Zecco Trading has been open and giving away free stock trades since 2006, making some people wonder: is there a catch? We checked, and Zecco is most definitely NOT a scam. (If it were, we at the Broker Insider would be the first to find out and cry foul.) There are 5 good reasons, and you can check them all yourself, like we did:
- Real free stock trades. We independently interviewed customers and the brokerage itself, and it’s true: Zecco provides free stock trades every day, and has done so consistently since 2006. (Getting the 10 free trades each month requires holding $25,000 in assets.) Zecco has over 100,000 accounts, and we can’t find a single customer who hasn’t received the free trades they were eligible for.
- Offices here in the US. I have personally seen the headquarters in downtown San Francisco, as well as their huge customer service and operations team in Pasadena. It’s very impressive! There are over 50 reps in the service center, and they are all in the United States, not in India or the Philippines.
- FINRA membership. FINRA is the private-sector body that regulates the stock brokerage industry, and they actually impose more stringent regulations than the SEC does. Basically, being a member of FINRA (as well as of SIPC) means much tighter operational, marketing, and reporting requirements — not the kind of thing you’d do if you were a scam.
- Clearing through Penson. Penson is the company that actually does “clearing” for Zecco, which means that Penson makes sure that stocks actually get traded on the backend. Penson is the #2 clearing firm, servicing many other discount brokers like TradeKing, MB Trading and OptionsHouse. The inside scoop from Broker Insider is that, while Penson has its issues, particularly on the integration side, their clearing services are very fast and reliable. Zecco benefits from this with very fast executions, which experienced traders have noticed.
- Similar promotions from other brokerages. Both Wells Fargo and Merrill Lynch offer similar quantities of free stock trades to their brokerage customers. We can really recommend either as brokerage platforms, though, and Zecco has low stock commissions of only $4.50 each once you’ve used up the free trades.
In summary: Zecco Trading is not a scam, but a completely legitimate online stock broker that just happens to offer free trades as a marketing tactic. Sign up for Zecco and get free stock trades today.
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