Zacks Trade is an online brokerage firm that’s been popular particularly with active traders. However, now that most online brokers have eliminated commissions on trades, Zacks Trade’s penny-per-share pricing looks less attractive.
In this Zacks Trade review, we’ll take a look at the brokerage and its services to see if it could still be a good fit for your portfolio.
Zacks Trade Review
When it comes to Commissions & Fees, you can do better elsewhere for online trades. You’ll pay a minimum of $1 for most trades, whereas other brokers have switched to being commission-free. There are plenty of Account Options at Zacks Trade, but it lacks the bank accounts many other brokers offer now. As for Investment Options, you’ll find the usual offerings: stocks, penny stocks, options, ETFs, mutual funds, etc. However, you can also use Zacks Trade to invest on more than 90 international exchanges, too. There are plenty of Tools & Resources to use, but they’re really geared toward advanced traders. This is why we deduct points for the Website/App/Ease of Use. The platforms are not particularly user-friendly (and you can find the same kind of functionalities elsewhere for much less cost). Zacks Trade’s Customer Service is available during business hours, but other brokers offer 24/7 phone and live chat support now.
Zacks Trade Features
|Commissions & Fees||$0.01 per share, $1 minimum|
|Options Trades||$1 for first contract, then $0.75|
|Mutual Fund Trades||$27.50|
|Types of Investments||Stocks, ETFs, Options Bonds, Mutual Funds|
Ability to trade on over 90 foreign stock market exchanges.
|Types of Accounts||Taxable, Joint, Trusts, Retirement Accounts (Roth IRA, Traditional IRA, Rollover IRA, SEP IRA)|
|Managed Portfolio Option||N/A; Rebalancing through Zacks Trade Pro|
|App Availability||iOS, Android, mobile optimized website.|
|Customer Service||Phone: M-F 9-6; Live Chat: 9-6; Email|
|FINRA CRD#||CRD#: 7874|
|SEC Registration Number||SEC#: 8-23266|
- No Extra Fees on Broker-Assisted Trades. A real rarity among online brokers, Zacks Trade offers broker-assisted trades for no additional fees.
- Foreign Stock Exchange Trading. With a Zacks Trade account, investors can trade on nearly 100 international exchanges.
- Open to International Investors. Investors in almost 200 countries (excluding Canada and Japan) can use Zacks Trade.
- Day Trading. You can use Zacks Trade’s platforms for day trading as long as you have a balance greater than $25,000.
- Portfolio Rebalancing. Zacks Trade offers a tool that will rebalance your entire trading portfolio based on your goals and risk tolerance.
- Market Screeners. Screen stocks, options, and funds based on parameters that you specify.
- Free Paper Trading. You can “practice” on the Zacks Trade Pro platform without committing a penny.
What Is Zacks Trade?
Zacks Trade is a platform designed specifically for active traders. The online brokerage was founded by Len Zacks, who began publishing works on innovative investment strategies back in 1978. Zacks also founded North America’s second-largest independent equity research firm, Zack’s Investment Research (ZIR).
After a few decades of providing top-notch research, ZIR established LBMZ Securities, the broker-dealer that runs Zacks Trade. The mission for Zacks Trade is to supply active, independent traders with cutting-edge tools and sophisticated research.
Altogether, the Zacks Companies as a whole manage more than $5 billion, and more than 200 million shares have been traded on Zacks Trade.
How to Get Started with Zacks Trade
Unlike some other brokers that are geared more toward beginners, Zacks Trade requires you to have some sort of trading experience. When you apply for an account, you’ll need to submit a trade history of at least 100 live trades. But you can also substitute 100 trades made with a simulated trading account (and Zacks Trade itself provides a virtual trading platform that will let you do this).
You also need to meet the requirements for annual net income and liquid net worth. If you want to trade more advanced securities, there may be additional requirements.
There are two different kinds of accounts you can open at this broker: cash accounts and margin accounts.
- With a cash account, you can trade only the funds you deposit.
- If you are approved for a margin account, you can borrow money from Zacks Trade (and owe interest) to purchase trades.
Application documents can be mailed, faxed, or emailed to the customer support team at Zacks Trade.
Note that you also need a minimum balance of at least $2,500 to trade on Zacks Trade.
Typically, it takes 24 to 48 business hours to find out if you’ve been approved for a Zacks Trade account.
Funding Your Zacks Trade Account. You can transfer money into your Zacks Trade account by completing a wire or ACH transfer or by mailing in a check.
How Does Zacks Trade Work?
Zacks Trade offers three trading platforms that anyone with an account can use.
Zacks Trade Pro is the flagship interface. You can download it onto your desktop. This platform has a whole bunch of cool tools to use:
- Algorithms: Use algorithms such as Arrival Price, Percentage of Volume Strategy, TWAP, and VWAP
- Basket Trader: Import and execute baskets of stock orders
- Market Scanners: Screen stocks, options, mutual funds, bonds, and more based on your specified parameters
- Options Strategy Lab: Generate strategies based on your price forecast for underlying stock
- Probability Lab: Calculates options probability
- SpreadTrader: Manage complex option spread orders
- Volatility Lab: A complete toolkit to help you manage volatility
As you can guess, Zacks Trade Pro is geared toward advanced traders, not beginners.
More novice traders may prefer the Zacks Trader platform, which is a scaled-down trading experience. The browser-oriented Zacks Trader is fundamental in nature while still providing high-end customization options and tools.
There’s also a mobile app called Handy Trader, which lets you do pretty much everything the Zacks Trader platform does but from a mobile phone.
Now, it’s important to note that all three of the Zacks Trade platforms are practically identical to what’s offered by Interactive Brokers. That’s because Interactive Brokers created the platforms, and Zacks Trade rebranded them.
Interactive Brokers recently changed its pricing structure and now offers two accounts, IBKR Lite and IBKR Pro. If you’re investing in just stocks, you can pay zero commissions with an IBKR Lite account. More complex trades with IBKR Pro will involve commissions, but they’re lower than what Zacks Trade charges.
Zacks Trade offers a variety of investment options for traders, including:
- penny stocks
- mutual funds
There are no account, maintenance, order cancellation, account inactivity, or IRA custodial fees. Service offerings are also offered a la carte style at a monthly rate.
The more you trade, the more you save. For more details on U.S. trading fees or to view international trading fees, visit Zacks Trade’s pricing guide online.
- Stocks & ETFs greater than $1 per share: $0.01 per share ($1 minimum)
- Stocks & ETFs less than $1 per share: 1% of trade value ($1 minimum)
- Options: $1 for first contract + $0.75 per additional contract
- Mutual funds: $27.50
Is Zacks Trade Secure?
By all means, Zacks Trade is a secure, reliable interface that takes the protection of client information seriously.
Along with standard encryption technology — 128-bit SSL encryption, to be exact — users can breathe a sigh of relief with maximum insurance protection coverage of $500,000 (cash sub-limit set at $250,000) against broker failure.
A secure login system is required for all users, no matter which workstation interface they use.
Multiple security devices aren’t required, because a single device is shareable among more than one account per user. There’s no minimum asset limit, so user accounts are fully protected regardless of capacity.
For those wanting to go the extra mile in account protection, account access can be securely restricted to pre-determined IP addresses.
The intuitive software automatically restricts account access after a set number of failed login attempts, and automatic log-off initiates if a certain period of account inactivity is detected.
Zacks Trade Pros & Cons
Before deciding to invest time, money, and effort into Zacks Trade, let’s examine the pros and cons of this online-based resource. An informed decision is always the best decision.
Taking a quick glance, it’s evident Zacks Trade authorizes one-of-a-kind trading fees, global market data streaming, and a la carte service offerings, among other features that may attract the more seasoned trader.
Since the interface is not quite as user-friendly compared to similar investing platforms, and a $2,500 minimum balance is required for all users, a steep learning curve (and dint in one’s bank account) may be on the horizon for interested novice traders.
Let’s now walk through the main pros and cons of Zacks Trade’s signature offerings.
- Free Broker-Assisted Trades: Unlike many other stockbrokers, Zacks Trade does not charge extra for broker-assisted trades.
- Live, Licensed Broker Support: Zacks Trade values the importance of building client relationships and product loyalty. Live, online access to a licensed broker invites a more “intimate” investing experience.
- Access for International Clients: Accessible in more than 200 countries and capable of trading on more than 91 international exchanges, users can participate in profitable trading ventures around the globe.
- Customizable Workstations: Feature-rich, intuitive workstations are customized to a specific user’s experience level and trading priorities.
- Global Market Data: Available 24 hours a day, exclusive global market data is available to users (15-minute stream delay must be taken into account).
- Research Tools: Thanks to a partnership with Zack’s Investment Research, users can access free research subscriptions and premium trials to boost their investing potential.
- Paper Trading for Beginners: Users can sign up for a demo account preloaded with $1 million in “virtual” funds for 90 days. Paper trading allows beginners to get their feet wet before diving in headfirst.
- Attractive Margin Rates: If you want to invest in a margin account, Zacks Trade offers some of the lower margin rates in the industry.
- Not Commission-Free: Unlike most of the other online brokers, Zacks Trade has not eliminated commissions on trades. You can find many of the same features offered by other brokers for free.
- Not “Beginner Friendly”: Zacks Trade’s complex workstation interface could seem quite intimidating for newbies. The Zacks Trader interface is available for novices wanting a clean, simple workstation without all the bells and whistles.
- High Required Minimum Balance: Although Zacks Trade doesn’t require users to pay any unwanted account-based fees, users must initiate an account with at least a $2,500 available account balance.
- Limited Customer Service Hours: Unlike some other brokers that offer 24/7 customer service, Zacks Trade’s phone and live chat are available only during regular business hours (M-F, 9 a.m. – 6 p.m., EST).
- Withdrawal Fees: One withdrawal is permitted from a specific account monthly. A subsequent withdrawal in the same month costs $1.00 for an ACH withdrawal, $4.00 for a check payment, or $10.00 for a wire transfer.
- SIPC Insurance Protection Restrictions: Although you’re taken care of with a maximum coverage of $500,000 ($250,000 cash sub-limit), SIPC cannot protect compromised accounts or guard against fraudulent account activity.
Zacks Trade Review – Conclusion
Zacks Trade is geared toward more advanced investors, investors living overseas, or investors who want access to stock exchanges outside of the U.S.
If you are a more casual investor or do not need access to overseas exchanges, then you may wish to choose a different brokerage, especially now that most of the online brokers have eliminated commissions. For example, you can use TD Ameritrade’s award-winning Thinkorswim platform to trade stocks, options, and ETFs without paying commissions. And beginning investors may be better served with an easy-to-use broker like Ally Invest.
Who is Zacks Trade best for? If you are an advanced investor or you want to trade on margin, Zacks Trade is still a good call. The broker offers some of the lowest margin rates around, so you could end up saving money on interest.
Zacks Trade is also an excellent option for investors who either live outside of the United States, or wish to trade on exchanges located outside of the U.S.
Finally, Zacks Trade is also good for investors who want over-the-phone broker assistance. Not only can you reach a licensed broker during business hours, but they can place trades for you without charging you extra in fees. By comparison, TD Ameritrade charges an astronomical $44.99 for this luxury. Ally Invest is a bit more affordable, at $20. However, if this is a feature you regularly use, Zacks Trade should be at the top of your short list.