Did somebody say commission-free trading? I know. Normally when people say something is commission-free, it normally screams ‘scam’ or that the service is not going to be that great. This is where TradeZero comes into play.
Yes. It offers commission-free trading. No. It is not terrible. In fact, it may be one of my favorite trading platforms in recent years.
Americans need to look elsewhere
Before you read the rest of this review, it is important to point out that TradeZero is not a website for American citizens. In fact, if you have residency in the United States, you are not allowed to sign up at all. This is because TradeZero is located within the Bahamas. It is not registered in the United States.
This does help to keep the cost of the trading platform down, but it also means that many people are not able to register themselves on it.
Don’t worry, everything about TradeZero is above board. They are registered in the Bahamas with the Securities Commission. This means that there is someone who has oversight of them.
At the same time, it means that they can offer a little bit cheaper prices as they are not stuck listening to the incredibly restrictive rules that the US has in place that in turn make it painfully difficult to work as a trade broker.
Not bound to the $25,000 rule
One of the biggest benefits of TradeZero being based in the Bahamas as opposed to the US is the fact that they are not bound to the prohibitive $25,000 PDT rule. You can start trading on TradeZero with as little as $500.
I know that to some of you the $500 is still going to sound like a high amount, but let’s be honest, if you are trading and you do not have at least $500 to trade with, then it is not right for you. It will take you an age to see a return on that investment.
Not exactly ‘free trades’
One of the marketing ‘tactics’ for TradeZero is that they claim to offer free trades. I guess to an extent they do, however it is rather limited in what it can and can’t do.
Free trades will apply to limit-orders for stocks only on the following markets:
You must be working with a minimum of 200 shares with a minimum price of $1. Now, here is the kicker. If you want the trade to be free then it needs to be unmatched. If a match is found within one second, you won’t get a free trade.
This means that the free trades thing is not exactly true. I can barely think of a situation where you are going to have a trade unmatched for more than one second. Sure, it is a nice thing to think it could happen, but it probably won’t. Alas, it is a decent marketing trick that TradeZero have up their sleeves.
Trades are still affordable
Don’t worry. Even though you probably will end up needing to pay for your trades, the price is not that high. The commission is fixed at just $0.005 per share with a flat fee of $0.99 on all trades under 200 shares.
This makes TradeZero one of the cheaper platforms out there. As I mentioned, there are some benefits to operating out of the Bahamas!
Options pricing is a little bit different. There is a base of $0.99 and $0.79 per contract. Still affordable, and still one of the cheaper platforms around by a long shot.
Why are the trades on TradeZero so affordable?
Because of the way they operate.
Without getting too technical, because I am not 100% sure about how trading networks operate (I am just a trader, nothing more!), TradeZero gains rebates on the orders on unmatched trades that they send through their network.
This means they are making money on unmatched trades, even if you are not being charged by them. It is a good system, and it is going to help you save a lot of money in the long run.
TradeZero offers decent leverage on their accounts. This is:
- 6:1 Margin on accounts valued at over $2500
- 4:1 Margin on accounts valued between $501 and $2499
- 1:1 Margin on accounts valued under $500
It is worth noting that you can have a maximum of 2:1 leverage on overnight trades. Other than this, TradeZero does have one of the highest leverage I have seen (seems to be a common theme from TradeZero. They bring a lot to the table)
Who is TradeZero for?
Before I start diving into how TradeZero actually works, I do want to point out that TradeZero is not for everybody.
I would say that TradeZero is going to be fantastic for amateur traders only if you have other research sources that you use. This is because TradeZero is purely a trading platform. It is full of charts and other bits and pieces like that, but you can’t use it as a research center. It is for buying and selling shares/options.
Thankfully, the majority of amateur traders out there will know just how important it is to research potential trades in a variety of places, so this should not be that much of an issue.
I guess this is another reason as to how TradeZero are able to keep the price of their services so low. They do not need to invest tons and tons of cash in having loads of information available through their platform.
I feel that more experienced traders will also be able to get some value out of TradeZero. Sure, you probably already have a platform that you use regularly, but it is always nice to try out something new…particularly when the fees are so low.
If you are an experienced trader, then I am sure that you have $500 handy that you will be able to use to check out a new platform too. I have seen a lot of experienced traders switch over to TradeZero, and I reckon that you are going to be in the same boat once you have checked them out a little bit.
You should not be using TradeZero if you are a fan of trading stocks that are of an exceedingly low value (i.e. those who are more interested in penny stocks). This is because no stocks below $0.10 in value will be offered for trade on this site.
If you are above the $25,000 mark, then you may want to look into one of the other trading platforms out there as well. TradeZero is more for those who want to invest but do not wish to conform to the $25,000 PDT rule.
The TradeZero Platform
The main reason people are going to be trading with TradeZero (other than the incredibly low prices) is the trading platform itself.
I have dealt with a lot of offshore trading companies in the past. There has been one common thing about them – they are terrible. Like, seriously abysmal.
They feel that because they have lower fees, it means that they are under no obligation to offer something which actually works for the people that are trading with them. They think that people are fine with slow platforms that contain barely any information or customization. It is ridiculous.
I am willing to pay extra money to have something that functions properly. After all, a lot of trades that people make need to be made there and then. Nobody really has the time to make five or six clicks to complete one trade.
I am pleased to say that TradeZero nips the idea of offshore trading platforms being terrible in the bud. They have put a lot of effort into their trading platform, and while improvements can be made (and they will be made), it is easily one of the best trading platforms.
Even the most experienced traders will feel that they are getting value for money.
A lot of the money made by TradeZero is through their trading platform. There are multiple options, each comes complete with several different features (I will discuss these in the following sections).
- ZeroPro is $79 a month, but free if you make more than 100,000 trades.
- ZeroWeb is $59 a month, but free if you make more than 80,000 trades
- ZeroFree is just as the name suggests
- ZeroMobile is the mobile trading platform and comes included with the other three options. The features on this are ‘fixed’. You do not get anything extra by paying for one of the paid services.
This is the option that, no doubt, most people are going to go for. This is because, even though it is fully-featured, it still a whole lot cheaper than most competing platforms out there. If you are a frequent trader, then you will probably be making 100,000 trades a month anyway, which means it is going to be free (even more money saved!)
With this option, you get six Level 2 windows, 10 windows for charts, direct access to markets, stock screener, options trading, alerts, top lists, and the ability to customize your layout to suit your needs.
Basically, you get everything that some of the larger platforms offer you, but you will barely be paying anything near the same amount that they charge.
Honestly, I can’t imagine that many people are going to be paying for ZeroWeb. It is $20 a month less than ZeroPro, but you are going to be losing a lot of features.
For example, you will be kissing goodbye to:
- Stock alerts
- Options trading
- Top lists
It is actually the last one that baffles me when it comes to the loss of features. If you are paying for a service, you would expect access to what is one of the most basic of research tools. Sure, there are plenty of places online where you can find top lists for free, but why is it not included in a paid service?
I have a feeling that this is more down to the fact that TradeZero want you to upgrade to Pro.
As I said, I can’t imagine there are many people out there who will go for the ZeroWeb option. It is just too expensive for what you get.
Surprisingly, there is a lot of functionality in ZeroFree. Yes. You are going to lose access to the ability to customize your layout, as well as your Level 2 windows (you can pay to have these each month, if you wish. It is $25), but it is still a fully functioning free trading platform.
However, do bear in mind that the real time trading updates are going to be a bit less functional than in the paid versions. You should be able to get most of your trades through it, though.
If you are looking to take trading seriously, then ZeroFree is probably not going to be for you. It is not ‘functional’ enough for making hundreds of trades per day. However, it is decent enough to get to grips with the system.
I also feel as if it will come in handy for those who want to take a break from trading for a while but do not wish to withdraw funds from their account.
There are a lot of online trading platforms that charge you simply to have an account with them, which makes pausing your trading a drag. So, I am pleased to see that TradeZero allows you to both upgrade and downgrade your account on a whim.
This is the mobile platform. You get no top lists, no matter what membership you have. The only thing that is dictated by your membership is the real time figures you are given. Everything else is set in stone.
This means that if you are going to be doing your trading mostly through your mobile device, I can’t really see why you would ever want to pay for one of the plans.
ZeroMobile is available on both Android and iOS.
Functionality is fantastic
As I said before, the functionality of TradeZero is fantastic. It looks good. It is easy to get around. You can tell that the company has invested a lot of money in making it both look and feel great to use.
If you have one of the paid memberships, you will love the customizable hot key function. Once you have it all set up, you are going to be darting around TradeZero and making your trades like there is no tomorrow. It isn’t going to save you that much time while using a mouse, but when you are trading, every single second counts!
You can do a lot with these hot keys too. For example, you can set up a hot key to cancel all open orders, or something like that. It is small things like this which make TradeZero better.
As I mentioned previously, this is nothing more than a trading platform. Other than the top lists which you get with your Pro membership and your charts, you do not get a whole lot of information to play about with while doing your research.
This actually helps to ensure that the platform never feels too cluttered. It makes things a bit easier to read, and makes your decisions much easier as well.
To cap it all off, this is a remarkably fast platform. There seems to be no lag in whatever you are doing. Provided that you have a decent internet connection, this is going to be one of the fastest platforms you can use.
It is clear that TradeZero is constantly investing in it too. I always notice little improvements here and there when I sign into my account. However, none of them have ever been drastic enough that I would have had to relearn the entire platform…and I really love this.
You are only able to fund your TradeZero account with a bank transfer. This will incur fees both into and out of your TradeZero account. It is currently set to $30 in and $75 out. These fees are remarkably high, in my opinion. If you are a low rolling trader, then the costs to withdraw money from your account are going to be quite prohibitive.
However, it is a flat fee, so as soon as you start to have a decent income from your trades and are withdrawing thousands of dollars at a time it is not that much of an issue. The withdrawals do seem to be pretty fast, though.
It is, however, worth pointing out that you can’t use a third party service to transfer money to your TradeZero account. This means that there may be additional fees that need to be paid with your own bank.
So, for example, if you are located in the United Kingdom you will need to pay whatever your bank charges you for foreign transactions. This just adds even more money onto the cost. Basically, TradeZero will not allow you to deposit cash unless it is coming from your own bank account.
I guess these issues would be rectified a little bit if they accepted card payments, or even PayPal, but I doubt that this is something which is going to happen any time soon, mostly due to some restrictions on the part of the Bahamas Securities Commission.
Even though you probably will never be able to benefit from the free trades offered by TradeZero, I wouldn’t dismiss the platform. It is still incredibly cheap, and yet you also get an amazing service for this price.
You get a company that allows you to open up an account for as little as $500 and still get access to the American markets. You get a company that has actually spent a decent sum of cash on their service to make it easier for you to trade.
Honestly, whether you are an amateur or a pro trader, I think that you will get something out of TradeZero. Sure, you will probably need to have an account elsewhere if you want to make the best trades. You need to do research after all. However, once you get to grips with how the TradeZero platform works, it is simple to make your trades. You can do them in seconds.
I would even go as far as to say that TradeZero is better than 99% of the more expensive platforms available.
It is not all sweetness when it comes to TradeZero. There are still a few kinks that they need to work out to go from a ‘great’ platform to an ‘awesome’ one. However, since they are a fairly new company in the grand scheme of things, I am willing to give them a ‘free pass’ on some of the issues for now.
I think the biggest issue, and one that many people have commented on, is the fact that the customer support team at TradeZero are not the best in the world. They don’t seem to be ‘up to date’ on everything about the platform. They can also be quite slow to answer any messages they get.
Granted, it is not the worst thing in the world, and after a little bit of training they are going to be better at what they do. However, I fear that for a while, TradeZero may not have the cash to spare to keep their customer support team up to date on training.
The account funding is also a bit of an issue, and I have spoken about that already. However, I can see why TradeZero do it. It is just a shame.
Check Out TradeZero today
Why not check out TradeZero today? With such low prices, you can’t really go wrong. I highly recommended it.
If you are still to be convinced, there is a ‘free demo’ of their trading platform, which I urge you to check out. It may be just this little thing you need to convince yourself to take the plunge and just go for a TradeZero account today.
It is a platform that I can see myself using for a long, long time to come.