- Commissions and Fees
- Trading Platforms
- Mobile Platforms
- Research Tools
- Customer Service
ZacksTrade is a discount broker run by the team behind Zacks.com. ZacksTrade offers a variety of compelling tool. The question is – how do they compare to other prominent brokers in the space?
If you’ve been using Zacks for your security research, you already know about this investment guru. Zacks was founded by Len Zacks in 1978 is known as a respected source for stock research and analysis, similar to The Motley Fool and Investors Business Daily. The people behind Zacks Research have recently launched an online discount broker called ZacksTrade. Let’s take a look under the hood.
At ZacksTrade, equity trades are 1¢ each, with a $3 minimum. Stocks below $1 cost 1% of principal. Penny stocks also have the $3 minimum. The broker-dealer doesn’t charge anything extra to use a live representative over the phone to place an order, and this is very rare in the brokerage world.
ZacksTrade has an unusual commission schedule for options. The first contract in a trade is $3, and each additional derivative is 75¢. Amazingly, there is no charge at all for assignments or exercises.
An investment account at ZacksTrade carries no on-going fees, such as annual or low-balance charges. There is a $2,500 deposit requirement to open an account, which of course would be no problem for day traders.
What feature I found very appealing about ZacksTrade is that the broker-dealer charges nothing to use its platforms, including its very robust desktop system. There are fees for data, however.
ZacksTrade Trading Platforms
The ZacksTrade website is used for account management. It does not have any trading capability, and this is a weakness compared to many other discount brokers.
What Zacks does offer is a browser-based platform called ZacksTrader. When I logged into my test account, the first thing I noticed was how simple the charting software is. It does not have any drawing tools or technical indicators; and there are only three graph styles.
In the top section of ZacksTrader sits a variety of tools. For example, there is an option chains tab, a stock screener, and a mutual fund search tool. A tab called Market Pulse displays the performance of various investments around the world.
At the bottom of the screen sits the program’s trade ticket. I found this to be much more advanced than the tools in the top section. I was able to place trades for options, stocks, bonds, and mutual funds. What I really liked was the ability to trade multi-leg option strategies.
Although ZacksTrader’s simplicity left me rather unimpressed, the broker’s desktop software delivered much more. Called ZacksTrade Pro, it is actually the same program that Interactive Brokers uses for its desktop platform Trader Workstation.
When I was taking the platform for a test drive, I was disappointed that I couldn’t move the tiled windows around. But then I found an icon to unlock them (it’s in the upper-right corner). The platform is very customizable, although this makes the software’s learning curve quite a bit steeper than the browser system.
The order ticket has color-coded buy and sell choices. There are several order types, including trailing, stop, and on-close.
What I liked most about this platform was its charting capability. While the browser platform failed to deliver in this area, the desktop software is very advanced. I found a large variety of drawing tools and technical studies. A chart can be detached into its own window and shown full screen.
Both ZacksTrader and ZacksTrade Pro offer simulated trading environments, a nice feature if you want to practice the programs before committing real money.
For busy traders, ZacksTrade offers a handy mobile platform that functions on Apple and Android devices. There’s also a less useful platform for Apple Watch. The phone and tablet system offers basic charting, trade data, and an order ticket with many choices, such as time in force and order type.
ZacksTrade Research Tools
Research is possible on all three platforms. As expected, the mobile app has the most limited functionality. Information such as average volume and the day’s range are shown.
ZacksTrader has a stock scanner that can search a specific exchange (including OTC and foreign venues) for a variety of parameters. These include top % gainers and most active. A list of stocks is returned, but there’s not much information on them.
I was much more impressed with the desktop platform’s research tools. There’s a bond scanner, Level II quotes, option chains with a strategy builder, a volatility lab, and other powerful tools.
ZacksTrade Customer Service
ZacksTrade only offers customer support from 9:00 am until 6:00 pm, EST, during the week. There are no weekend hours, and the broker-dealer is closed on the weekend. What I did like was the on-line chat feature that appears on the ZacksTrade website during the weekday.
Executions and Routes
Both the browser and desktop platforms offer direct-access routing. SMART is the default choice, but this can be changed to ARCA, NYSE, IEX, VWAP, BEX, and several others.
The desktop platform has a ‘Check Margin’ feature. It shows the initial and maintenance margin requirements for any ticker entered. ZacksTrade Pro also states on the order ticket of a stock if it is shortable or not. ZacksTrade does not issue margin calls, so a position can be liquidated without warning.
Who is ZacksTrade Best For?
Equity traders who place a lot of orders of less than 500 shares will benefit from the brokerage firm’s commission schedule and technology. Option traders who exercise frequently or expect assignments will also find a good home here.
ZacksTrade isn’t the best broker in the world for day traders. It doesn’t specialize in this type of trading, but it does offer a good desktop platform and a per-share commission schedule. If you want access to global markets, it may be worth trying.
It’s hard to see exactly where ZacksTrade stands out in this industry. For traders who prefer discount brokers, ETRADE and Ameritrade are still better fits. Highly active traders will likely prefer direct access brokers like SpeedTrader and Cobra Trading.
- Good pricing on bonds.
- Foreign stock exchanges are available.
- Good commission schedule for equity trades under 500 shares.
- Although ZacksTrade offers trading in mutual funds, the broker does not disclose how many funds are available, and every transaction costs $27.50.
- No cash management features.
- No commission-free ETF’s.