Zecco Trading, best known for their free stock trade offers, recently started a Forex platform where you can trade foreign currencies. Since Forex appears to be a zero-sum game (negative if you account for inflation and spread costs), I wasn’t really interested. However, today I received an e-mail that they are giving me a $200 bonus to try it out. Okay, now I’m listening.
You must open a Zecco Forex account, fund the account, and make your first trade by July 31st, 2009. The promotional code given to me was CashAd04. The actual bonus amount depends on how much money you have in the account when you place your first trade:
The fine print:
To qualify for cash bonus, you must open and fund a new Zecco Forex trading account by July 31, 2009. After first trade is initiated, cash bonus will be deposited to your account within 3-5 business days. Bonus amount varies based on amount of deposit according to the following schedule: $200 bonus with deposit of 10,000 or more; $100 bonus with deposit of $2500 -$9999; $75 bonus with deposit of $1001-$2500, $50 bonus with deposit up to $1000. Cash bonus cannot be withdrawn within 90 days of initial funding. Existing Zecco Forex customers who have funded and traded are not eligible to receive this promotion. Self-directed trading accounts only; managed accounts and accounts referred by an Introducing Broker are not eligible to receive this promotion. Limit one cash bonus per customer. This offer is non-transferable.
Credit card funding. An possible extra is that you can fund via a credit card. According to posters in this FW thread, this should show up an a purchase, which means we can get miles or cash back on top of the $200 bonus. There is a $5,000 cap on each credit card funding, but you can perform multiple transactions. However, there is a chance that withdrawals will also be done to a credit card, which would negate any rewards. Worth a shot?
Warning. Forex accounts let you use things like 200x leverage, which means you can both win or lose a lot of money really, really fast. (More likely lose due to spreads.) Don’t place a trade until you know what you’re doing. I’ll post my trades if I do them. So far, I am looking at placing an unleveraged/minimally leveraged trade with a 1-2 pip spread in a Mini account.
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You have to make 1 trade. Anyone know enough about these type of accounts to recommend a small trade to get the bonus?
That’s a good question. I’m not that familiar with this stuff, and am waiting for my account to be approved to learn the details. The Forex account doesn’t charge commission, it makes money on the bid/ask spread. EUR/GBP appears to have smallest spreads.
The Mini account trades smaller 10,000 lots, but higher leverage? Am I correct to assume that I can deposit $10,000 and try to trade a lot with zero leverage?
If you deposit $10,000 they say you can use Forex Pro which has tighter spreads.
I don’t have too much experience with Forex, but I have received other account opening bonuses at other Forex shops. My impression was that everyone trades with the same amount of leverage. You can get in and out of a trade in minutes. With 450x leverage, for example, I never gained or lost more than $1 on a short-term trade.
What about the 3% Cash Advance fee that the credit card companies charge? That’d still apply to this credit card funding right?
One potential warning: I saw no info on the website that specifies whether the account is covered by FDIC, or any other insurance. Foreign currency accounts probably have no coverage at all. If the company suddenly disappears, how do you recover your investment?
Anyone doing this for the first time mainly to collect the bonus, be very careful. I would recommend putting in a trade and closing it out right away because Forex is very hard to beat. My brother has 3+ years of experience trading and its still tough even for him. Unless you want to spend time and energy and cash learning Forex, I would just make the trade quickly to get your money and then stop.
Oops, wrong post.
TT: You can calculate this for yourself to see what is the cheapest. Here’s the short answer: I did a quick calculation, there could be something that’s cheaper though, since I didn’t go through everything. EURCHF costs ~$0.93 (1 pip spread * $0.93/pip value) to trade it. Here’s the long answer: When you sign up for the account you can login to your account through the Zecco website (note: not the Desktop or the Java web platform). Once you have logged in, you can go to the Tools > Pip & Margin Calculator. Make sure your Account Type “Mini” (these are 10k lots) is selected, assuming that these are the lot sizes you are setup for–if you are setup for a standard account, you should have them change it to a mini. Now, you can see there is a column “USD Pip Value” for each pair. Next, you just have to multiply these pip values by the spread amount for each pair and you’ll get the amount that the trade will cost you if you can instantly open the trade and close it without the prices moving.
What are the ways to withdraw money from the account? Funding options are only credit card, wire or check. There is no regular ACH option. Whoever funded with CC please let us know if your credit card company charge you any extra to whatever you deposited or considered the transaction as a cash advance. Thanks.
VLAD
Funded 2X 5000 on schwab 2% card. Zecco said it was a purchase and that they did not even have the capability of ,aking this a cash advance. Though it is atill a temporary authorization, schwab said it would almost surely be a purchase when the charge hit.
Charlie
How about buy 1 XAU/USD (that would be 10 oz of gold-right?)then sell immediately. Spread is about $5.00.
Your initial deposit must be credit card, wire transfer or snail-mail check, but AFTER that, you can fund using ACH. Withdrawals can only be done with wire transfers or snail-mail checks.
I funded on schwab 2% card yesterday. Made a couple of trades, confirmed the bonus, and then requested withdrawal via check. Confirmed with CSR that check would be mailed within 2 business days. Just got an email from customer service that said “As you have made several large credit card deposits to your FOREX.com account in and do not appear to be actively trading, we will be sending your funds back to the original funding source. We reserve the right to send the funds back to the original funding source, which is the credit card in this case.”
Snagged the bonus but will lose out on the cashback.
TT,
If you can do it immediately, then it would cost $5.50. I would be careful since any movement it seems would be +/- $100 per pip. If anything, Zecco has a practice account that you can place a trade with the pair you are interested in and then see what the cost will be to you. I’d do that and get a handle of how the platform works before you go ahead and do it in real life.
I did the XAU/USD trade today. Lost 7.50.
Now I am thinking wait until the card cycle closes, and the promo is over, and possibly request the funds back in 4-5 checks spread over as many weeks.
Did you guys notice the message that says that “This promotion is limited to Zecco members who were sent the promotional email on July 8th 2009. This offer is not transferable”?
I tried to go ahead and open an account but I can’t see where we are supposed the enter the promotional code “CashAd04”.
Am I the only one?
The wording about “This promotion is limited to Zecco members who were sent the promotional email on July 8th 2009.” is definitely new. Hmm.
I did the XAU/USD trade as well, did a buy and immediate sell. Amazing how there was no confirmation step at all. Total loss $11.00. Will wait for $200 before doing anything else.
My credit card deposits were processed as purchases.
Where are we supposed to enter the promotional code “CashAd04″ ???
At the end of the application process.
Sorry. It’s at step 3 of 5.
see here>
http://fatwallet.cachefly.net/attachments/13151_promocode.png
Has anyone got the bonus in their account yet?
Zack – You type it in near the end of the application, if I recall.
Ankit – Yes, I got my $200 about 24 hours after my first trade.
Justin – I’m not sure if you’re kidding or not. How does the price-fixing of milk in your area have to do with my loss-leader analogy? Let Wikipedia explain instead…
http://en.wikipedia.org/wiki/Loss_leader
I think the promo code was automatically filled in for me during the application process. Well I hope so because I don’t remember typing that in..and i just assumed that by using the link in the email that I would be getting the $200 bonus. anyone know? thanks
The code was automatically filled in when I clicked the email link.
Thanks Janet.
I had a family write out a check for me and they sent Zecco $10,000 instead of $10,010 like I asked. I think I will make another deposit before I place the trade because depending on where you read I may not be eligible for the full $200.