Review of TradeZero International
TradeZero has one branch in America, one in Canada, and another in the Bahamas. This third branch doesn’t have pattern-day trading requirements, although there are lots of strings attached. Here are the details:
Insurance and Regulations
TradeZero Bahamas is not headquartered in the United States or Canada. Its main office is in Nassau,
which means it is governed by the securities regulators in the Bahamas. Thus, there is no SEC or
FINRA in this picture.
SIPC insurance is also off the table. TradeZero Bahamas does have insurance through Lloyd’s of
London and Bahamas First General.
Account Opening
A securities account with the Bahamian arm of TradeZero can be opened online on the appropriate
website. This will be at tradezero.co, and not tradezero.us or us.tradezero.co, which are the
American branches. Simple enough.
But here’s where the caveats come in: Americans, green card holders, permanent residents of the
US, and Canadians cannot open accounts. Even Bahamian citizens are not eligible. They will simply
be pointed back to the American or Canadian branches of the company (the Canadian site is at
tradezero.ca). Accounts opened at either firm will be subject to pattern-day trading rules in
their respective countries.
TradeZero Supported Countries
The list of countries where isTradeZero is available:
United States, India, China, United Kingdom, Canada, Australia, Thailand, South Africa, Singapore,
Hong Kong, France, Germany, Norway, Sweden, Italy, Denmark, United Arab Emirates, Saudi Arabia,
Spain, Poland, and others. As an alternative, a USA broker Zackstrade
supports almost all countries.
Asset Classes
TradeZero clients can buy and sell the following investment vehicles:
- Warrants
- Stocks
- Exchange-traded funds
- Option contracts
There are no other financial instruments at this time. TradeZero does have plans in the works for cryptocurrency trading, but it remains unavailable at the time of publication.
Day Trading
4 stars
The Bahamian branch of TradeZero is especially enticing because it doesn’t have any pattern day-trading rules (other than a $500 minimum account balance).
Direct-access routing. Multiple software platforms have a routing menu.
Shorting. Not only can TradeZero customers short securities, the brokerage firm has a new patent-pending innovation that lets them sell back short locates that aren’t needed anymore.
Level II quotes. Available for the major exchanges free of charge.
Routing fees and rebates. Here’s one disappointment: only TradeZero America offers maker-taker fees.
Margin Trading
TradeZero Bahamas offers up to 6:1 leverage for day traders, although this does require account equity of at least $2,500. Below that account value, 4:1 leverage is available. If an account slips below $500, only cash trades are permitted. Accounts above $500 must be at 2:1 leverage by 3:55 pm, EST.
Stocks priced below $1 cannot be shorted at TradeZero, and stocks below $0.10 cannot be purchased or shorted. Stocks below $3 are cash only.
TradeZero Bahamas currently charges 8% on any margin debit held overnight.
TradeZero International Pricing
In line with its name, TradeZero charges zero dollars on some trades. These are limit orders of at least 200 shares on the major American exchanges that create an immediate match. The security traded must be priced at $1 or higher.
Trades that don’t meet the above requirements have a commission of 0.5¢ per share.
Orders of less than 200 shares have a $0.99 flat fee on top of the per-share commission.
Option trades cost 59¢ per contract. Exercises and assignments are $35.
TradeZero charges a monthly fee of $59 to use either ZeroPro or ZeroWeb. These are the best two platforms. We’ll take a look at them now.
ZeroPro
At the top of the food chain is ZeroPro. This is the broker’s flagship trading system, and it comes with a lot of useful tools. These include:
- Full-screen charting with accessories like indicators (more than 70 of them) and drawing tools
- Color-coded Level 2 data
- Advanced order ticket with conditional orders, discrete sell short button, and more
- Watchlist that updates in real-time
- Market movers (for example, NYSE Most Active)
- Hot keys
- Time & sales data (also color coded)
- Options trading window
- High Low Ticker (window shows securities hitting 52-week high and low spots)
Pro will work on any computer running Windows 7 or later. It does not function on Mac.
ZeroWeb
A step down is ZeroWeb. Unlike Pro, this software is not a discrete desktop application. Instead, it functions in a browsing window. The advantage of this setup is that ZeroWeb is compatible with Mac (via Firefox or Chrome, but not Safari).
Although it is a browser platform, ZeroWeb nevertheless manages to deliver a lot of the same great features that Pro has. For example, the software has hot keys, Level 2 quotes, charts, watchlists, and more. But other gadgets are missing. These include alerts and the broker’s stock screener. And ZeroWeb isn’t able to place option trades, a huge disadvantage.
Although TradeZero does have a mobile app, ZeroWeb can function on tablets and phones.
ZeroFree
Another step down is ZeroFree. This is an HTML5 platform that functions within a browser window. As the name implies, this platform is free to use. However, adding hot keys does come with an additional charge (it’s $15 per month).
ZeroFree can use one Level 2 window at a time. The other two platforms can use multiple Level 2 windows simultaneously. The number of charting windows is also reduced on ZeroFree. Two can be used simultaneously within a workspace. ZeroPro, by comparison, can use up to 10 charts at one time.
ZeroMobile
Finally, we come to the mobile app. Like ZeroFree, this platform is free to use. But the mobile app has the fewest tools. For example, missing widgets include alerts, a screener, market movers, and Level 2 quotes. Options trading is also not possible.
Despite the drawbacks, there are some highlights on the mobile platform. Here are some examples:
- Locate tool for hard-to-borrow stocks
- Trades and positions sync with other TradeZero platforms
- Compatible with both Apple and Android devices (phones and tablets)
- Watchlist
- News articles from Benzinga
- Charting with volume and OHLC data
Other Services
Extended Hours Trading: TradeZero customers can trade before the day session begins and after it ends.
Dividend Reinvesting: TradeZero does not have a DRIP system.
Fractional Shares: Only whole shares can be traded at the moment.
Cash Management Features: Debit cards and checks won’t be found here.
Initial Public Offerings: Not available, either.
Individual Retirement Accounts: No retirement accounts of any kind are available.
Recommendations
Mutual Funds: As already mentioned, TradeZero doesn’t offer mutual funds.
Firstrade does, and it has thousands of funds.
Small Accounts: Because TradeZero charges commissions on some orders, we have to suggest
Firstrade.
Long-Term Investors and Retirement Savers: A brokerage account at
Zackstrade (possibly several accounts) would be a good idea.
Beginning Investors: We can’t endorse TradeZero for beginners. A better idea would be a
managed account at Firstrade.
Active ETF and Stock Trading: Frequent equity traders will be fine with TradeZero,
especially with its ZeroPro platform.
Comparison
Compared to other Caribbean brokers, TradeZero is very competitive. For example, Capital Markets
Elite Group doesn’t offer trading in ETFs or options. And SureTrader has recently gone out of
business, leaving F1Trade that has no insurance.
But when comparing TradeZero to
Zackstrade
we get a completely different picture. Unlike TradeZero, Zackstrade offers mutual funds, IRAs,
no platform fees, lower margin rates and access to most markets around the world.
TradeZero International Review Summary
Although TradeZero in the Bahamas circumvents America’s PDT rule, it won’t deliver a great value
for some traders. Combined with a small list of tradable instruments, we feel underwhelmed.
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Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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