TradeZero Review – Free Trading and No PDT Rule

About TradeZero

Tradezero.co is an online discount broker based out of Nassau, Bahamas. They are registered with the Securities Commission of the Bahamas.

TradeZero offers two platforms: one for non-US customers (TradeZero) and one for US customers (TradeZero America). TradeZero America is registered with FINRA (the Financial Industry Regulatory Authority) while TradeZero is not. Our TradeZero review will focus on the international brokerage firm.

The non-US platform is outside of the jurisdiction of the United States and the U.S. Securities and Exchange Commission, so the $25,000 PDT rule doesn’t apply. The minimum deposit to open an TradeZero account is $500 USD.

Commissions and Fees

Stock Commissions

TradeZero is known for offering commission-free trading while still catering to active traders (whereas brokers like Robinhood and Webull are intended for casual traders or investors).

Free trades only apply to limit-orders for stocks and exchange traded funds (ETFs) on the New York Stock Exchange, NASDAQ exchange, or AMEX exchange. You must buy a minimum of 200 shares at greater than $1 per share and orders must be “unmatched” immediately. Unmatched basically means the trader must provide liquidity by selling/shorting on the inside ask/offer or buying/covering on the inside bid.

Market orders and limit orders that take liquidity (buying on the ask and selling on the bid) are charged a flat fee of $0.99 up to 200 shares. After that, TradeZero charges $0.005 per share commission + ECN pass-thru fees. The pass-thru fees vary depending on the ECN.

Options Commissions

Options trades cost $0.59 per contract plus pass-thru fees.

Pass-thru fees are $0.055 per contract through OCC and $0.0388 per contract through ORF. Options exercise/assignments are charged $35.

Software Fees

TradeZero offers four trading platforms. The ZeroPro and ZeroWeb day trading platforms each cost $59 per month with level 2 quotes. ZeroPro includes a stock screener, options trading, and alerts, while ZeroWeb does not. OTC markets data is an additional $5 for level 1 and $15 for level 2 data for retail investor accounts.

ZeroFree is a free web-based trading platform that built for beginner traders. It only offers one trading window (each additional costs $25 per month) and you can only have two chart windows. Options trading with ZeroFree costs $25 per month.

The Mobile app platform is basically a free add-on for traders. It’s available with any other TradeZero software.

You must keep a minimum account balance of $250, or else you’ll lose access to your trading platform.

Account Fees

TradeZero doesn’t charge an inactivity fee. There’s a $25 deposit fee that’s waived if you deposit $500 or more.

Margin/Leverage

Another benefit of using an offshore brokerage account is the leverage it offers for stock trading. Leverage is a double-edged sword, which can blow out accounts quicker, so be warned. They apply margin leverage based on account size. Accounts up to $500 are cash accounts without margin trading. Accounts up to $2,499 receive 4 to 1 leverage. Accounts over $2,500 receive 6 to 1 leverage. Therefore a $6,000 account would be able to trade $36,000 work of equities. Margin interest is 8% annually; however rates are subject to change and generally fluctuate with federal interest rates.

Borrows and Locates

Offshore brokers tend to have better borrows and locates since they circumvent SEC regulations. On average, you can expect to pay anywhere from $0.023 to $0.03 on hard to borrow shorts intra-day. Tradezero has short-seller access to 14,000 symbols. This is a short-seller’s dream. Hard to borrow overnight shorts are 7x per share cost the first night and 1x every night thereafter.

Platform Features and Tools:

Platform Options

TradeZero has a desktop day trading platform (ZeroPro), two main online trading platforms (ZeroWeb and ZeroFree), and a mobile app. Despite being from an offshore brokerage firm, TradeZero’s trading software is exceptionally stable and seamless. This is a modified version of Turbotrade software augmented with much more functionality and customized additions to help you day trade stocks.

The ZeroWeb platform is a browser-based dynamic platform that offers customizable layouts, level 2, and time and sales screens. TradeZero trading tools include point-and-click order routing, hot-keys, watch lists, and decent charting from any desktop or tablet with an internet connection. The data streams seamlessly, and the platform is stable.

The ZeroPro platform is a stand-alone program that offers even more depth and control. This platform has advanced charting, direct order routing with short-locate request buttons, conditional orders, high/low ticker, top-lists (volume, $/% change, gaps), newsfeeds, a stock screener, and options trading.

The ZeroFree platform is essentially a barebones version of ZeroWeb. You’re limited to one trading window and two charting windows. Options trading is available only if you pay an additional $25 monthly fee, which is the same cost as for the ZeroPro platform.

Mobile Trading

This is an add-on app that allows traders to place trades and monitor positions away from the desktop. The app is smooth, with no real issues. I use this just to monitor and close out positions for the most part.

Research Tools

TradeZero is a day trading platform suited for technical traders. It doesn’t offer much fundamental-based research. The Top Lists and Hot Lists are plenty to find intra-day stocks with good action and tradeability. The advanced charting has all the basic price and momentum indicators. The watch lists are efficient with alarms enabled. This is a frugal direct market access platform without the research bells and whistles found with more popular discount online brokers.

Customer Service

TradeZero customers can access customer service via 24/7 online chat and email. The e-mail response is quick, but the chat service is the best for traders. TradeZero support also offers free demos of the ZeroPro and ZeroWeb platforms, which is very useful for newbies and newcomers to the platform to get acclimated.

Execution and Routes

The routing on free trades is placed through EDGX. Direct routing to ARCA, ISLD, EDGX, and various other ECNs are available. The fills are robust and quick. TradeZero actually clears some orders through an American clearing firm.

Hot Keys

One of my favorite features is the customizable hotkeys. Seasoned day traders know well the split-second advantage of having a single key to cancel all orders or to place a static order. Every user should get familiarized with setting up hotkeys and using them routinely. To an outsider or newbie, it may seem redundant to set-up a hotkey to cancel all open orders when you can just click a button with the mouse. However, it’s not only the difference in speed, perhaps 1-2 seconds, but the mindset.

Monitoring several screens of charts and streaming level 2 windows while keeping track of open orders and positions is daunting enough. Having to click to cancel all open orders takes many mental steps to complete, but a simple hotkey press takes very little thinking and enables you to keep focused on other tasks.

What Type of Trader is TradeZero Best For?

TradeZero.co doesn’t accept accounts from the United States (for US traders, there’s TradeZero America). There is risk involved with having money in offshore brokers. This type of online broker is best for non-U.S.-based intermediate to experienced traders that fall under the $25,000 PDT rule and have risk capital to place overseas. Seasoned short-sellers especially will love the short locates through the ZeroPro platform. TradeZero fees are very competitive and you can trade for free as long as you create liquidity. U.S. traders may prefer ETRADE as a discount broker or Interactive Brokers for more active trading tools.

Pros

• Amazing short-sell locates and borrow list
• 6-to-1 leverage with a margin account
• Commission-free trades for providing liquidity reinforce a good habit to practice
• Mobile app adds to portability
• Competitive trading fees and solid platforms
• Helpful customer support

Cons

• Offshore brokers don’t provide tax forms
• Overnight hard to borrow shorts can be expensive