Investing Manager
Joined: 02 Jun 2006
Posts: 321
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117363.53 e$
Net worth: 117,363.53
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 I had this trouble with Zecco. I believe they call it a Money Due (MD) call since it's really not legal for a retirement account to have a margin feature. Their software can automatically detect if you have reached your purchasing limit. I would usually enter several limit orders and their program will know if I no longer have sufficient funds based on the open orders I made by rejecting the last order.
I trusted their program thinking that I cannot buy more than my purchasing power (they actually provide this buying power on their site in real time so you can keep track of your balance). However, their program missed this time and I didn't know getting a money due call was possible. I was wondering why I had a negative cash balance. I thought that was just an error. Well, I should have called them because in 5 days, they liquidated one of my stocks and charged me $20. I complained to them about this and this is their response:
| Quote: | Dear client,
Thank you for contacting Zecco Trading. After reviewing your margin call with management, Zecco stands by the sellout due to the margin call. As with all self directed accounts, the client is respsonsible to ascertain sufficient funds are in the account to cover any open orders that get executed. Call can still be created in a IRA account if you do not have sufficient funds to cover any transactions. In addition, per industry regulation governing margin trading, Zecco reserves the right to sell out a position without notice to meet a call. |
So beware. Note that this is an IRA account so there isn't much in there. I make small $200-$300 purchases so that $20 charge takes 6-10% off the transaction right away. They have a crappy program and the rep even told me that they can't do anything about these glitches. They will not take liability for program errors. Zecco sucks and the only good about them are the free trades (which used to be great). |
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