The Sun's Financial Diary » Brokerage

optionsXpress 5 Free Trades for a New IRA Account

Sun — Wed, 03 Mar 2010 04:01:52 +0000

Here’s another broker promotion for new IRA account.

Online broker optionsXpress is offering 5 commission free trades for a new IRA or rollover IRA account. Eligible IRA accounts include Traditional IRA, Roth IRA, Rollover IRA, and SEP-IRA. If you open an account with optionsXpress before April 15th, 2010, which is the tax deadline, with at least $500, either as bank deposit or securities transferred from another broker, you will receive 5 free trades, valued at $74.75. The free trades will be credited within two weeks after the account is opened and funded in the form of $14.95 commission per trade for the first five trades. The new fund has to remain in the account for at least 12 months, or the credit will be forfeited.

Sure, optionsXpress isn’t really a *discount* broker because its commission is rather high (see discount broker comparison for commissions charged by brokers for stock, options, and mutual fund trades) when compared with others. But there’s one little nice thing about optionsXpress: It also has a referral program that lets you earn 10 free trades for every person you refer to optionsXpress (you can select to receive $100 bonus instead). So if you don’t trade a lot, a couple of referrals will let you trade commission free for quite a long time Also, the broker recently launched a standalone trading platform Xtend, which is pretty cool.

Early, OptionsHouse also offered commission free trades for new IRA account.

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optionsXpress 5 Free Trades for a New IRA Account

Open an OptionsHouse IRA Account and Get 100 Commission Free Trades

Sun — Thu, 18 Feb 2010 03:38:53 +0000

Though it’s still almost two months away from the 2009 tax deadline, April 15, 2010, brokerage firms and mutual fund companies have already rolled out promotions to lure taxpayers to open IRA accounts with them. Among them, OptionsHouse is offering 100 commission free trades if you open an IRA account, such as Traditional, Roth, SEP, or Educational IRA, with the broker before April 15th with promotion code IRA2010 and make an initial deposit of at least $3,000. While the number of commission free trades offered in this promotion are a lot, you only have a limited time to use them. In fact, you only have 60 days to exhaust your free trades or you will lose all unused free trades left in your account after 60 days.

As you may remember OptionsHouse had a 100 commission free trades promotion last year. If you have taken advantage of the previous offer, or you have an IRA account with OptionsHouse, then you are not eligible for this promotion. OptionsHouse charges $2.95 for online stock trade. Check out my OptionsHouse review post and interview with OpttionsHouse CEO to learn more about the broker.

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Open an OptionsHouse IRA Account and Get 100 Commission Free Trades

OptionsXpress Launched Xtend, A Standalone Trading Platform

Sun — Sat, 13 Feb 2010 15:32:26 +0000

When I compared broker web-based trading platforms a while ago, I mentioned that most brokers I am using only have web-based trading platforms, except Scottrade, which also offers a standalone, PC-based platform called ScottradeELITE (available for customers with account balance of $25,000 or more). What I like about the separate program is that it’s much, much more powerful than the web platform. Especially in terms of doing research, ScottradeELITE is more convenient.

Now, another discount broker that I use joined Scottrade to offer a standalone trading program: The Xtend from OptionsXpress.

The first look at Xtend is pretty positive. The interface looks cool and I like how different sections of information are arranged and presented.

At the top of the screen, there are benchmarks that give me a quick idea of how the broad market is doing, including the Dow, the Nasdaq, and the S&P 500.

The main area is where you can customize to display what you want to monitor. The default setting shows my stock watch list, which is the same as the one I set up in my web account after logging into Xtend using the same login info. When I double click a symbol in the Watch List, it opens new window of details of stock.

Right-click on any symbol in the Watch List brings up options to trade the stock, as well as going to OptionsXpress website for real-time streaming quote, which I find is quit weird. Isn’t Xtend the perfect place for streaming quotes?

The central section has all the trade related information, for both stocks and options. Here, I have Trade Ticket, which is the place to enter an order, whether it’s a stock, options or future, all those trades offered by OptionsXpress. There’s also an Options Chain section for options trading which I am not very familiar. Finally, all the stocks I have in the Watch List also show in the Trade View. Here, trading can be made with only a few mouse clicks, which is quite convenient.

On the right, I have account related information, such as Account Balance and Positions.

At the bottom of the screen, there are a lot of tools from OptionsXpress that can be added to the main window. For example, I added Charts into the left column to display the price change and volume of a stock for the past two days. Another feature of Xtend that I noticed is that when the program is running, it displays pop-up alerts when stocks’ gain or decline reach certain levels. The alerts I saw were set as default. I think they can be customized to only show what I am interested, but I haven’t found out how to do it.

From the first look, I feel that Xtend looks better than ScottradeELITE, though I haven’t full explored all its functions yet, nor did I make any trade. If you are interested in opening an account with OptionsXpress and trying Xtend out, you can take advantage of the OptionsXpress $100 bonus offer if you fund the account with at least $500 and make 3 trades in 12 months.

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OptionsXpress Launched Xtend, A Standalone Trading Platform

Fidelity Reduces Trading Commission and Offers Commission-Free iShare ETFs

Sun — Tue, 02 Feb 2010 22:06:04 +0000

This is what competition is about.

Early last month, Charles Schwab reduced the commission for online equity trading to $8.95 per trade from the original price of $12.95. The move, as an recent article on Barron’s noted, could trigger a new price war in online trading. Now, there’s a strong evidence that the war may have indeed started after mutual fund giant Fidelity announced today that it’s also cutting online trading commission and offering commission-free trade of iShare ETFs to its customers through its brokerage unit starting February 3, 2010.

Effective tomorrow, the new commission for online equity trades is $7.95 per trade, regardless the number of shares and trading frequency. The new price is lower than what Schwab charges for online stock trading and only slightly higher than discount broker Scottrade’s equity commission (currently at $7.00/trade). Meanwhile, Fidelity also said today that it will offer commission-free trade of 25 iShare ETFs through Fidelity.com, Active Trader Pro, Wealth-Lab Pro, or through Fidelity’s wireless channels. iShare ETFs that are eligible for commission-free trades cover three categories: domestic equity index funds, international equity funds, and fixed income funds.

U.S. Equity Index Funds

Russell 1000 Growth (IWF)
Russell 1000 (IWB)
Russell 1000 Value (IWD)
Russell 2000 Growth (IWO)
Russell 2000 (IWM)
Russell 2000 Value (IWN)
Russell 3000 (IWV)
S&P 500 Growth (IVW)
S&P 500 (IVV)
S&P 500 Value (IVE)
S&P Mid Cap 400 Growth (IJK)
S&P Mid Cap 400 (IJH)
S&P Mid Cap 400 Value (IJJ)
S&P Small Cap 600 Growth (IJT)
S&P Small Cap 600 (IJR)
S&P Small Cap 600 Value (IJS)

International Equity Index Funds

MSCI ACWI (ACWI)
MSCI EAFE (EFA)
MSCI EAFE Small Cap (SCZ)
MSCI Emerging Markets (EEM)

Fixed Income Funds

Barclays Aggregate (AGG)
Barclays TIPS (TIP)
iBoxx $ Investment Grade Corporate (LQD)
JP Morgan USD Emerging Markets (EMB)
S&P National AMT-Free Municipal (MUB)

Now that both Schwab and Fidelity have lowered their stock commissions and offered some extra for free for their customers, I hope that other discount brokers, especially Scottrade which has the closest commission to that of Fidelity, will also do something similar to reduce trading cost. Will that happen? I don’t know. But if more firms join Schwab and Fidelity to lower their trading fees, discount brokers will feel the pressure and that will be good news for us

Photo credit: Kongharald

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Fidelity Reduces Trading Commission and Offers Commission-Free iShare ETFs

ChoiceTrade: Another Discount Stock & Options Broker

Sun — Thu, 21 Jan 2010 20:14:23 +0000

ChoiceTrade, headquartered in Central New Jersey, is another online discount broker which offers stock and options trading at a discounted price (ChoiceTrade is one of the discount brokers highlighted in my discount broker comparison post). The current trading commission at ChoiceTrade is $5 per online stock trade with no limit on the size of the order, at the same level as TradeKing’s commission ($4.95/trade). Commission for options trading costs $0.99 per contract. However, there’s a minimum of $8.95 per lag on options trading. There’s a $25 surcharge for broker-assisted trades for equity or options. There’s no minimum balance requirement to open an account. However, if you want to get streaming quotes or use their standalone trading software, there will be additional cost.

ChoiceTrade Trading Platforms

Unlike other discount brokers which offer only one web-based trading platform, you can have multiple choices on how to trade with ChoiceTrade, including both web-based and standalone platforms (ChoiceTrader Select). The web-based platform is free of charge, like any other web-based trading platform. It will give you real-time quote (a snap shot), but not the streaming quotes, which you can get from other brokers like Scottrade, Firstrade, and TradeKing. For ChoiceTrader Select, which offers all of the services of the online platform plus direct access trading, advanced order entry, and algorithmic trading, there will be a $60 monthly fee.

Free ChoiceTrade Trading Simulator

ChoiceTrade’s FREE online trading simulator allows you to try out our online platform and test trade in a real-time, simulated trading environment. You can test your option and equity strategies without opening an account and without risking any capital.
The trades are 100% simulated so that your trading capital is never at risk. The executions have been simulated as well to reflect the fact that sometimes you will be filled immediately and other times you won’t, depending on market conditions. When an order is not executed you will be able to cancel or modify the order.

Real-Time Data Stream

As mentioned above, you will get real-time quote with the free web-based platform. However, to get real-time streaming quotes, you will need to subscribe to data feeds through streamer platforms, which are priced as the following:

Data Feeds

Web-based
Basic Streaming platform

ChoiceTrader Select Platform with eSignal

Base Monthly

$14.95

$23.95

$126 ($46 off reg. price)

Streaming/Polling

Streaming
as-it-happens

Nasdaq, Amex, NYSE Level 1

Included

Options

Included

NASDAQ Level 2

$10

Included

NASDAQ TotalView

N/A

ARCABook

$10

NYSE Open Book

N/A

$60

Dow Jones Newswire

$110

$115

Pink Sheet Level 1

Pink Sheet Level 2

$12

Time and Sales

Advanced Charts

Mobile Version

If you make 5 trades or more per month, you can get the basic streaming for free.

Promotions

Right now, ChoiceTrade is offering $50 bonus for any new account opened before February 5, 2010 using promotion code JA50CT. In addition, you can also receive basic streaming for free for 4 months, as long as you maintain the account balance of $2,000 at any time through the free trail period.

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ChoiceTrade: Another Discount Stock & Options Broker

Schwab Reduces Online Stock Trade Commission to $8.95

Sun — Thu, 07 Jan 2010 18:02:10 +0000

Full service broker Charles Schwab announced today (press release, PDF file) that it is reducing commission for online equity trades. Starting January 19th, Schwab customers will pay a flat $8.95 commission for each online stock trade, regardless the number of shares. The current commission schedule charges $12.95 per stock or ETF (exchange-traded fund) trade if the customer trades less than 120 times in a calendar year, plus extra fee for trading more than 1,000 shares in each order. If you have more than $1M assets with them or trade 120 times or more a year, you already pay the reduced commission, but the bar is rather high for small investors. Under the new pricing plan, the commission for automated phone trades is $13.95 (online commission + $5) and broker assisted trades $33.95 (online commission + $25).

Schwab has made some big moves lately to be more competitive. Early last year, it introduced Schwab Invest First credit card that allows cardholders to move cash backs (at 2% which is quite generous) earned from using the card into Schwab brokerage account so they can invest the money. Later it cut expenses on some of its index mutual funds, making them even cheaper than similar offers from Vanguard. At the end of the year, it launched some extra-cheap ETFs to compete with Vanguard and iShare, etc.

When I compiled a list of discount brokers with cheapest commissions last year, I excluded Schwab because at $12.95, I didn’t consider it as a discount broker. Now that it is reducing the fee to $8.95, Schwab will get a spot in the list. That said, is Schwab a discount broker? Well, not according to my standard. For example, you can trade stocks and ETFs at lower commission rates at :

Scottrade: $7.00/trade
Firstrade: $6.95/trade
TradeKing: $4.95/trade
Zecco: $4.50/trade
SogoTrade: $3.00/trade
OptionsHouse: $2.95/trade

There’s no doubt that the new, lowered commission will attract new customers to Schwab, especially those who are interested in Schwab’s mutual fund and ETF products (there’s no commission to buy Schwab mutual funds through its brokerage account), but I feel the change will benefit more to their existing customers. For me, I don’t see myself switching to Schwab any time soon, if at all. I am still happy with the brokers I am using right now and commission cost is one of the most important factors when deciding which broker I want to use. At $8.95/trade, it’s still not cheap (since Schwab is a full service broker, its overhand should be much higher than its smaller rivals, which will prevent it from reducing the commission too much IMO).

Photo credit: TheTruthAbout…

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Schwab Reduces Online Stock Trade Commission to $8.95

OptionsHouse Introduction: An Interview with CEO George Ruhana

Sun — Thu, 10 Dec 2009 14:30:39 +0000

OptionsHouse in an online discount broker which offers investors a wide range of products and services at competitive prices. I first knew the broker in April, then opened an account for myself in June (a $1,000 account minimum is required) and made a couple of trades. The reason I wanted to trade with OptionsHouse was that at $2.95 per trade for stocks, it charges the lowest commission among brokers I am currently using. Then, after getting my own account, I was also very impressed by their web-based trading platform.

Though OptionsHouse has been around for a couple of years already, it’s still relatively new to many people. Here on this blog, I also have talked about the broker quite often, mostly from the perspective of my personal experience, but I think it’s better to have a comprehensive introduction of OptionsHouse to readers who are not yet familiar with it so they can have a better idea about the broker and what it offers. With the help from Shannon Paul at PEAK6, I recently had an opportunity to have an interview with OptionsHouse CEO George Ruhana to discuss the firm’s products and services and its recently pricing change.

Q: To many investors, OptionsHouse is still quite new. Can you give us an introduction of the firm and its products and services? The name may suggest that OptionsHouse is a place for people to trade options. That’s not the case obviously.

A: OptionsHouse will celebrate its 3rd anniversary of being open to the public in January. It is a wholly owned subsidiary of PEAK6 Investments, L.P., which is one of the largest proprietary options trading firms in the United States*. OptionsHouse offers its customers a platform mainly for stock and options trading. We offer tools that help people find options based trading ideas, evaluate risk of either a single trade or a whole portfolio, and the ability to research stocks from either a fundamental or technical point of view. Execution is fast** and the platform is customized for ease of use of our customers. We also offer a fully functional virtual trading environment to let people practice before they use real money for strategies. OptionsHouse has recently released a full featured mobile trading platform as well.

Q: What are the distinctive advantages of OptionsHouse?

A: OptionsHouse has advantages because of its roots with PEAK6. We leveraged the years of building proprietary trading platforms to design the options chain and execution format. Because we did not have to start from scratch, we have the luxury of charging some of the best rates in the business. There is a lot of infrastructure that we use from PEAK6, rather than having to build or buy from somewhere else.

Q: Who’s the targeted audience of OptionsHouse?

A: OptionsHouse targets active retail traders. On average, our customers place 100 trades per year. Their trades are much more options based than a typical retail brokerage. Because our rates for larger trades are competitive, we have average trade sizes and account balances much above the typical retail firm. Stock traders also find us easy to use, but the base skews more towards options because of that functionality.

Q: At $2.95 per trade, OptionsHouse is cheap compared with other discount brokers. How can OptionsHouse keep its trading cost low?

Again, we did not start from scratch. When you set out to build a web based brokerage platform, it helps to be able to do so with things like data feeds, back office expertise, trading platform design, and execution capabilities already available to you. We tailored things to the retail base rather than recreating the wheel. Our customers have the advantage of getting that experience at a discount.

Q: People hate bait and switch, as it happened to other brokers before. Does OptionsHouse plan to keep its commission at the current level?

A: No one can predict the future or how the market will change. However, at this time there are no plans to modify the pricing structure again in the near future. Remember, we kept our pricing consistent (except for lowering both spread and stock pricing) for almost 3 years. It is not like we have a track record of doing this all the time.

We recently had changed our rates for a couple of reasons: first, we want to be the best overall value of product and price for all customers, and we think the added flexibility of multi-tier pricing allows us to do that. Many existing customers are getting a price cut with this plan at OH. Secondly, payment for order flow rates declined significantly this year, which made some high volume trades money losers for us without the change in structure. We had to make our pricing realistic long term with the new market realities.

Q: Is it easy to open an account with OptionsHouse? Is any paperwork required?

A: Simply go to www.optionhouse.com and click on the “open an account” located on the top right hand side of the page. From there you simply choose which type account suites your needs, be it an IRA, Margin or a Joint account. Once you’ve chosen the type of account, you enter your information as prompted and finalize the application by printing the agreement, signing and sending it in. If you are not able to print it, OptionsHouse will send the agreement to you so you can sign and send back. It’s that simple. If you need help, you always have to capability of calling, emailing or chatting live with one of our customer service members who will walk you through the steps in getting you signed up.

Q: OptionsHouse recently updated its pricing for options trading. Can you explain the new policy to us?

A: Customers have the flexibility to choose the plan that best suits their trading style and strategy. There are no trade frequency, trade size or account asset minimums. Customers have the ability to change their rate plan once per day. One plan caters to customers who generally trade less than 10 option contracts per ticket called “5 for $5″. With our up to 5 for $5 rate, customers actually pay 50% less than with the previous flat-rate commission schedule for trades with 5 contracts or less. Single-leg trades will be $5.00 for up to 5 contracts. Spread trades, up to 10 contracts, will be priced at $10.00. The per-contract charge, for additional contracts is only $1.00. The second plan is more for the customer who generally trades more than 10 contracts per ticket. In this plan, single-leg trades are $8.50, plus 15 cents per contract. Spread trades are $12.50 plus 15 cents per contract. Our new structure allows OptionsHouse to continue to be the leader in the industry for larger orders. For example, at OptionsHouse 250 contracts are only $46.00 compared to $200.49 at E*Trade, $207.45 at Fidelity and $375.00 at optionsXpress.

Q: Is trading with OptionsHouse safe? What security features does it have?

A: Yes, we are extremely conscious of our customer’s security and trading with OptionsHouse is secure. All activity done after logging in happens over a secure SSL connection. Customer account data is stored in a protected network to safeguard access to any sensitive customer information.

From an insurance perspective, OptionsHouse is a member of SIPC.3 SIPC protects against the insolvency of a brokerage firm, but does not protect against market loss. SIPC will cover the securities of customers of its members up to $500,000 of which $100,000 can be cash. Additionally, our clearing firm holds insurance above SIPC coverage of ($200,000,000 in the aggregate) over all customer accounts, subject to a maximum limit of $900,000 per customer in respect to cash.

Q: Does OptionsHouse offer any free tools to educate investors and help them make better investment decisions?

A: We have a whole site full of things to help people make better decisions. First, our Research Tab allows people to look up events, fundamental data, and technical analysis on all stocks. Second, our options focused tools help people judge the probability that certain strategies make or lose money, the estimated P&L of positions, searches for call spreads, put spreads, covered calls, and even sorts for stocks by different fundamental criteria. Our suite of risk management tools lets customers look over their portfolio in one place to judge overall risk. Finally, we have a library of written and video content that customers can use to educate themselves on various options trading strategies. It is a great place for people interested in options to start to get educated for FREE. They can learn about strategies and practice them in our virtual environment.

Q: Will I talk to a real person when I call customer service for any questions about my account or my trade?

A: OptionsHouse customer service representatives are available toll free from 7:00 am to 6:00 pm CT, Monday through Friday (except exchange holidays) to answer all of your account questions. You can reach them on the phone 877-653-2500 ext. 2, email customerservice@optionshouse.com or chat live concerning any questions you have. For trade related questions you can reach the OptionsHouse trade desk at 877-653-2500 ext. 1 Monday through Friday 7:30 am to 4:00 pm CT. Also, we do not charge extra if you need to make a broker assisted trade.

Q: A little personal experience. I recently had to update my mailing address, but I couldn’t find how to do it in my account online. So I called and was told that I have to either fax the update or send an email. That’s not very convenient. In fact, I find I can’t do much account maintenance in my account. Any plan for an upgrade to make it more user friendly?

A: We always appreciate getting customer feedback concerning our sign up process, platform and account management. We definitely want to address this by the end of the first quarter of 2010. It is on the list of customer experience upgrades that we will be performing.

Q: The brokerage industry is very crowded. How does OptionsHouse compete with other established discount brokers? Where do you see OptionsHouse in the near future?

A: Even though we are considered “newer” in the brokerage space, OH brings a host of strengths with it. Our parent company, PEAK6 Investments, L.P. (“PEAK6″), is a large player in the options and stock trading businesses, and has a lot of capital available to invest in OptionsHouse. PEAK6 is not just building it to sell it. They have been in the business for over 12 years, and plan on being in the equity space for years to come.

PEAK6 has expertise in the options industry that only a few firms in the world have. This is a huge advantage as options trading becomes more mainstream, and a driver of growth in the brokerage space.

I think that over the next year you will see OptionsHouse expand some of its product offerings into things such as futures. We continually work on making our educational materials even more compelling for investors and considering our growth rate we will become a more every day name in the business.

Q: Finally, do you have any advices for investors in this economic environment?

A: I don’t think my advice for customers changes much: be disciplined, and be willing to exit a position that does not work. Understand your risks before entering a position. Before becoming CEO of OptionsHouse, I was a professional trader for 15 years. All traders, retail and professional, are going to make losing trades. There is nothing wrong with that. However, not understanding things before trading them is an easy way to lose a lot of your money. Use virtual trading and practice different trading styles to find the one that fits you as a trader. Educate yourself on the market as much as you can and take advantage of all the free educational sources out there.

Well, that concludes this interview. Thanks George and Shannon for this opportunity!

To find out more about the broker, go to OptionsHouse and read their FAQ section. If you are interested in getting an account, OptionsHouse is currently running a 100 commission free trade promtion for a new account before the end of the month. If you have any other questions, just leave a comment and I will pass them to OptionsHouse.

*PEAK6 Capital Management LLC traders have bought and sold hundreds of millions of option contracts over the past ten years.

**System response and access times may vary due to market conditions, system performance and other factors.

***Member of SIPC – which protects the securities of customers of its members up to $500,000 (including $100,000 for claims for cash). Explanatory brochure available upon request or at www.SIPC.org. As a member of the Securities Investor Protection Corporation (SIPC) funds are available to meet customer claims up to a maximum of $500,000 in cash and securities with a $100,000 cash maximum. Additionally, our clearing firm holds insurance above SIPC coverage ($200,000,000 in the aggregate) over all customer accounts, subject to a maximum limit of $900,000 per customer in respect to cash. This “insurance above SIPC coverage” protection is in addition to the protection provided by the Securities and Investors Protection Act, which is administered by SIPC and is subject to certain conditions and limitations, details of which are available upon request. Note that SIPC and insurance above SIPC coverage provides coverage against loss of securities and cash through the insolvency of a brokerage firm, not against market depreciation, fluctuation in market value of your securities or trading losses.

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OptionsHouse Introduction: An Interview with CEO George Ruhana

optionsXpress Trading Platform Review

Sun — Tue, 01 Dec 2009 14:53:53 +0000

This is the third segment of the broker trading platform review series. So far I have covered Scottrade and Firstrade. Today, I am going to take a look at another online broker, optionsXpress. I mentioned early that, though I have an account with optionsXpress for nearly 2 years, I didn’t make any trades with optionsXpress until recently. The reason for not using it is quite simple: Unlike Scottrade and Firstrade, I don’t consider optionsXpress as a true discount broker. It’s quite expensive to trade with optionsXpress actually. Nonetheless, the broker has some features that are worth a look.

optionsXpress Commission

Yes, it is rather costly to trade stocks with optionsXpress. Currently, the broker charges $14.95 for each stock trade for up to 1,000 shares. If you trade more than 1,000 shares, the commission changes to $0.015 per share. If you trade 9 times or more, then the commission drops to $9.95 per trade, still very expensive. If you want to use optionsXpress to trade options, the fee is $14.95 for every contract if you trade less than 35 times a quarter.

In addition to stocks and options, optionsXpress offers mutual funds, also at $14.95 per trade. As I mentioned a number of times before, buying mutual funds from brokers is not the best way to invest in mutual funds because they all charge very high fees with almost no exception. To avoid such hefty fees, go with the mutual fund companies directly instead.

optionsXpress Trading Platform

In addition to the main web interface where you can find standard information such as account value and positions, optionsXpress also has a customizable interface called MyOX.

With MyOX, you have the flexibility of choosing what you want to see in your account, eliminating unwanted contents from the interface as those I see in Firstrade. On the default MyOX page, I have such basic information of my account as balance, positions, orders, stock/options watch list, and a quote of stock that’s not in the watch list. But that’s not all it offers. In fact, I can add a new tab if I want to have more contents, like charts, options chain, financial news, RSS feed, etc, though they will not be on the same page.

And like many other web-based trading platforms, trading can’t be done directly in the main optionsXpress page. To make a trade, you will need to click the Trade button at the top, select whether it’s a stock or options you want to trade, and go to a different page where you can enter your order information. However, if it’s a stock that’s already in your Watch List, you can trade right from the Watch List. The Watch List itself is also customizable, so you can choose see. The default setting includes Symbol, Last, Bid, Ask, Change, and Actions (Trade). With other web-based brokers, the quotes of those stocks either in the holding or watch list are usually not updated unless you manually refresh the screen. Not so with optionsXpress. At the bottom of optionsXpress Watch List, there’s a check-box where you can choose to Auto-Refresh the list. From what I noticed, the frequency is quite high.

optionsXpress Streaming Quotes

optionsXpress also offers web-based streaming that will give you quotes in real-time.

What I like about this tool is that stocks in the Watch List are added to the real-time quote window automatically, so you don’t have to enter the symbols again. This feature is what Socttrade and Firstrade streaming quote tools don’t have. If you want to trade a stock in your Watch List from the quote window, you can simply double-click the symbol from the list and the stock will be added to the order form underneath the quote list, where you can also find more detailed information about the stock , where trades can be made right from the streaming quotes window. It’s really convenient. And those symbols that you added to the Watch List from the streaming quote will also appear in your Watch List in the web page.

Other Tools

I have talked about optionsXpress’s Virtual Trading before. But that’s not the only tools that optionsXpress offers. In fact, the broker has a wide range of tools that help investors make better investment decisions.

Obviously, you will need to really use all those available tools to fully explore what are offered by optionsXpress, that’s something I haven’t done yet.

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optionsXpress Trading Platform Review

SogoTrade 100 Commission Free Trades Promotion

Sun — Fri, 27 Nov 2009 15:38:10 +0000

Looks like online brokers are running a lot of promotions these days to attract new customers.

SogoTrade is offering 100 commission free trades for every new customer. It’s quite easy to get the free trades: Open a SogoTrade account; fund the account with $500; receive the bonus. There is a restriction on the free trades though. The free trades must be used within 30 days after the account is funded, or they will expire.

On one hand, the offer is quite generous because the total value of the offer is $300. That’s much better than promotions from other brokers (OptionsHouse also offers 100 free trades). On the other hand, how many investors, especial small investors, can make 100 trades in 30 days?

SogoTrade Commission

I first looked at SogoTrade nearly three years ago, when the broker was offering scheduled investment plans, like those you get from ShareBuider. At that time, before there was Zecco and OptionsHouse, I concluded that the it was quit cheap to trade with SogoTrade. It appears that with so many discount brokers competing for your business, SogoTrade remains a solid option for trading stocks for less.

So how much does it cost to trade with SogoTrade?

SogoTrade is very competitive in terms of commission. It charges $3.00 per internet equity trade, regardless the number of shares. From what I know, the commission is only higher than what OptionsHouse charges at $2.95/trade, but much lower than the fee at other widely used discount brokers like Zecco, TradeKing, and Scottrade. For options trading, there’s another $0.70 for each contract.

SogoTrade doesn’t charge any fee if the account is in dormant mode and, unlike other brokers, it doesn’t charge a fee if you are not happy with SogoTrade and want to transfer the account to somewhere else. The transfer usually costs $50 at other brokers. But this is not the only benefit. If you like Sogotrade and want to transfer your account at another broker to SogoTrade, you will get reimbursed for the account transfer fee charged by the other broker up to $100 if the account balance is $25,000 or more.

So, what do you think about SogoTrade and this 100 free trade promotion offer?

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Buy Foreign Stocks: E*Trade vs. Fidelity

Sun — Thu, 12 Nov 2009 15:11:29 +0000

When E*Trade launched its global trading platform in 2007, I saw it as an opportunity to finally be able to buy some internationals stocks that are not otherwise available to retail investors in the U.S. At that time, Chinese stocks were as hot as they could be and buying Chinese stocks seemed to be the easiest way to quick money. As I still remember, in 2007 many top-performing mutual funds were those invested in China. Though I already own a China fund, the PowerShares Golden Dragon Halter USX China (PGJ) which also did quite well, I wanted more. So when E*Trade Global Trading became available, I jumped in shortly and bought two Chinese stocks that are traded in Hong Kong: Industrial and Commercial Bank of China (ICBC) and Alibaba.com. However, China stock market crushed after reaching the all-time high in October 2007 and stocks traded in Hong Kong were not immune to the catastrophe. Even though the markets, in both China and Hong Kong, have recovered a lot this year, my investments were a mixed bag: ICBC is doing quite well but Alibaba is a big disappointment.

Anyway, my investments are not what I want to talk about here. It’s the platform that allows ordinary investors to buy stocks traded on exchanges outside the U.S. Until last week, the only broker that lets investors invest in international stocks directly is E*Trade as far as I know. But now, it has a competitor. On October 30th, Fidelity introduced its own international stock trading platform as the appetite for investing in foreign stocks grows. The move puts Fidelity in direct competition with E*Trade. So how are these two compared against each other? I took a quick look at Fidelity’s new platform and the following are what I found.

Eligibility

I opened my E*Trade Global Trading account without any eligibility issue. At that time, I didn’t have any account with E*Trade and there was nothing that prevented me from getting the account. However, that doesn’t seem to be the case with Fidelity, which requires to have a non-retirement account that trades 120+ times per year and $25,000+ in assets, or
$1 million in household assets. Well, I have to say that the requirement is very high for a small investor like me. I may like Fidelity better than E*Trade, but I am not eligible to have Fidelity International Trading account for sure.

Foreign Markets

If you are eligible for trading with Fidelity International Trading, then you do have a wider selection of foreign markets offered through the platform. In addition to Canada, Hong Kong, France, Germany, Japan, and United Kingdom that are available at E*Trade, Fidelity also provides investors access to six more developed markets: Australia, Italy, Belgium, Netherlands, Norway, and Portugal.

Commissions

My biggest concern when trading stocks is how much a trade is going to cost me, whether it’s a domestic stock or a foreign equity. I am always looking for the cheapest brokers. However, there’s no such thing as cheap in foreign stock trading. It cost me a lot to buy ICBC and Alibab with E*Trade. Here how much Fidelity and E*Trade charge to trade in a particular market:

Country	Fidelity	*ETrade**
Japan	3,000 JPY	3,399 JPY
Canada	19 CAD	19.99 CAD
France	19 EUR	19.99 EUR
Germany	19 EUR	19.99 EUR
HonKong	250 HKD	299 HKD
United Kingdom	5 GBP	9.99 GBP
Australia	32 AUD	N/A
Italy	19 EUR	N/A
Belgium	19 EUR	N/A
Netherlands	19 EUR	N/A
Norway	160 NOK	N/A
Portugal	19 EUR	N/A

So basically, E*Trade charges a lot more in commission than Fidelity does. However, if you are like me, who wants to buy foreign stocks but don’t like a lot of money to meet Fidelity’s requirement, then E*Trade is the only choice, despite the high cost.

Currencies

When I bought those two stocks through E*Trade two years ago, I had to convert my fund into Hong Kong dollars before I could use the money to purchase the shares because E*Trade requires all trades be conducted in local currencies. At Fidelity, it seems that things a little more flexible as you can settle your trades in both local currencies and U.S. dollars. But, there is a price on settling with U.S. dollars. According to Fidelity,

If you choose US dollars as the settlement currency for your international stock trade, a foreign currency exchange fee (in the form of a mark up or mark down) based on the size of the currency conversion will be charged when the foreign currency exchange executes.

So you still have to pay for converting local currencies into U.S. dollars, not that Fidelity will do it for you for free. Thus, Fidelity recommends that if you trade in a particular market very often, it’s better to exchange “a certain amount of currency to avoid currency exchange fees on each trade”.

Currencies Exchange Fees

Since you may need to convert your U.S. dollar into the local currency before making a trade with either E*Trade (required) or Fidelity (recommended), another cost of buying foreign stocks is the fee that you pay to make the conversion. I wasn’t able to find the exact mark-up at E*Trade, but last time it cost me $11 to convert $1,000 to Hong Kong dollars. At Fidelity, the more money you convert, the less fee it charges. For $100K or less, the fee is 1.0% of principal. So if I exchange $1,000 into Hong Kong dollars, pretty much the same as what E*Trade charges. However, I am not sure whether the fee is also proportional to principal at E*Trade as the information is not available.

Well, from what I have seen, even though it costs more to trade with E*Trade, but it is still an affordable choice if you want to invest in foreign stocks unless you have a lot of money to be eligible for Fidelity’s International Trading.

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How to Open an OptionHouse Account

Sun — Sat, 07 Nov 2009 15:26:47 +0000

As you may know, discount broker OptionsHouse is currently running a promotion which gives 100 commission free trades for every new customer with $3,000 deposit. This is a good deal if you can get the most out of the offer, even though trading 100 times in 2 months (the free trades will expire 60 days after the account is funded) is pretty tough for anybody.

Anyway, since I already have an account, I won’t be able to take advantage of this offer. But if you are interested in getting the free trades (valued at $295), here’s the information you need to open an account.

There are a total of nine steps to go through in the process. At first, you need to select the type of account you want to have, individual or joint account. Then you will need to create a profile by providing your email address and selecting a user name and password. You will use the user name and password to log into your trading account once it is established. The other information are pretty standard, such as employment and financial information.

After you agree the terms and conditions, you will need choose how to fund the account in the next step. OptionsHouse offers several options to make deposit to the account, by wire, ACH, check or ACAT account transfer (OptionsHouse can reimburse up to $100 account transfer fee). If you are not planning to transfer your account from another broker to OptionsHouse, then ACH may be a better choice. To set up ACH, you will need your bank’s routing number and your account number. And as you know, it takes some time to set up ACH transfer. OptionsHouse uses trial deposits to verify bank account ownership which takes a couple of business days.

The online application process is rather simple, but the application isn’t completed yet. Once you finish the online process, you can log into your account immediately. However, you will need to printout you finished application form and fax it to OptionsHouse before your account becomes active. If your account isn’t active, you won’t receive real-time streaming quotes (of course, your account also has to be funded).

Now that you know the whole process, are you ready to open an OptionsHouse account and get the 100 free trades?

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Firstrade Trading Platform Review

Sun — Mon, 02 Nov 2009 14:35:10 +0000

Early last week, I took a look at Scottrade trading platform because it’s the broker that I use the most for stock trading (not that I trade a lot). As you know, Scottrade isn’t my only stock broker. In fact, it is one of many brokerage accounts I own. Another *old* account I have is Firstrade. Though I don’t use Firstrade as much as I do with Scottrade, I still keep the account alive and trade only when I receive referral bonuses from referring new customer to the broker.I have discussed Firstrade briefly in my broker interface comparison post. Now I am going to expand the discussion a little bit, like I did with Scottrade.

Firstrade Commission

Firstrade, as a leading online discount broker, offers investors a wide range of investment products, from stock and options trading to mutual fund and fixed income investments. When I first opened my account with Firstrade, I was actually attracted to it by its free mutual fund trading. Unfortunately, that’s not the case any more.

The cost of trading with Firstrade is rather high compared with what other discount brokers charge. For example, the commission for stock trade is $6.95 at Firstrade, which is lower than Scottrade’s $7.00 per trade, but significantly higher than Zecco’s $4.50 commission and TradeKing’s $4.95. Options trading at Firstrade will add another $1.95 per contract, where at Zecco and TradKing, the extra cost is $0.50/contract. However, Firstrade does have an edge over these brokers when it comes mutual fund investment: Firstrade $9.95, Zecco $10.00, TradeKing $14.95, and Scottrade $17.95 for each no-transaction fee mutual fund order.

Firstrade Trading Platform

So what can you expect to see when you first log into your Firstrade account?

Firstrade’s main website isn’t very impressive and I find it also not very useful. At the main account page, I expect to see the status of my account and my holdings so I can have a clear idea of how my account is doing. But that’s not the case with Firstrade, as you can see from the above screenshot. What I really don’t like about Firstrade’s account main web page is that the Important Notices section, which is supposed to list important announcement to users, takes a large space right in the center of the platform. I don’t find those notices very important at all and many of them are outdated and rarely updated. In my opinion, that place can be used for information that’s more useful for investors.

Overall, I can’t do much on the account homepage alone because, as you may have noticed, what displayed on the homepage are not all related to trading, or even investor’s personal account information. There are only four pre-determined indices and two index charts to display. There’ s a list of stocks to watch, but it looks like I can only enter up to seven symbols. There’s even no list of positions on the homepage, only an account number with the current market value.

Other Tools

If you want to make a trade, you will have to go to a different page to place your order by entering transaction type (buy or sell), symbol, shares, and order type (market or limit). This is the same as most other web-based trading platforms. Though there’s no streaming quotes on its homepage, Firstrade does have another tool, called X-Stream, that provides real-time streaming quotes, which can launched by clicking the Real-time Streaming on the top right corner of the main page.

Firstrade’s java-based X-Stream tool allows you to track up to 20 stocks simultaneously (I’d say 20 is a quite small number). Every field and color is fully customizable and all quotes are updated in real-time as the market moves. In addition to quotes, you also have access to streaming charts with real-time technical analytics, streaming time and sale information, quick order entry, company profiles, and many other features. What I find weird is that though there’s a TRADE button in X-Stream, I can’t really trade from it. If I click the button, it takes right back to the same web page to make the trade. Not very convenient at all.

In addition, Firstrade also has another tool that allows you to track multiple portfolios in real-time and updates your profits or losses on each position and the entire portfolio in real-time without having to refresh. It’s called MarketAce Portfolio Manager. MarketAce shows you to track each stock’s performance for that day and from the purchase price. You can specify your portfolio name and customize all the positions for each portfolio. You may also enter the cash balance of your portfolio to get the total value of your account updated in real-time. This is a unique tool to Firstrade as far as I know.

So overall, Firstrade isn’t very competitive in terms of trading cost, unless you also want to buy mutual funds through the broker. However, it does have some features that you won’t find at other brokers. If you are interested in trading with Firstrade, the broker is running a triple-bonus promotion that will give you 100 free trades when opening a new account, plus $100 account transfer reimbursement (if you transfer from another broker to Firstrade) and $100 cash back, depending on your account value. Check it out to get more details on how you can earn the bonuses.

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OptionsHouse Promotion Code for 100 Free Trades

Sun — Sat, 31 Oct 2009 19:25:18 +0000

OptionsHouse is one of the discount brokers that I have an account with.

I opened the account in June when I found that it charges only $2.95 per stock trade, much less than other brokers I use (Zecco offers free trade, but the requirement is rather high for small investors). However, it disappointed me when I found during my first trading experience that the broker required at least $100 be kept in the account to cover commission cost. I even wrote a post to complain about what I saw as a unfair and unnecessary requirement. Later on, OptionsHouse, after hearing similar complains from other investors, decided to remove the $100 minimum requirement, which was a welcome news as it means that every dollar in the account can be used to buy stocks. And at $2.95/trade, the commission is the lowest among other popular online discount brokers such as Scottrade, TradeKing, or Firstrade.

If you are considering open an OptionsHouse account, now there’s a good opportunity for you to do so. The broker is running a promotion for November and December which will give each new customer 100 commission free trades when a new account is opened during the promotion period with a minimum of $3,000. Sure, the account minimum is higher than what it usually requires for a new account at $1,000, but the value of the 100 commission free trades equals $295, so it’s still a very good deal if you have the money to meet the minimum requirement. One more restriction of this promotion is that the free trades have to be used within 60 days. That’s a lot of trades you will have to make in just two months to take the full advantage of the promotion if you are not a heavy trader.

Anyway, if you can use those free trades, or even a portion of it, you must use this link to open an account using promotion code FREE100 and fund your new account with $3,000 within 45 days of account opening in order to receive the bonus free trade. This offer will expire on December 31, 2009.

To learn more about OptionsHouse, check out my previous post on OptionsHouse review and first trading experience for details. Using one of the following Options House promotion codes to open an account and start to experience the difference at OptinsHouse.

Promotion	Description	Expiration
Flat $2.95 per Trade	Buy stocks/ETFs at $2.95 per trade, regardless whether it’s a market or limit order.	N/A
Trade options with OptionsHouse for $9.95	OptionsHouse ranked #1 in Barron’s 2009 Online Broker Survey and it’s named the Best For Options Traders. Open an account and experience the difference.	N/A

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Transfer Fund to Scottrade Brokerage Account Is Easy

Sun — Fri, 30 Oct 2009 18:01:20 +0000

The stock is down pretty badly so far today. For some investors, this is an opportunity to buy stocks at a better price, given that the market was down four out of the six trading sessions. Suppose that you see a stock that you have wanted to buy and today it finally reaches the price you want, can you buy it right away with your broker if you don’t have the money ready and have to transfer the fund from your bank account to your brokerage account to make the purchase?

I have a bunch of brokerages accounts myself. Though I no longer actively use every one of them now, I did try every one in the past to make a trade. And from my experience, transferring fund from my bank account to the brokerage account and using the money to purchase the stock I want on the same day is NOT possible at other brokers except Scottrade. As far as I know, brokers like TradeKing, Firstrade, and Zecco are all having electronic fund transfer (ACH) as an option to fund the account. However, the ACH fund transfer all requires a period of holding times, from 3 to 5 business days. This means that you have to wait 3 or 5 business days for the fund to be cleared before you can use it to buy the stock today at today’s price. But even 3 business days later, the price may not be acceptable anymore.

When it comes to funding the trading account, Scottrade is quite unique. The system it uses, called Money Direct, is also an ACH system like what other brokers use (meaning that you have to follow the same procedure to setup the Money Direct as you do with ACH: bank routing number, your account number, etc.). However, with Money Direct, fund is available almost immediately and can be used to buy stocks that are priced $4 or more. This is one restriction on using the fund to buy stocks in cash account. If you have a margin account and want to use the fund to satisfy margin sell letter, then you will have to wait for 3 business days, or if you want to buy stocks that are below $4.

Early this year, I bought quite some cheap stocks through Scottrade and most of the time, I had to use Money Direct to transfer money to the account first before making the purchase because I didn’t have the money in the account (I don’t want to have any significant amount of money in the account). It was impossible with other brokers.

Another reason why I trade with Scottrade

BTW, if you decided to open a Scottrade account, use promo code KGKP0724 to get 3 commission free trades.

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Scottrade Trading Platform Review

Sun — Mon, 26 Oct 2009 15:31:09 +0000

Sottrade is a online discount stock broker which offers investors, from big to small, a wide range of products and trading tools at a competitive price.

One of the online discount stock brokers I use very actively is Scottrade. When I first selected Scottrade as my broker 7 years, I didn’t not much about it other than that it was the winner of a J. D. Power and Associate award. Of course, back then the landscape of online trading was much different than it’s now as the selection of discount brokers was very limited. Now, seven years later, with some many online brokers to choose from, I am still trading with Scottrade and, frankly, I am very happy with the choice I made in 2002.

So what exactly do I like about Scottrade? Well, not the commission that Scottrade charges. At $7.00 for every online stock trade order, the commission is rather high among discount brokers. However, compared to other brokers, Scottrade has an edge in providing comprehensive services and tools to make investing easier. And unlike many other discount brokers which operate solely online, Scottrade also has physical offices throughout the country, giving investors easy access to Scottrade staff for face-to-face help, should such help is ever needed. Even if you don’t need to meet a Scottrade employee when you have a question, knowing someone at your local office by name and always talk to the same person over the phone is still an advantage, isn’t it?

Anyway, let’s take a look at Scottrade trading platforms, the main subject of this post. I have talked about Scottrade’s trading platform when I compared discount broker web-based trading platforms some time ago. Here, I am expanding the discussion a little to include more information for those who want to know better about the broker before deciding whether to use it or not.

Currently, Scottrade offers investors two trading platforms. One is web-based and the other is a standalone, PC-based called ScottradeELITE, which can be downloaded and installed on local computer if you a minimum account balance of $25,000. ScottradeELITE is an ideal tool for those who trade a lot. If you are causal trader like I am, then the web-based trading platform is more than enough to get the job done.

Socctrade’s web-based trading platform is shown below.

The feature that is most appealing to me on the website is that it shows the total market value of my account graphically, giving me a clear picture of how my portfolio has been doing, even though the graphic only covers up to 6 months. As far as I know, this feature is not available at at any other brokers I am using.

Scottrade doesn’t have charts on its homepage. Quotes are given numerically only, even though it does have a separate page where I can get plots and all the technical analysis tools. Trading from the main web page is easy: Enter the symbol in the Quick Quote on the left first then provide all the necessary order information (or click the Trade tab on the top). What I would like to see here is that a Trade button next to all the securities I am currently own (Under Positions in homepage). Now even for those stocks, I have to go through the same steps (enter symbol and order info) to make a trade. Not every convenient.

Though, there’s no real-time quotes on its main web platform, Scottrade does have a free, Java-based streaming tool that opens in a new window (from the Streaming Quotes link on the left). The streaming tool looks a lot like ScottradeELITE, the stand alone software, you can even customize what you want to see in the interface, just like what you can do with ScottradeELITE.

While every broker has a web-based trading platform, not every one offers free, real-time streaming quotes. For most brokers, you can only get real-time quote when you enter the stock symbol and get the quote of the particular stock. With Scottrade, you can not only get real-time streaming quote for free, but also trade right from the window as well, no need to go back to the main interface. This is convenient.

And the streaming tool is not only a quote tool, but also a research tool, though just a very simple tool that doesn’t give you all you need to do a in-depth analysis of a stock because it only displays the volume information and moving average of the stock price for up to 2.5 days.

If you want to have a full fledged tool for your equity research, Scottrade has it under the Quotes & Research section on its homepage. If you don’t meet the requirement to have ScottradeELITE, the web-based research tool is still very decent, in terms of the usefulness of the tool (it has more than two-dozen indicators to help you research a stock or fund).

Even though I am not a heavy trader and don’t really use every tool Scottrade provides, from what I can see, Scottrade has a good collection of web-based tools that make the broker standout in the crowed. Even though the cost of trading with Scottrade is high, it doesn’t matter too much if you only trade a few times in a year, like I do

BTW, if you are interested in getting a brokerage account with Scottrade, here’s how you can receive 3 commission free trades ($21 value) when opening an account

Go to Scottrade.com
Use the promotion code KGKP0724 to open an account. There’s no expiration date for the promo code.
Make a deposit of at least $500 is required.
Enjoy your commission free trades.

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This Is Why I Trade with Scottrade

Sun — Thu, 17 Sep 2009 15:09:56 +0000

I write about Scottrade quite often here for a couple of reasons:

I have most of our investments with Scottrade, including regular brokerage account and IRA accounts;
I am happy with their customer service.

Usually customer service doesn’t play a big role when I select a bank or a broker (it wasn’t a factor when I decided to use Scottrade). However, my experience with the company is very positive so far, making me feel I made the right choice back then.

The reason I want to write this post is an email and a voice message I got from Scottrade yesterday. As I mentioned early, I am in the process of updating my new address with banks, brokers, and credit card companies, etc. I made the change with Scottrade two days ago. Then yesterday, I first got an email from Scottrade which informs me that, because of our move, we now have a new Scottrade branch office to serve us, only a couple of miles away from where we live, together with the branch office manager’s name and phone number. When I got home after work, there was a message on the machine. It was left by the branch manager who introduced himself and offered assistance should we have any question.

I have written in the past what I like about Scottrade is that, unlike other pure online brokers, Scottrade has branch offices throughout the country so, if I have to, I can stop by at a local office and do business right there (though there was never an occasion that I had to go to the office). I have moved 3 times since becoming a Scottrade customer and every time, they sent me contact information of the new local office shortly after I updated my address. And since they always let me who the branch manager is, I had no problem getting my problem resolved with the same person who knows me and the issue. With other companies, it’s almost certain that every time I call, I will talk to a different person and have to repeat my case again and again. That’s not the case with Scottrade.

For those companies which I have updated my address with so far, a couple of them, such as Bank of America and Fidelity, also have local branch offices, though may not be in the same town. However, only Scottrade has contacted me. That’s the difference and that ’s why I trade with Scottrade.

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Trade Gold and Silver with Zecco

Sun — Tue, 15 Sep 2009 15:07:18 +0000

Online discount broker Zecco Trading keeps rolling out new service.

Early this year, Zecco introduced Zecco Forex Trading, a platform that allows Zecco customers to trade foreign exchanges. Now you can even buy gold and silver if you are interested in investing in precious metal, right from the Forex platform.

Gold has crossed the $1,000/ounce mark again last week after hovering between $900 and $950 this year. However, since the collapse of Lehman Brothers one year ago which triggered the meltdown of the financial market, gold has risen 30%. And silver performed even better with more than 40% return in one year. Is the upward trend of precious metals going to continue? There are predictions that gold can go as high as $1,100 an ounce as the US dollar keeps weakening (INO.com has a video explaining the recent movement of gold).

In the past, I have written about where to buy gold which covers investing in both the physical metal and paper gold such as ETF. Now with Zecco’s new service, there’s one more way to buy gold and silver. Check it out. Of course, you will need a Zecco Forex Trading account, which is different from the regular brokerage account.

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Zecco Bonus Code for 20 Free Trades

Sun — Wed, 26 Aug 2009 02:11:18 +0000

Popular online discount broker Zecco Trading is running a promotion which offers 20 commission free stock trades, a $90 value, to all new brokerage customers!

Zecco is one of the brokers which I have an account with and I have written about it quite frequently here (read my Zecco review and first trading experience for more information about the broker). Currently, Zecco charges $4.50 per stock trade. The commission isn’t the lowest as far as I can tell (OptionsHouse charge $2.95 for example), but it’s still fairly cheap to trade with Zecco. And if you have a big account ($25,000 or more) or trade a lot (20 trades per month), you can get 10 free trades per month from Zecco.

Special terms and conditions of this offer are as the following:

New Zecco Trading accounts must be opened and approved by Sunday, September 13, 2009.
The 20 free stock trades will be granted on or before September 16th, 2009. The free trades will expire 90 days after the date they are granted.
Offer not eligible to existing Zecco Trading customers.
Limit one bonus per house.

To take advantage of this offer, open an account with Zecco Trading with bonus code “bonus1” and get 20 commission free trades. You have 90 days to use the 20 free trades you receive from this offer.

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OptionsHouse Dropped $100 Cash Reserve Requirement for Making a Trade

Sun — Sat, 15 Aug 2009 15:29:32 +0000

I am not sure what role, if any, I had in this, but I was just informed by Shannon Paul, the Communications Manager of PEAK6 Online, the parent company of OptionsHouse, that the discount online broker has dropped the $100 cash reserve requirement (that’s different than account minimum, which is $1,000 to open an account) for investors to use the broker to make a trade.

I opened an account with OptionsHouse in June after noticing that the broker has reduced its commission to $2.95/trade. However, when I was trying to trade stocks with OptionsHouse last month, I found I have to leave $100 in my account that basically does nothing in order to make a trade. That’s a very weird requirement by OptionsHouse to have $100 in the account to cover commission costs, but doesn’t allow customers to really use that $100 to pay for trade commissions. I then wrote about my experience and expressed my displeasure in the post.

After my post hit Twitter, @ShannonPaul contacted me and asked for my feedback. I basically told her what I said in the post, that the requirement doesn’t really make any sense and I feel it will only discourage small investors from using the broker even though the commission is really low compared to other discount brokers. Shannon said they will look into the issue and find the best way to address it. Then yesterday, Shannon brought the good news that OptionsHouse has already lifted the requirement last week after hearing feedback from customers. I am glad it’s gone.

Well, now that you can invest all your money, are you going to use OptionsHouse to trade stocks, given its low $2.95% commission? I know I will

BTW, it is still listed on their FAQ page the $100 requirement. I was told that it will be changed soon. So don’t be confused.

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Broker Web-Based Trading Platform Comparison

Sun — Wed, 29 Jul 2009 15:27:41 +0000

I bought my first stock nearly 8 years ago with Scottrade, which is also my first stock broker, in 2002 and one that I have been actively using since then. Throughout these years, as more and more online discount brokers emerged, I have also got accounts with other brokerage firms in order to reduce trading cost, even though the money I saved on commissions isn’t really significant at all. Despite that, I still prefer cheap discount brokers to full-service brokers which offer many services that I will never use but charge much more to trade stocks.

While my main focus is always on the cost side when choosing a broker, I find that what a broker offers on its main account homepage also plays a role on whether I want to use the broker or not, though only a small one. If you also look at the broker’s interface, such as functions and user-friendliness, when choosing which one to use, here I have a quick review of discount broker trading platforms that I am currently use.

Scottrade: $7.00 Commission

The best feature I like about Scottrade is that it shows the total market value of my account graphically right on the home page. Even though the graphic only covers up to 6 months, it give me a clear view how my investments have changed over time. This is a feature that I didn’t find at any other brokers I am using.

Scottrade doesn’t have charts on its homepage. Quotes are given as numbers only, even though it does have a separate page where I can get plots and all the technical analysis tools. To trade a stock, I need to enter the symbol in the Quick Quote first then provide all the necessary order information (or click the Trade tab on the top). What I feel not very convenient is that for those securities I already own, I have to go through the same steps (enter symbol and order info) to make a trade.

Scottrade doesn’t have streaming real-time quotes on its main web platform. However, it does have a free, Java-based streaming tool that opens in a new window (from the Streaming Quotes link on the left) and trades can be made from there as well.

TradeKing: $4.95 Commission

TradeKing probably has the simplest account homepage among brokers I am using. If no buttons or tabs or links are clicked, then I will only see my holdings and account balance and gain/loss. The gain/loss is the one feature I like because it shows the gain/loss, realized and unrealized, since the account is opened, so I know how my trades are doing over all. For most other brokers, I can only see the daily gain/loss.

Though TradeKing also has streaming real-time quotes on its web-based platform, but it’s not available to just everyone. To qualify for the stream quotes, I have to make at least 25 trades per month. Well, that’s too high a bar to just get the streaming quotes. There’s no charts on the main page either. To trade a stock, I have to click the Trading tab from the top of the screen, then enter order information. Trading stocks that I already own is a little easier, though (click the arrow on the right of the symbol to make a trade).

I once used TradeKing’s Live Chat to resolve a problem I have with dividend reinvestment and thought it’s a quite useful tool to have.

Zecco: $4.50 Commission

When I first got my account at Zecco two years ago, the interface looked terrible and difficult to use. Though Zecco has done some improvements last year on its website to make it more user-friendly, the main color of gray still makes me feel a little depressed when using it.

While TradeKing displays the overall gain/loss of the account, Zecco shows P&L, in both dollar amount and percentage, of each individual security on this homepage. This is quite useful because I don’t have to go back to check the trading recorders to figure out whether I make or lose money on the stocks. Another big plus, I think, for Zecco is that I can trade a stock right from the homepage at the top of the screen. It also allow me to trade stocks I already own without having to enter the stock symbol. And unlike Scottrade and TradeKing, Zecco now shows the daily chart of a stock on account homepage. What I want to see is a watch list of stocks I am interested in, which isn’t available currently.

Since with Zecco I can get up to 10 free trades per month if I meet certain conditions (such as $25,000 in market value or 25 or more trades per month), the information on the number of free trades available for the month is also quite useful.

While I can get free trades from Zecco, many other services it offers are paid services, such as streaming quotes ($8.00/month) and GainsKeeper ($24.99 every 6 months).

OptionsHouse: $2.95 Commission

OptionsHouse is the latest broker account I got and the one with the lowest commission cost for stock trading. Though I am not happy with the broker’s requirement of having $100 in the account in order to make a trade (read my first trading experience for details), I am quite impressed by its interface, which looks like it’s a stand alone product.

OptionsHouse is the first and only broker I am using so far to provide free, streaming real-time quotes on the web-based trading platform (the account has to be funded to get real-time quotes). Once I enter a symbol, the quote just keeps coming in real time. No need to refresh. Also the SELL and BUY buttons in the quote section make trading the stock quite easier. As you can see from the screen shot, OptionsHouse also shows a stock chart, which time span from intra-day to up to 5 years, on its main interface, along with other information about the stock. The information is more comprehensive than what Zecco provides. In addition to the chart, the broker also provides traders with tools such as news, stock watch list, and index monitor without leaving the main window.

If OptionsHouse eliminates the $100 deposit requirement, I may use it a little more.

Firstrade: $6.95 Commission

Since I run a Firstrade referral bonus sharing program myself, I get some bonuses for referring new customers to Firstrade once in a while. I basically just use that money to make a trade once I accumulate enough bonus, so Firstrade is no longer very active for me.

What I really don’t like about Firstrade’s user account website is that the Important Notices section takes a large space right in the center of the interface. I don’t find those notices very important and they are not updated very often. I’d like to see that place used for information that’s more useful for investors.

Overall, I can’t do much on the account homepage alone because, as you can see, what displayed on the homepage are not all related to trading. There are only four pre-determined indices and two index charts to display. There’ s a list of stocks to watch, but it looks like I can only enter up to seven symbols. There’s even no list of positions on the homepage, only an account number with the current market value.

Even though Firstrade doesn’t have streaming real-time quotes on the account main homepage, it also has a free, real-time streaming tool that opens up in a new window from the link in the top right corner of the screen. The tool, called X-Stream Dynamic Real-Time Quotes, allows me to trade at most 20 stocks.

OptionsXpress: $14.95 Commission

I never used OptionsXpress to trade a stock or options, except running a referral program and using their practice account, I found that OptionsXpress’s new MyOX probably has the bast web-based trading interface that’s fully customizable. On the default MyOX page, I can see basic information of my account such as balance, positions, orders, stock/options watch list, and a quote of stock that’s not in the watch list. But that’s not all it offers. In fact, I can add a new tab if I want to have more contents, such as charts, options chain, financial news, RSS feed, etc, though they will not be on the same page.

In addition, OptionsXpress also has streaming real-time quotes in a new window (use the link at the bottom of the screen). Stocks in the watch list are added to the real-time quote window, where trades can be made right from the streaming quotes window (double-click any symbol in the quote list and the symbol will appear in the order form). It’s really convenient.

ShareBuilder: $9.95 Commission

ShareBuilder isn’t really a platform for real-time trade because of its high commission cost. I used the broker to make a few automatic investing before, but abandoned it a couple of years ago. The main account page is quite simple as you can see from the above screen shot. No streaming real-time quote is offered by ShareBuilder.

What I Want

Well, after going through all the trading platforms from brokers that I have an account with, what I want from a broker is clear:

Low commission
Customizable account interface
Free streaming real-time quotes
Free gain/loss tracker
Free practice account
Comprehensive research tools for stock and options trading

A little bit too much to ask?

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Broker Web-Based Trading Platform Comparison

trade MONSTER Offers Investors Great Trading Experience

Sun — Sat, 25 Jul 2009 15:04:03 +0000

trade MONSTER is another online discount broker that generates quite some interests recently.

I first noticed trade MONSTER when I compiled the list of discount brokers with the lowest commissions for online stock trading. Actually, if you look at the list, trade MONSTER isn’t really attractive from the point of view of costs. The broker charges $7.50 per stock trade, plus $0.50 per contract for options trading. As you can see, there are many brokers on the list, such as Scottrade, Zecco, TradeKing, and OptionsHouse to name a few, charge much less commission than trade MONSTER does.

So what makes trade MONSTER so special?

Early this year, Barron’s published its annual survey of online brokers. In the report, Barron’s praised trade MONSTER, a broker that was launched only in October 2008, for offering traders “dazzling array of tools” that are readily accessible to all investors and a “very easy-to-use website” that make investors’ experience with the broker a pleasant one. Barron’s also noticed that trade MONSTER, at that time, was the first in the industry to allow its customers to customize their trading interfaces (Now OptionsXpress also has a customizable interface).

Another feature that separated trade MONSTER from others is its real-time streaming quote for investors, the first such offer in the industry. For those brokers I am using, none of them has streaming quotes in real time on their web based trading platform. Even though the quotes are real time, I can only get a single quote at a time when I request it. The only exception is Scottrade, which offers streaming real time quote in ScottradeELITE, its PC based, stand alone trading platform. At this time, as far as I know, OptionsHouse also has real time streaming quote function in its online trading platform.

In addition, trade MONSTER also received high ratings in the following areas:

Trade Experience: 4.4 stars (out of five)
Usability: 4.3 stars
Portfolio Analysis & Report: 4.5 stars (only Fidelity was higher with 4.6)

Overall, Barron’s has put trade MONSTER at the same level as more established brokers in the industry, such as TD Ameritrade, Charles Schwab, Muriel Siebert and Scottrade.

Receiving such recognitions in such a short period of time is truly remarkable, I guess that’s what makes trade MONSTER different from others.

I haven’t used trade MONSTER yet as I already have enough brokerage accounts for me to play with, so I can’t tell what distinctive features trade MONSTER has. If it is indeed a standout from the crowd, I think I may give it try as well, even though I probably won’t use it to trade regularly.

Are you using trade MONSTER? If so, what’s your overall experience?

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trade MONSTER Offers Investors Great Trading Experience

First Trading Experience with OptionsHouse

Sun — Tue, 21 Jul 2009 14:29:26 +0000

I opened an OptionsHouse brokerage account a few weeks ago after noticing that it has lowered its online stock trade commission to $2.95/trade. That price beats what I currently get from other popular discount brokers, such as TradeKing, Firstrade, and even Zecco. However, since OptionsHouse requires some paperwork (such as a signed form and voided check, even though it used trial deposits to verify account ownership already) be sent in, the account was delayed several days (they even called me to let me know the account is available, which is nice).

Anyway, the account was successfully funded last week with $1,000, the minimum amount that’s required to opened an account, and I decided to test drive OptionsHouse to get a feeling how it works. I am glad I did it because there is something that I overlooked before opening the account left me a very bad taste of the broker.

I mentioned in my previous post that when I opened the account, it showed all quotes are delayed 20 minutes, which I thought doesn’t make any sense. It turned out that the account has to be funded in order to receive real-time quotes. Since now my account is funded, I indeed get stock quotes in real time.

The stock I wanted to buy yesterday was CIT Group (CIT), which has been in the news quite a lot lately because the government refused to bail the small business lender out. At the time when I entered my order, the stock was traded slightly higher than $1.25 a share, so I entered a order to buy $797 shares of CIT at limit price of $1.25/share. The total cost is $996.25. Since I already subtracted the commission cost of $2.95, the $1,000 in my account was enough to cover both the commission and the cost of the stock. At least that’s what I thought.

However, once I hit the Preview button to preview my order, I got an error message, saying I don’t have enough buying power to make the trade. I thought I have enough money in my account, even though the trade itself will cost less than $997. I have been doing this with all other brokers and never had any problem with settled fund.

So I kept reducing the number of shares I wanted to buy to see when the error message will go away. 1 share less, 2 shares less, 5 shares less, 10 shares less, but none of them worked, until I put a much smaller 500 share to buy did the message disappear.

But I don’t want to buy just 500 shares. So I called customer service and asked why I wasn’t allowed to buy the stock I wanted to buy even though I had enough fund in the account. The CSR then told me something that I think is really ridiculous. He said, though I have $1,000 in my account and Stock Buying Power of $1,000 as OptionsHouse says I have, I don’t really $1,000 to buy stock. Instead, I only have $900 to buy stocks and have to leave $100 in my account to cover commission costs. And the reason for maintaining $100 in the account is that there are people trade at high volume and since OptionsHouse only takes commissions at the end of the trading day, not with each trade (at least that’s what I was told), the accounts could have deficits at the end of the day. So they want to have that amount of money as a cushion.

I told the CSR I didn’t see this information when I opened the account and asked where I can find it on their website. I was then pointed to their FAQ page (under Account Information), which has this:

Do I need to maintain a minimum account balance?

All accounts are required to maintain a minimum balance of $100.00 in order to place a trade. The minimum account balance is not the same as the minimum initial funding size. The minimum initial funding size is $1,000 for a cash account and $2,000 for a margin account.

I have traded stocks with quite a few brokers and if I don’t have enough fund in my account for both the trade and the commission, the trade just won’t go through. I am not an expert in this area, but I am really having a hard time imagine how hard it cold be to implement this. Yet, OptionsHouse decides to take an approach that’s annoying. When I asked whether I receive any interest for the money that’s idle. The CSR said “Yes, it’s in a money market account at 0.01% interest rate.”

Well, that’s a brilliant way to get $100 free loan from everyone using OptionsHouse. And the reason they gave me sounds just like a convenient excuse for holding customer’s money hostage. Nice Job!

But do I really have $900 to buy stocks? No, not really.

I went back to modify my order to bring the cost of trade down to below $900, but my order was once again rejected due to insufficient buying power.

But I already set aside $100 for the commission cost, how come I still can’t buy? Well, even though OptionsHouse says the $100 reserve is to cover commission, I still have to deduct $2.95 from $900 to just get the order through.

When I was complaining to the CSR about this, he basically told me this is how we do business and what are you going to do about it. While there’s probably nothing I can do about the way OptionsHouse does business, I can at least not lend you $100 free loan.

So I guess this may be the reason why OptionsHouse can afford to a commission that’s significantly lower than other brokers.

Update: OptionsHouse is offering 100 commission free trades for November and December 2009.

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First Trading Experience with OptionsHouse

Practice Stocks and Options Trading with optionsXpress’s Virtual Trade

Sun — Mon, 20 Jul 2009 14:48:41 +0000

I opened a brokerage account with optionsXpress back in 2007 when they ran a promotion that gave $100 bonus for a new account. Since then I have been running an optionsXpress referral program for people who want to receive some incentives to open an account with the broker (you can get $100 bonus, which is the highest bonus payout as far as I know).

While I have kept my account alive, I didn’t do much with account except referring people. The reason is mainly that I already have enough broker accounts (Scottrade, TradeKing, and Zecco, and the latest OptionsHouse to name just a few) for me to trade stocks, some that are cheaper (see Discount Brokers Comparison for a list of discount brokers) than what optionsXpress charges.

Then I recently noticed that optionsXpress has a tool that I didn’t see at other brokers (I know another website, UpDown.com has virtual trading, but it isn’t a broker): Virtual Trading. It’s a practice platform that lets beginners to learn how to trade stocks and options, but it looks and functions like the platform you are going to use when you trade with real money instead of the fake one from the virtual account.

The virtual account gives each account owner a default $5,000 virtual money to trade stocks and options. With that amount of money, the stock buying power is $10,000 (looks like this is a margin account so the stock purchasing power is twice the cash account0 and the option buying power is $5,000. If you think the money isn’t enough to practice, you can add whatever amount you like into your virtual trading account

The virtual stock trading interface is exactly the same as the one used in real trading. By simply providing the stock symbol, shares you want to purchase, and order types, you can experience the process as if you were buying a stock with real money, except that the money isn’t real. Since I have been trading stocks for years, I don’t know how much I can improve my trading with this tool. However, for beginners who have never bought a stock before but want to trade, it is a nice tool to get a feeling of the stock market and making or losing money from trading stocks before trying it with real, hard neared money. The stock market sometimes seems to be intimidating, especially when you don’t know much about it. With this virtual trading tool, you won’t have to worry about losing money because you are trading with virtual money. With that said, however, it’s better that you still treat it as a real account with real money when practicing, even though you know it isn’t. And to get the best result from the practice, you will need to follow the process what people usually do before buying a stock: Do your homework to find out what to buy. Of course, this is all too easy said than done. Even though more practices won’t necessarily make a person a good stock trader, a practice trade at the beginning is always better than a real trade with real money

What I am more interested is the virtual options trading. I have mentioned before that I am learning options trading myself, slowly. I haven’t made any real options trade yet, but I like to use this virtual tool to try some techniques first before playing with my real money.

The virtual trading tool is free. However, you do need to open an account with optionsXpress in order to use it. If you are interested in getting an account, use the Contact form to request a referral link and receive $100 bonus.

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Practice Stocks and Options Trading with optionsXpress’s Virtual Trade

A Look at OptionsHouse for Stocks and Options Trading

Sun — Tue, 30 Jun 2009 17:34:14 +0000

OptionsHouse first came to my attention in April when I compared online discount brokers for their commissions to trade stocks, mutual funds, and options. However, at that time I didn’t get much interest in the broker at that time because back then, the commission it charges was $4.95 per stock trade, which is the same as what TradeKing charges. However, since the launch of OptionsHouse 2.0, the broker has reduced its stock trade commission to $2.95, beating both TradeKing and Zecco ($4.50/trade, but you can get commission free trades from Zecco if you meet certain conditions), another popular online discount broker, easily and nicely as far as commission is concerned. In fact, OptionsHouse adopts a flat-fee policy that makes it a very attractive discounter brokers for both stocks and options trading.

Since I started to learn options trading, I decided to open an account with OptionsHouse and see how it compares with other brokers I am currently using. If nothing else, the $2.95 commission itself makes OptionsHouse a nice choice to trade stocks.

OptionsHouse Interface

My first impression of OptionsHouse’s trading interface is very positive (since I am still waiting for my account to be funded, I wasn’t able to trade). Even though the interface is web based, it feels more like a stand alone platform.

The Account page lists all the information about the account, including Account Value, Portfolio Value, Cash Balance, Stock Buying Power, Option Buying Power, Positions, and Orders. By clicking tabs on the right hand of the screen, I can read market news, see chart of a particular stock, check out stocks in my watch-list, see what’s hot in options trading, and monitor indices.

The Stock page gives me detailed information about a particular stock I am interested in. For example, it shows the company profile, financials, latest insider trades, SEC filings, analyst ratings of the stock (in the picture above is analyst ratings of Citigroup and stock chart), earnings, and historical stock prices. The information is very comprehensive, covering pretty much everything you need to know about the company.

While the interface looks impressive, I found it’s a little weird that all stock quotes are delayed 20 minutes. I don’t know why it only gives delayed quote (hope it isn’t like TradeKing that I have to setup the account to get real-time quotes). If I want to trade stocks at real time, then I need real time quotes, not something that has happened 20 minutes ago.

The Options page shows Option Chain of a particular stock with expiration times for Put and Call Options from 17 days to 572 days.

OptionsHouse Tools

What I like the most are the tools offered by OptionsHouse. Here I can use tools such as Streaming Charts & News, Risk Viewer, Probability Calculators, P&L Calculator, Stock Screener, Vol Charts, Put Spread Investigator (as shown in the following screenshot), Call Spread Investigator, and Covered Call Investigator.

Even though I didn’t find a tool to let me do, for example, Technical Analysis, it does have quite a few tools for options trading. However, since I don’t trade options, I can’t comment on whether those tolls are useful for options trading or not. I will need to study a little more to know how to use them

I did played a little bit their stock screener. The function that let me export results in CVS file, which you can open with Excel, is quite nice (if you think it’s necessary to export the results of course).

What else?

Since I am still waiting for my account to be fully functional right now, I am sure there will be other functions that I will find helpful once I start to use it to trade. In addition to the flat $2.95 commission per stock trade, OptionsHouse also charge flat $9.95 for options trading. The flat fee, however, could cost you more if you only a small number of contracts (1 options contract represents 100 shares of the underlying stock). For example, if you trade only one options contract, you will pay OptionsHouse $9.95 in commission, while trading the amount of contract with, say, TradeKing, will cost you only $5.45 ($4.95 + $0.50/contract) because, TradeKing, like most other discount brokers, charges commissions for options based on the number of contracts traded (see updated discount brokers comparison for commissions charged by each broker for trading options), plus the commission per stock trade. If you buy or sell more than 10 contracts, then OptionsHouse will make a better choice since TradeKing will charge more than $9.95 for trading more than 10 contracts.

If you are other brokers, but interested in trading stocks and options with OptionsHouse, you can open an account with OptionsHouse ($1,000 minimum is required), then use ACAT to transfer your account from other broker to OptionsHouse. Though you are likely to be charged with an account transfer out fee, but OptionsHouse will reimburse you up to $100 transfer fee charged by other broker.

Update: I had an online chat with OptionsHouse and it seems that I have to wait until my account is funded to see real time quotes. Also for the account to be fully functional, I need to fax in the signed application together with a voided check.

Update 2: The account is up and funded. OptionsHouse uses trial deposit to verify the ownership of the linked external bank account, despite the requirement of mailing/faxing in a voided check. And after the account ownership is verified, they actually took back the two trial deposits! Talking about cheap.

Update 3: OptionsHouse is offering 100 commission free trades for November and December 2009.

If you are interested in opening a brokerage account with OptionsHouse, use OptionsHouse promotion code below to open an account and start trading.

Promotion	Description	Expiration
Flat $2.95 per trade	Buy stocks/ETFs at $2.95 per trade, regardless whether it’s a market or limit order.	N/A
Trade options with OptionsHouse for $9.95 flat commission	OptionsHouse ranked #1 in Barron’s 2009 Online Broker Survey and it’s named the Best For Options Traders. Open an account and experience the difference.	N/A

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A Look at OptionsHouse for Stocks and Options Trading

SmartMoney 2009 Best & Worst Online Brokers

Sun — Tue, 19 May 2009 19:39:17 +0000

Despite all the troubles at the financial service company, E*Trade Financial scored a big win in the latest SmartMoney Broker Survey, leading four out of five categories. Though I don’t use E*Trade as my stock broker, nor do I have a savings account with them, I do have a E*Trade Global Trading Account to trade a few stocks listed on Hong Kong Stock Exchange. For the few times that I had to call them around midnight (that’s when Hong Kong trading is underway), I was quite impressed that my issues were resolved right away, without having to wait till the next morning during *normal* business hours.

In the SmartMoney study, broker services in Mutual Funds & Investment Products, Banking Services, Trading Tools, Research, and Customer Services are evaluated.

Commissions & Fees

Trading costs, such as commissions and fees, are always the issue I consider as the most important one when screening discount brokers. I may not go to the broker with the lowest commission, but I don’t want a full size broker with all the features and charge me a load of money to trade stocks either.

Best: Just2Trade charges $2.50 commission for both stock and mutual fund trades, the lowest per-trade based rates as I know (see Discount Brokers Comparison for more details).
Worst: Even though WellsTrade offers commission free trades, you will have to have $25K assets with the bank to qualify. The same requirements for both Bank of America and Zecco. Commission is $19,95 at WellsTrade if requirements are not met, more than four times higher than what Zecco charges ($4.50/trade).

Investment Products & Mutual Funds

What I want to do with my brokers is trade stocks/ETFs (I haven’t got into option trading yet), not mutual funds because I found that fees charged for trading mutual funds are usually much higher at discount brokers. Even though many brokers have a long list of no-transaction fee funds, many good funds are left out. For mutual funds, I prefer to go to the fund companies directly.

Best: Fidelity, as one of the largest mutual fund companies, has its advantage over its competitors in providing investment products, including its own line of mutual funds at no additional cost.
Worst: On the other hand, SogoTrade doesn’t have any much fund to offer its customer, even though the commission for stock trades is among the lowest.

Customer Service

Among those discount brokers I am currently using, I am quite happy with how things are going with Scottrade and TradeKing. Since I use mostly Scottrade to trade stocks now, I have more chances to call their local office than before and my calls were always answered promptly and issues were resolved rather quickly. I am surprised neither Scottrade nor TradeKing won in this category.

Best: I am not familiar with Muriel Siebert, which was also selected by Kiplinger in 2007 as the best fund broker. The reason for the selection was the firm answered “phone calls and e-mails promptly with thorough and cordial responses.”
Worst: WallStreet*E, a broker I never heard of, was name the worst in this category two years in a row because it didn’t reply emails from prospective customers. Then there’s no reason do business with them if they don’t want you.

Trading Tools

Since I am not an active trader, I usually don’t pay a lot of attention to those fancy tools brokers offer (I do use a few alerts from Zecco) and most of my researches on stocks were done independently to any brokers because there are many free tools available. That said, it’s always nice if you can get everything done with your main broker, instead of jumping back and forth between different sites.

Best: With TD Ameritrade, you can use as many as 13 trading tools to trade more efficiently, including trade stocks from your smartphone. If you want to pay $10 per trade, you can enjoy the convenience of the broker.
Worst: ShareBuilder, now owned by ING, likes to keep things simple, therefore, they don’t have many tools for investors. And simplicity is what you will find at ING Direct and many people seem to like that.

Banking Services

I don’t expect too much when it comes banking services from a broker because I am not going to use it as a savings account. I prefer to leave that to a bank because I think I can get a better deal from a bank, not a broker. But comprehensive financial service companies such as E*Trade and ING Direct did have competitive banking products in the past (ING Direct Savings and E*Trade Complete Savings).

Best: You can get free services such as online bill pay, instant fund transfer, and ATM fee rebates from Fidelity, E*Trade and WellsTrade, which are nice if you also use their banks.
Worst: However, if you use either SogoTrade or Scottrade, you won’t get many extra services with your money because neither offers any attractive banking services.

Research

As mentioned above, I usually do research outside my broker. I have talked about Scottrade’s mutual fund center and TradeKing’s research tool in the past, but most of the time, I like to use tools available at, for example, Morningstar or INO, many other free tools.

Best: Charles Schwab and E*Trade are selected as the best because they both have easy to navigate websites that make stock and mutual fund research not a challenged job for investors.
Worst: On the other end of the spectrum, Zecco and WallStreet*E are brokers with hard to use websites and lack of research tools. I don’t know much about WallStreet*E, but Zecco has received quite some complains before for their not-so-user-friendly website, despite their improvements. A lot have to be done for sure.

When you select a broker, what do you consider as the deciding factor?

photo credit: goatling

Original Post on The Sun's Financial Diary

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SmartMoney 2009 Best & Worst Online Brokers