Daily Note: Zecco vs TradeKing - Online Stock Trading Comparison

Wednesday, March 11, 2009

Zecco vs TradeKing - Online Stock Trading Comparison

Zecco vs Tradeking was not even a fair comparison before Zecco increased their minimum requirements for free trades recently. However, now that Zecco decided to compete more in the paid trading arena, it’s finally appropriate to write a Zecco vs Tradeking comparison.

Doesn’t Zecco Trading Offer Free Trades?

zecco Zecco Trading still offers free trades but you only get 10 per month now. Additionally, you need to quality for it by either:

having a $25,000 minimum balance in your account
execute at least 25 trades a month

So if you don’t fall into either (and most people don’t), then Zecco and TradeKing is remarkably similar.

Zecco vs TradeKing Trading Commissions (as of Mar, 2009)

Assuming you don’t quality for the 10 free trades, the commissions are as follows:

Equity Trades

Zecco - $4.50 vs TradeKing - $4.95

Options Trades

Zecco - $4.50 + $0.50 per contract vs TradeKing - $4.95 + $0.65 per contract

Broker Assisted Trades

Zecco - $19.99 vs TradeKing - $4.95

Margin Rates

Zecco -$0 - $49,999 (7.20%), $50,000 - $499,999 (6.70%), $500,000+ (4.70%)

TradeKing - $0 - $49,999 (6.50%), $50,000 - $249,999 (5.50%), $250,000+ (4.50%)

Thoughts on the Rates

Looks like Zecco still wins on rates even if you don’t qualify for free trades by $0.45 per trade and $0.15 per contract. However, TradeKing kills Zecco in the broker assist department as TradeKing does not charge extra for broker assisted trades. It almost sounds too good to be true.

Also, the margin rates of TradeKing is much better than Zecco. While I don’t recommend using margin to buy stocks, it is common practice and the difference is huge.

Customer Service of Zecco vs TradeKing

Instead of writing a long winded version of this, consider the 2008 Smart Money’s annual broker survey in this category:

Best: TradeKing
Worst: Zecco

Zecco or TradeKing?

The Case for Zecco Trading - $0.45 is $0.45. For those that trade many times per month, any difference in price adds up. Also, once you start hitting the 25 trades per month mark, you get 10 free trades per month (that’s $45 every month). Sure, the customer service might not be very good but how many times do you actually need to call them? Also, for those that don’t have $25,000, make more money in the stock market and you will get to the threshold in no time (that’s the whole point of having a trading account anyway right?) By going with Zecco, you now have an added incentive to make more money.
The Case for TradeKing - For only $0.45 per trade and $0.15 per contract more than Zecco, TradeKing actually offers customer service that is best in the industry in case you need to call. It also offers unbeatable commission rates on broker assisted trades and awesome margin rates. If you borrow money to trade at all, then there is no comparison. Go with TradeKing.
Bonus - TradeKing is running a limited time offer to reimburse the transfer fee from your current broker for up to $150. If the transfer fee is the only thing stopping you from moving to TradeKing, there is really no excuses now. Click here for more details.