TradeZero Review
  • Commissions
  • Trading Platforms
  • Education and Research
  • Execution and Routes
  • Customer Service
  • Short Lists
4.2

Summary

TradeZero has quickly made a name for itself as a broker that offers free commissions and allows day traders to bypass the PDT rule. The company offers advanced trading platforms, great short lists, and unbeatable pricing. Read this review to see if TradeZero is a good fit for your trading style.

 About TradeZero

Tradezero.co is an online discount broker based out of Nassau, Bahamas. They are registered with the Securities Commission of the Bahamas. Since they are located outside of jurisdiction of the United States and the U.S. Securities and Exchange Commission, the $25,000 PDT rule doesn’t apply for their customers. However, they don’t accept accounts from the United States of America. The minimum to open an account is $500 USD.

Commissions and Fees

Stock Commissions

TradeZero is known for offering free trades whilst still catering to active traders (whereas brokers like Robinhood are intended for casual traders or investors).

Free trades only apply to limit-orders for stocks on NYSE, AMEX or NASDAQ exchanges greater than $1, for a minimum of 200 shares and “unmatched” immediately. The unmatched basically means the trader must provide liquidity buy 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 $0.005 per share commission + ECN pass-thru fees. The pass-thru fees vary depending on the ECN.

Options Commissions

Options trades cost $0.99 base and $0.79 per contract plus pass-thru fees.

Pass-thru fees are of $0.04 per contract through OCC and $0.05 per contract through ORF. Options exercise/assignments are charged $35.

All stock and options trades, with the exception of qualifying free trades, have a $1.99 minimum commission.

Software Fees

Tradezero offers 3 platforms. The Web platform costs $59 per month with level 2 quotes, which is waved with over 80,000 shares in monthly volume. The Pro platform costs $79 per month with level 2 quotes, which is waived with monthly trading volume over 100,000 shares. OTC markets data is an addition $5 for level 1 and $15 for level 2 data for non-professionals.The Mobile app platform is basically a free add-on for traders with an active Tradezero Web or Pro user ID.

TradeZero Software Pricing

Margin/Leverage

Another benefit of offshore brokers is the leverage they offer. 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 $1,000 are cash accounts with no margin. Accounts up to $4,999 receive 4 to 1 leverage. Accounts over $5,000 receive 6 to 1 leverage. Therefore a $6,000 account would be able to trade $24,000 work of equities. Margin interest is 8% annually.

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.

TradeZero Short Locates

Platform Features and Tools:

Platform Options

There are two main trading platforms and the Mobil app. Despite being an offshort broker, the trading software is exceptionally stable and seamless. This is a modified verzion of Turbotrade software augmented with much more functionality and customized additions.

The ZeroWeb platform is browser-based dynamic platform that offers customizable layouts, level 2 and time and sales screens with 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 platform is stable.

TradeZero Level 2

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 and options trading.

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.

Mobile Trading Platform

Research Tools

Tradezero is a trader’s platform suited for technical traders. It doesn’t offer much by 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 access platform without the research bells and whistles found with more popular discount online brokers.

Top Stocks List

Customer Service

Customer service is 24/7 via chat. The e-mail response is quick but the chat service is the best for traders. They also offer free demos of both their 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 hot keys. Seasoned 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 hot-keys and using them routinely. To an outsider or newbie, it may seem redundant to set-up a hot key to cancel all open orders when you can just click a button with the mouse. However, it’s not just the difference in speed, perhaps 1-2 seconds, but the mindset.

TradeZero Hot Keys

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 hot-key press takes very little thinking and enables you to keep focused on other tasks.

What Type of Trader is it Best For?

Tradezero.co doesn’t accept accounts from the United States. There is risk involved with having money in offshore brokers. This type of 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. US 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
  • Free trades for providing liquidity reinforce a good habit to practice
  • Mobile app adds to portability
  • Competitive commission and solid platforms

Cons

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

Twitter Buzz

https://twitter.com/siwbp/status/889520080983400448