Stock Market for Beginners

If you haven’t heard yet, Zecco offers 40 free trades per month! After that, they charge $3.50 per trade. If you’re into trading options, it’s a ridiculously cheap $3.50 per trade and $.60 per contract. They also have a useful community section dedicated to investing blogs and forums to facilitate knowledge transfer across users.

How, you might ask, do they make money then? What’s the catch? Well, they make money through online advertisements and premium services. On top of that, they don’t have heavy marketing efforts like the other major brokerages who spend lots and lots of money on tv ads and so on.

I’ve been using Zecco for over 6 months now with no big problems. If you’re really paranoid, I have the ultimate indicator of Zecco’s validity: the market. When Zecco announced its product and in period following, all of the other major brokerages’ stocks dropped a significant amount on the news. Furthermore, Bank of America came out with its own free trading platform - but with a catch. You have to maintain a minimum account balance of $25,000. Ouch! Zecco doesn’t require any minimum balance.

But besides all the jazz, here are some of the cons to Zecco that I’ve ran into:

• Customer service is difficult to contact and slow to respond
• You don’t have all the sophisticated tools and reports that most other brokerages offer
• Zecco is not supported by TurboTax at the moment (although this may be fixed by next year), so I had to manually enter my trades into the tax forms
• It may be more difficult to short stocks than at the other major brokerages because there are fewer people to borrow from
• Your account information will sometimes display incorrectly because they are constantly updating the website and will mess up on occasion

Despite these problems, I’ve found that Zecco has made it its mission to serve the free trading world. They have an impressive management team and they’ve been rolling out features and fixes on a consistent basis to make their services better. Zecco even came out with a new slick user interface a couple months ago! I’m positive that Zecco will be here to stay for the long run.

Hopefully, this review will be helpful when you make your decision as to which brokerage to go with. In the meantime, I’m sticking to Zecco as long as it keeps up what it’s doing and giving me those free trades!

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