend reading my Cobra Trading review to learn what a great day trading broker is really all about, and consider reading the SureTrader review to see what can happen if you chose a offshore broker.
TradeZero Review Questions and Answers
Can U.S. Citizens Use Tradezero?
TradeZero offers two different brokerage services. Their main site is for international clients at tradezero.co. Due to SEC regulations (in terms of the PDT rule), the TradeZero site for U.S. citizens is a bit different and accessible via us.tradezero.co. If you are U.S. citizen, you cannot trade with less than $25,000 at TradeZero.
Does TradeZero Have PDT?
TradeZero has a PDT rule for their clients. U.S. residents need at least $25,000 in their account for day trading, while TradeZero's international clients can day trade with any account size. However, only U.S. citizens have zero commissions, while international clients have to pay higher commissions.
How Do I Fund My Tradezero Account?
Funding of new accounts can be made through bank wire transfers only. PayPal, debit or credit card funding is not available right now. It is imperative that the name on the bank account sending the money is the same on the receiving account. Third parties cannot fund the TradeZero account.