TradeKing Review — Stock Trading Comparison (2012)

TradeKing is an online discount brokerage with an excellent trading platform and low transaction costs. TradeKing has all the tools a stock trader, options trader or investor could ever need. Here is a list of the trading and investing tools you will have available at TradeKing.

• Fundamental analysis research reports on more than 5,500 companies.
• Technical analysis with chart pattern recognition and price forecasting.
• Interactive charts that you can customize to watch for trend lines, technical indicators and compare to benchmarks.
• Option chains that are strategy based. You can find quotes, implied volatility and the delta at any strike price.
• Tax Manager Tool that will keep track of all of your transactions, cost basis, calculates proper tax relief and will also identify any wash sales.
• Probability Calculator can calculate the probability of any option or stock strategy before you put on the trade.
• An Options Calculator which will simplify the options math, showing you the implied volatility and the alpha and delta of each option.
• Profit and Loss Calculator can show you the possibly profit or loss of trades before you place them or while you are in a trade as the market changes.
• A stock screener to find stocks that you might not be aware of with either pre-defined screens or you can customize your own stock screens.
• Options Strategy Scanner screens over 150,000 options contracts that can help you find the best option trade based on volatility or cost for in-the-money, out-of-the-money or at-the-money.
• An Education Center where you can learn about options, stocks, ETFs, mutual funds and bonds whether you are a novice beginner or a seasoned trader who wants to continue to learn.

And those are just the tools you will have to use at TradeKing. You will also have access to the trader’s forum where you can learn about the most actively traded stocks, options and ETFs and discuss your own trading strategies or learn from others.

They also have a simple and intuitive trading platform that is helpful with even the most complicated option strategies. They guarantee that if your order is not filled at the NBBO (National Best Bid Offer) price, they will refund your commission. 

And those are just the tools you will have to use at TradeKing. You will also have access to the trader’s forum where you can learn about the most actively traded stocks, options and ETFs and discuss your own trading strategies or learn from others.

They also have a simple and intuitive trading platform that is helpful with even the most complicated option strategies. They guarantee that if your order is not filled at the NBBO (National Best Bid Offer) price, they will refund your commission.

The online discount brokerage business is very competitive and it is hard to find many differences in the tools you will get. The main differences will be the prices for options, stocks and broker assisted trades. And more recently, the ability to trade with a mobile device has become important.

TradeKing does not require a minimum amount to open a trading account while many other brokerage firms require several thousand dollars just to start trading or investing. If you transfer your brokerage account to TradeKing, they will refund the transfer fees up to $150.

At TradeKing, you can open a fee-free IRA account or a DRIP account. You can also have check writing and a debit card, but you must have a minimum of $10,000 for this service.

At TradeKing you can invest or trade in stocks, options, mutual funds, ETFs and bonds. TradeKing does not offer the ability to trade Forex, precious metals or futures contracts. You cannot trade stocks with an opening price below .01 cents and you can only trade on the US markets. TradeKing is not only for frequent traders or options; they have also been recognized by Barron’s as a top online brokerage for long-term investing.

You can also trade pre-market and post-market. TradeKing does not have an app yet for Android as some other online brokerage firms do, but you can trade with the iPhone or BlackBerry.

E*Trade is an online brokerage firm and can also be your bank with typical banking options like ATM, mortgages, savings and checking accounts. E*Trade offers a free transfer to and from any other brokerage firm. No fee IRA accounts and no minimums. You can trade futures at E*Trade and trade on markets outside of the US.

At Zecco, you can trade stocks, options, ETFs, mutual funds, bonds, CDs and open an IRA account. Where Zecco differs is the ability to also trade on the Forex currency exchange and precious metals. They have a Forex currency paper trading game that will help you learn the Forex market before you trade real money. They do not seem to have as many of the tools as TradeKing, their trading tools include stock and options screeners, option strategy, research reports and interactive charts.

TradeKing has very good prices for both stock and option trading. The prices for option and stocks trades are:

• $4.95 base cost per trade plus $0.65 per option contract
• If you trade more than 8 option contracts, the cost is $8.95 per trade plus $0.15 per contract.
• If you trade an option spread, the base cost is the same, which means you only pay either the $4.95 or $8.95 base cost for both legs of the spread plus the per option contract cost.
• There are no extra fees for broker-assisted trades at TradeKing like other brokerage firms.
• The cost to trade stocks is $4.95 flat rate.
• If you trade penny stocks under $1.00, there is also a .01 per share fee added not to exceed 5% of the trade value.
• For OTCBB or Pink Sheet stocks, there is a minimum $100 order.

E*Trade has the following prices for stock and option trades:

• $9.99 base price for stock and option trades with $0.75 fee per option contract. If you have at least 150 stock and or option trades per quarter, your base cost goes down to $7.99.
• For a broker-assisted trade there is an additional $45 added to the above prices.

Zecco has the following prices:

• $4.95 for stock and ETF trades. If the share price of the stock or ETF is below $1, then the fee is $6.95 per trade.
• For broker-assisted trades, the fee for stocks and ETFs is then $19.99 per trade.
• Trading options cost $4.95 plus $0.65 per contract. For broker-assisted option trades, the cost is $19.99 plus $0.75 per contract.

Here is a cost comparison of a 1 option trade of 10 contracts (without using broker assistance):

• TradeKing: $10.45
• E*Trade: $17.49
• Zecco: $11.45

Remember, TradeKing gives a lower price for trades of more than 8 option contracts. And any broker-assisted trades would cost much more than TradeKing. There are numerous reasons you might need a broker-assisted trade, like your internet or computer going down.

TradeKing has been in business since 2005, and since that time they have been rated highly and received the following awards:

• Smart Money ranked TradeKing #1 in customer service for customer service and trading in 2011, 2010, 2009 and 2008.
• Smart Money ranked TradeKing the #1 discount broker in 2006 and 2007.
• Barron’s ranked TradeKing #1 in Site Usability
• For three straight years, 2008 – 2011, Barron’s ranking of online brokers awarded TradeKing 4 out of 5 stars in the “Best for Option Traders”, Long-term Investing” and Site Usability” categories.
• Kiplinger’s gave TradeKing the highest rating for “Best Customer Service” of online brokers in 2008.
• In the 2009 Gomez Best of the Web report, TradeKing was recognized as the leader in web site speed and availability.

If you are interested in trading stocks and options, investing, maintaining an IRA or DRIP account and great customer service and trading tools, TradeKing is certainly worth looking into.

Copyright © June 2011 Sam Montana