New to stocks -- Zecco?

[ps2cho]

Hi everybody,

I was looking a while ago at investing into stock but I only have probably $300 that I could invest and with all of the trade fee's, it would make it hard to profit. I want to invest have some fun and learn so that in the future I can be wise and maybe haul in some extra cash!

Now, looking at that Zecco website, it states no trade fees for stocks. What is the catch? Is there a catch? I just want to put lets say $100 into Boeing for example, can I just use that site, invest $100 and lets say the next day sell and I get ALL the money that I sold for? Do they charge any fee's for exactly what I just did in the example? If not then that site may be the one for me! Because I just want to research really hard and do small trades every now and again for practice, fun and experience.

I am 18 years old and I have done a few stock simulators and have done the same thing in my AP Government class and made a small amount of cash doing it kinda halfassed(just invested in random companies where I saw they were going up within a short amount of time) So I think I could have a good potential if I really researched what I was investing in. I have bought a few books to read before I invest, I just wanted to see what the deal is with zecco?

Thanks, ps2cho

[Airelon]

First of all, your question regarding Zecco.

I have an account with Zecco. A small starter one, to get the feel for them. At the moment I hold some GMR and F (Both long term) with them. There's no real "catch" although there are a couple of contingencies. You can't day trade with Zecco. If they catch you daytrading with them (according to the SEC's rules), then they'll probably lock your account up. But that's ok, because for a newbie to try day-trading - is well . . . suicide. The free trades last for 40 trades a month, or 10 per day. After that, it's $3.50 a trade; which is still very reasonable. Heck, I don't think I've ever performed 10 / 40 in my entire trading / investing career.

They basically make their money by the interest on margin accounts and options trading - and they are keeping their costs small with a different strategy for advertising.

Second question. Your example. Yes. If you bought Boeing at $100 per share, there would be no fees. Just that, you'd buy it at $100.00 per share. You could sell it the next day if it hit $102.00, and take your profit. No fees. Up to 40 times per month, or 10 times per day. No problems.

$300.00 isn't a bad amount to spend for a starter account. It'll help you get your feet wet.

Whatever you do, I suggest you read, read, read. Read about Money Management principles (The most important concept to a trader, and to an investor). Read about P/E's, and fundamental analysis. The difference between investing, and trading. Read about Seasonal tendencies. Read about Chart patterns. Read about technical analysis. Dividend investing. As much as you can get your hands on, but ESPECIALLY Money Management principles. I've learned not to listen to folks who tell you only one of those is "the only thing you need" as if it's the holy grail of trading. Some people do fine with just one - and that's no problem (Generally, those people are really good at money management principles). I've found however, that it's more advantageous to combine them all.

[aquaswim47]

I also have a starter account with Zecco with $300. My largest holding there is one share of GS. I also own a little CHTR, NSTK, and ASX. I plan to buy 1 share of MCD in which would be my second largest holding in the account. If I could unload JCP at this time (own 8 shares), I'd buy Boeing in a heartbeat; however, I believe it has good prospects and I have a major loss in it. Fundamentally, it is excellent but it went with a downward spiral in retail. I bought the thing with a limit order at $74 per share. I would have bought the stock probably with a smaller limit order of $70 if I had to do it over again as I really believe in the company. The company hit its 52 week low of less than $62 per share on August 10. Right now, it is trading at $64.55 per share. Wish I could buy more.

JCP is a long-term holding. I plan to hold JCP for 4-16 months. I'm looking for a solid Christmas shopping season or better yet, a good back to school season (which I don't expect). I think the recession has to hit before I benefit from JCP. Similar to TEVA, it will take patience. A lot of patience. But I feel that it will pay off as it has a solid balance sheet and great prospects; it's increasing by 20% in size over the next 5 years. It has a low PE ratio of 10.25 and a PEG ratio of 0.78 and benefits from a slow but steady growth rate.

[ps2cho]

Originally Posted by Airelon

First of all, your question regarding Zecco.

I have an account with Zecco. A small starter one, to get the feel for them. At the moment I hold some GMR and F (Both long term) with them. There's no real "catch" although there are a couple of contingencies. You can't day trade with Zecco. If they catch you daytrading with them (according to the SEC's rules), then they'll probably lock your account up. But that's ok, because for a newbie to try day-trading - is well . . . suicide. The free trades last for 40 trades a month, or 10 per day. After that, it's $3.50 a trade; which is still very reasonable. Heck, I don't think I've ever performed 10 / 40 in my entire trading / investing career.

They basically make their money by the interest on margin accounts and options trading - and they are keeping their costs small with a different strategy for advertising.

Second question. Your example. Yes. If you bought Boeing at $100 per share, there would be no fees. Just that, you'd buy it at $100.00 per share. You could sell it the next day if it hit $102.00, and take your profit. No fees. Up to 40 times per month, or 10 times per day. No problems.

$300.00 isn't a bad amount to spend for a starter account. It'll help you get your feet wet.

Whatever you do, I suggest you read, read, read. Read about Money Management principles (The most important concept to a trader, and to an investor). Read about P/E's, and fundamental analysis. The difference between investing, and trading. Read about Seasonal tendencies. Read about Chart patterns. Read about technical analysis. Dividend investing. As much as you can get your hands on, but ESPECIALLY Money Management principles. I've learned not to listen to folks who tell you only one of those is "the only thing you need" as if it's the holy grail of trading. Some people do fine with just one - and that's no problem (Generally, those people are really good at money management principles). I've found however, that it's more advantageous to combine them all.

Thats awesome thanks! I will definitely read those things.
What, though is day-trading? I looked it up and it says people who buy and sell stocks during the day a load of times....right?

[Airelon]

Pretty much, yes.

They buy tons of shares, and just take a few cents at a time profit. Many times throughout the day. Usually on margin (Sort of like credit). If they are long XYZ stock, a daytrader will be out before the end of the day.

As simple as it sounds, in practice it is extremely difficult to do. Too many people figure they're the exception to the rule, and I've seen too many people lose thousands. In 12 years? I think I know 3 or 4 people who've done it successfully.

[aquaswim47]

Day-trading only requires four day trades per 5 day period (that's less than 1 day trade per day) to be classified as a pattern-day trader. A day trade is a buy and a sell transaction. As a PDT, you must deposit $25,000 and have margin account privileges.

[Fredledingue]

Aren't they also buying cheaper than you limit?For expamle you put an order to buy at 65. They find shares for 64.95, sold them to you for 65 and pocket 5 cents per share.

[Airelon]

Experiment:

Trying a little experiment here. I've heard a lot of complaints with Zecco, that once they have your money, they let you trade no problem, you can zip right along. But if you try to withdraw your money - they don't let you have it.

This is completely experimental account. So I figured - why not run an experiment? Try and get out some money. Say, just $60.00 in cash that's sitting there, and see how it goes. Put in the request on Friday, September 7th. It's ACH, so I expect it to take about 5 days.

4 days later, and the request for funds is still sitting on my page saying: "Pending Broker Approval"

Will keep you guys updated.