In addition to stimulus checks and the general public working from home a lot more due to the COVID pandemic, one of the biggest reasons for the recent massive increase in online day traders has been zero commission trading. Access to the financial markets was just a lot tougher for ordinary people in the days before zero commission trading. Not everyone had the extra cash to be paying $5 to $10 per trade. Zero commission trading changed all this. Broker/dealers such as TradeZero began offering zero commission trading and thus opened the floodgates, allowing the stock market to be accessible to ordinary people and not just a playground for hedge funds and institutional traders. In this article we break down the main factors to look for when choosing a broker/dealer with zero commission trading. Then we look at the specifics of the zero commission trading package offered by TradeZero.

Factors To Consider When Choosing a Broker/Dealer with Zero Commission Trading

Are The Executions Reliable?
When choosing a broker/dealer, in my opinion, it is important to not only choose one that offers zero commission trading, but also to choose one that has excellent order executions. By offering zero commission trading, some broker/dealers will unfortunately sacrifice the quality of executions. This means that the day trader might not be able to exit a trade at the desired price. Obviously this can be both frustrating and costly. Such uncertainty will just increase the chances of an overly emotional response from the day trader. Not a good situation.

Having used the zero commission trading service with TradeZero for almost two years now, I can personally vouch for the quality of executions. I can literally count on one hand the amount of times I've had slippage of more than a few cents. This gives me great peace of mind while trading, knowing that I can trust my broker to both enter and exit my trades accurately.

Does The Broker/dealer Offer Short Selling?
The current global recession has not been good for financial markets. Inflation has been another problem and has resulted in rate hikes by the federal reserve. This has seen many stocks plummet. Fortunately for day traders, short selling allows profits to be taken on the way down as well as on the way up. The problem is that not all broker/dealers allow short selling across most stocks simply because they don’t have any shares to borrow. And when they do have shares to borrow these are often at exorbitant prices. This all just means more costs for day traders. Choosing an broker/dealer that has zero commission trading and offers the ability to short sell therefore is definitely an important factor.

I have personally found TradeZero to be the best zero commission broker/dealer for short selling. Benzinga thinks the same as they awarded TradeZero The Benzinga Global Fintech Award for Best Brokerage for Short Selling in both 2020 and 2021.

Does The Broker/dealer Offer A High Quality Trading Platform?
Similarly to sacrificing the quality of order executions, some broker/dealers will cut costs in other areas so as to allow zero commission trading. One of these areas is often the quality of the online trading platform offered. Having suffered myself at the hands of zero commission broker/dealers with a poor quality trading platform, I can promise it is not a road worth going down. While trading, a day trader needs to have easy access to a reliable platform that allows technical analysis while being free from glitches and providing live, real time data. I personally use the TradeZero trading platform ZeroPro.

TradeZero Terms For Zero Commission Trading
The zero commission trading terms offered by TradeZero have slight variations depending on country of residence. Below is a breakdown of these differences.

Note: Traders will still incur some transaction fees for executing trades in the market, however, these fees are generally much less than commission fees.

  • Traders who wish to trade with a TradeZero America account are subject to the U.S. Pattern day trading rules and must maintain $25,000 in their accounts. All traders at TradeZero America can trade commission free on limit and market orders. The security in question must trade at $1 or greater and also must trade on the NYSE, AMEX or NASDAQ. For full terms and conditions for commission free trading with TradeZero America, click here.

  • For TradeZero residents of Canada, zero commission trading is available for all limit orders. The symbol in question must trade at $1 or greater, must trade on the NYSE, AMEX or NASDAQ and the limit order must not create an immediate match. The order must also be for 100 shares or more. For full terms and conditions for commission free trading with TradeZero Canada, click here.

  • For those day traders who use TradeZero International, all limit orders are zero commission provided they do not create an immediate match, trade at $1 or more on the NYSE, AMEX or NASDAQ and the order is for 200 shares or greater. For full terms and conditions for commission free trading with TradeZero International, click here.

Conclusion
Zero commission trading has been a leading factor in bringing a huge influx of new day traders into the markets. However, not all broker/dealers who offer zero commission trading are the same. There are several important factors to look out for including, the reliability of executions, the availability of short selling and access to a high quality trading platform. I personally recommend TradeZero as the best broker/dealer for zero commission trading.

Disclaimer
This content (“Content”) is produced by John Maher. The Content represents only the views and opinions of Mr. Maher. Mr. Maher’s trading experiences and accomplishments are unique, and your trading results may vary substantially. TradeZero does not endorse the Content and makes no representations or warranties with respect to the accuracy of the Content or information available through any linked third party sites. The Content has been made available for informational and educational purposes only and should not be considered trading or investment advice or a recommendation as to any security. Trading securities can involve high risk and potential loss of funds. Mr. Maher is compensated by TradeZero for producing the Content and may also receive compensation for customers he introduces to TradeZero.

TradeZero provides self-directed brokerage accounts to customers through its operating affiliates: TradeZero America, Inc., a registered broker-dealer and a member of FINRA and SIPC; TradeZero Inc., a dealer registered with the Securities Commission of the Bahamas; and TradeZero Canada Securities ULC, an IIROC member firm and member of CIPF.

Sources
TradeZero - Homepage (September 15th, 2022)
https://www.tradezero.ca/

Benzinga.com (September 15th, 2022)
TradeZero Named Best Broker for Short Selling for 2nd Straight Year at Benzinga Global Fintech Awards (September 15th, 2022)
TradeZero – ZeroPro (September 15, 2022)

https://www.tradezero.ca/zeropro

TradeZero US Pricing (September 15th, 2022)
https://us.tradezero.co/pricing

TradeZero Canada Pricing (September 15th, 2022)
https://www.tradezero.ca/pricing

TradeZero International Pricing (September 15th, 2022)
https://www.tradezero.co/pricing