Zecco Buying Power: What It Is and How It Works

Review of: Zecco Trading
Discount Stock Broker:
Zecco Trading
Price:
$4.95 per trade

Reviewed by:
Rating:
4
On February 22, 2011
Last modified:October 30, 2012

Summary:

Zecco buying power is amount of cash you have in your Zecco Trading brokerage account that lets you buy stocks and ETFs without restriction. Newly added fund will have a wait period of three business days before it become available for trade.

Zecco Trading is a popular online discount stock broker that allows investors buy stocks and ETFs (exchange traded funds) at low costs. With Zecco, you can invest in stocks and ETFs, at only $4.95 per trade, regardless the number of shares you want buy or sell. If you have a large portfolio, you can even trade for free with Zecco Trading. Under its current commission plan, customers with $25,000 or more with Zecco can enjoy 10 commission free trades per month. You won’t get that kind of treatment from other discount brokers for sure.

Once you open a Zecco Account (see my┬ácomprehensive Zecco discussion┬áposts on the process of opening a Zecco Trading Account) and fund it, either through ACH bank transfer, check, or wire, you will notice that you have Cash Purchasing Power in your account. The buying power is equivalent to the amount of fund you add to your account, which allows you to purchase stocks. Basically, Purchasing Power determines your ability to buy shares with your fund that are currently available for trading. In some cases, for example, when you sell some shares of a stock, your account cash balance will increase accordingly, from the proceeds of the transaction. However, you won’t be able to use the proceeds to buy new shares immediately because your purchasing power will not increase until the fund from selling shares settles. Therefore, you will see a discrepancy between cash balance and purchasing power.

Also, since there is a 3-business day delay for ACH fund transfer and your account purchasing power won’t reflect the amount of cash you have added to the account until the fund has been cleared for trading. Before making a trade, you should always check out your account’s purchasing power to see how many shares you can buy :)

Zecco buying power is amount of cash you have in your Zecco Trading brokerage account that lets you buy stocks and ETFs without restriction. Newly added fund will have a wait period of three business days before it become available for trade.

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2 Responses to “Zecco Buying Power: What It Is and How It Works”

  1. Zach |  Feb 24, 2011 at 1:44 pm

    Zecco uses the web based trading platform called Medirian that is produced by Nexa Technologies which I believe is a the software development division of Penson.

    My understanding is that Penso and Nexa run most of the backend technical side of Zecco’s systems. I guess by outsourcing they are able to keep the trading prices low.

    My confidence level with Zecco is fairly low so I would not trust them with my retirement funds. They have had several outages during high trading times which they have not admitted to.

    If you want a basic cheap brokerage to do frequent trading with then I think Zecco is an excellent fit.

  2. John |  Feb 25, 2011 at 9:34 am

    I also use Zecco for a small account. I think Penso handles the clearing part for the broker, which is also use by other brokers as far as I know. Sure, they have a lot of improvements to do on their website, trading, etc, but it’s quite cheap. Then I only have a small account with them.