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:

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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?

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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 accont

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

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

• 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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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?

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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?

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

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

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

When I look for a discount broker, one of the most important pieces of information I always pay close attention to is the commission that the broker charges for buying and selling stocks. I want it be as low as possible. The research process involves comparing a few brokers at the same time to determine which one has the better pricing plan. Unfortunately, that’s not always a straightforward process, because when I went to a certain broker and checked out their commission & fee page, I often found that they only compare themselves with their peers who charge a higher fee. They want to show potential customers that they are the best choice in terms of costs. But that’s hardly the case if you put all brokers together for a fair comparison. For example, this is what you will see at Zecco:

And we know Zecco’s current commission at $4.50/trade isn’t the cheapest, though it’s below what many other discount brokers change for stock trade. BTW, the Free in the above picture comes with very high requirements. Maybe it was before Zecco changed its pricing policy, but definitely not now.

The reason for brokers to only show high-cost competitors is obvious and understandable: Nobody wants to tell people there are cheaper options available, unless they have other features to separate them from others. This certainly won’t help a potential customer to find the right broker he/she wants. For me, I usually had to go to a few brokers’ websites and cross-compare their fees before selecting which one to use. I always think it would be nice if I can find all broker commissions in one page without going from one website to another.

Well, if that’s what you are thinking as well, then here’s the table I put together with how much discount brokers change for trading stocks, mutual funds, and options, plus minimum deposit required to open an account. As you can see, I have excluded brokers that charge $10 or more per trade. Some well-known names in that category include E*Trade ($12.99/trade), Charless Schwab ($12.95/trade), and optionsXpress ($14.95/trade), etc. I just think it doesn’t make any sense to pay $10 commission to be a few thousands of dollars worth of stocks. Also, from the table, it seems that using a broker, even a deep discount broker, to buy mutual funds isn’t a good idea because fees for trading mutual funds (all non-load, transaction-fee funds) are generally much higher than fees for stocks/options. Some brokers do offer non-transaction-fee funds, but the selections are usually limited. For mutual funds it’s better to go directly to the fund company instead to avoid any additional fees.

The table is by no  means complete. I will add to it when I find other brokers with discount rates. If there’s any other brokers you know that charge less, please also let me know.

*TradeStation offers both per-share commission plan and flat-fee plan. $9.99/trade is flat-fee plan for 1 – 9 trades/month.
**ThinkOrSwim’s per-share commission is $.015 per share ($5.00 minimum)
***AB Watley Direct’s 90-day introductory rate. $9.95/trade ongoing commission.
+ShareBuilder $4 commission for automatic investment plan. $9.95 real-time trade. ING mutual funds only.

Of course, commission & fees are the only factor that one should consider when selecting a discount broker. Zecco used to be really cheap, but then there are lots of complains about their sub-standard customer service and poor website. That said, if you are like me who always wants to keep the cost of trading stocks or ETFs low, then brokers with low commission are the first ones you want to check.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

I have a few brokerage accounts and among them three I use most often: Scottrade, Zecco, and TradeKing. In the past, I have contacted all of them for various questions, some related to trading, some just general questions. My experience so far is mixed. Generally, Scottrade was quick in answering my calls and had my problems resolved satisfactorily in a timely manner. The reason could be that I always call my local branch office and talk to representatives whom I talked to multiple times before. And when I questioned about TradeKing’s stock quote, I was approached immediately by the broker and the issue was soon cleared. With Zecco, on the other hand, it was a frustrating experience especially in the early days when they didn’t even have a toll-free number, even though problems eventually got solved (last time I got some additional help from @Zecco on Twitter). In my interview with Zecco last year, the broker said it had done a lot on its customer service. But it looks like that for Zecco there are still rooms for improvements, plenty of rooms.

Last Friday, SmartMoney published a report on brokers’ response time to phone calls from customers. According to the survey, ShareBuilder is the quickest to pick up the phone, taking an average of 16 seconds. Brokers with the best response time are:

At the other end of the spectrum are brokers really take their times to answer the phone. The worst, not surprisingly, is Zecco. The average time for Zecco to response is 97 seconds, that’s five times the time ShareBuilder needs (the time is probably enough for someone to finish a quick call) and twice as much for Firstrade, another broker I am usaing.

The SmartMoney article has this to say about Zecco:

Zecco, a site that offers commission-free trades, could learn a thing or two from ShareBuilder. It took Zecco operators 97 seconds on average to pick up the phone or five times as long as our best entrant. The last thing an anxious trader needs on a big market day is to listen to cheesy hold music while waiting for a Zecco representative.

As we know, Zecco has made some dramatic change in their pricing policy recently, a move that has upsetted many small investors. Early this month, they also introduced a new Zecco foreign exchange platfrom. While it is obvious that Zecco is trying to expand its reach to potential new customers, I’d rather see them take effort to keep their existing customers happy.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

The first one is Zecco Forex Trading. Since I know nothing about forex trading (expect some say it’s one of the quickest way to loose money), there’s no way for me to tell whether it’s a good product or not. Some highlights of the new Zecco Forex include:

• Easy-to-use, practice version of the Zecco Forex trading platform
• $50,000 in virtual funds – trade risk-free
• 200:1 leverage
• Real-time quotes in 37 currency pairs
• Powerful charting
• 24-hour news headlines
• Daily and weekly Forex research
• 24/6 support by phone and live chat

I’d like to learn how to trade forex. But until I become confident in currency trading, I am not going to touch it.

Another service is Zecco Alert, which I think is more useful to investors. I signed up with Zecco Alert and I have been getting daily updates delivered to my email on the market (most active stocks, bullish & bearish ideas, and analyst calls) as well as on individual stocks (mostly price changes).

If you prefer, you can also choose to receive alerts via Twitter (follow me on Twitter @SunFinancial) instead of email.

While these changes are nice, I’d rather like to see Zecco focus more on its core business: online discount brokerage, because that’s what it is known. There are a lot of areas it can do, such as customer service and the usability of its website, two areas that people mostly complain about, to give its customers a better experience. A new forex trading platform won’t do much to improve its image I am afraid.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

Details of incentives being offered are as the following:

Firstrade is very pleased to announce the launch of a promotion on The Investor Network. We’ll be giving an Apple iPod Nano to the three members that contribute the largest number of quality posts by April 16, 2009. Additionally, if you are one of the first 150 members who contribute three posts by April 16, 2009 you will win a $10 Amazon.com Gift Card!

You do, however, have to have Firstrade as your broker in order to join their community. Open an Firstrade account if you are interested in becoming a community member.

Setting up an online community seem to be a popular trend these days. Many brokers, including Scottrade, TradeKing and Zecco, already have theirs. Even third parties have jumped on the bandwagon with their own networks. It’s touted as a place where real investors (community members usually have to have an account with a broker) share their real investing stories (you can choose to share your investment portfolio). I have joined a couple of them, but never really participated because of time constraints. Are you a member of any community? Have you picked up any investing idea from the discussion?

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

1. Know your tax terminology
2. Set up your positions in Maxit Tax Manager
3. Watch out for wash sales
4. Tax ramifications of establishing your trading as a business
5. Fee your Retirement Account
6. Consult your tax guy or gal – early an often

Sounds interesting? Use this link to request your free e-book and it will be sent to your Inbox right after you entered your email address. Plus, it looks like there’s an extra bonus together with the email. In the email I received, it contains a link for a $50 bonus when opening a TradeKing account with $2,500 minimum deposit and making a trade. TradeKing did have similar promotion in the past, but not right now. So if you are looking for a little incentive to open a TradeKing account, you can get it know together with a free e-book

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

If you are, then you can get $25 bonus when opening a new account. This offer is only good for joint, individual and custodial accounts, not for IRA or ESA accounts. The bonus will be credited to your new account within four to six weeks after the first transaction is made. This means that you not only need to open an account, but also make a trade in order to qualify for the bonus.

Despite the bonus, ShareBuilder isn’t the online brokerage that I’d recommend for a few reasons. First, it isn’t really cheap to invest with ShareBuilder. You pay $4 with their automatic investment plan and $9.95 for real time trade. This isn’t the price I am willing to pay. Second, it’s not flexible to invest with ShareBuilder. With their automatic investment plan, you can only buy stocks on Tuesday on a monthly basis. Even though they recently introduced a feature to let you save first and invest later (so you don’t have to buy every month, potentially reduce the cost of investing), I’d like to have the flexibility of investing at my own schedule. There are many other discount brokers available that offer both low commission and investment flexibility.

Anyway, if you are interested in getting the $25 bonus and a ShareBuilder account, you can use the contact form to request a referral link.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

Now we know Zecco will soon be Not ZEro Commission COst for many small investors after the broker introduced a new fee structure which requires at least $25,000 in market value to earn 10 free trades per month, it’s time to check out some alternatives to Zecco. Even though at $4.50 per trade (March 1, 2009), the commission is still quite low comparing to other discount online brokers, I can feel that there are a lot of unhappy investors ready to move on.

For me, I will keep using Scottrade and TradeKing as my primary brokers. I have earned some free trades at  Scottrade from their referral program, so I won’t have to pay commission ($7) if I trade modestly (Scottrade offers up to $100 account transfer fee reimbursement). At TradeKing, the commission ($4.95) is lightly higher than the commission at Zecco, but I like TradeKing interface much more despite the improvements at Zecco. Also TradeKing reimburses up to $150 account transfer fee charged by other brokers.

While I won’t be using my Zecco account as much as before because of the change, I will keep the account open for the time being. The reason for not closing it is that Zecco cited the current economic condition as one of the reasons to abandon the commission-free trade policy. If the economy improves (who knows when, but it will), maybe they will reverse their policy in the future? That’s not entirely impossible given how much the broker has changed its policies already.

But for now, what other cheap brokers can you use? Depending on the size of your portfolio, you have a few choices.

More than $25,000 in Assets

If you have more than $25,000, then there are a couple of other places where you can get commission free trades.

• Bank of America Investment Services: You can get 30 commission free trades from BofA Investment Services if you have more than $25,000 with the bank. The catch is assets in the brokerage account doesn’t count in the $25K assets. So you will have to have $25K in deposits accounts, checking, savings, or CD, to be eligible for the free trades.
• Wells Fargo WellTrade: Think the $25K in deposit accounts required by BofA is too much? Than check out WellTrade from Wells Fargo. With WellTrade, you can get 100 commission free trades each year as long as you maintain $25K in brokerage, loan balances or deposits with Wells Fargo. 100 free trades a year isn’t as good as 30 per month, but the requirement is lower.

Less than $25,000 in Assets

If you don’t have a high balance required by BofA or WellTrade for free trades, but still want to buy stocks with relative low costs, then there are several discounter brokers out there charge for less, in addition to Scottrade and TradeKing I just mentioned.

• Just2Trade: With Just2Trade, you pay $2.50 per trade, for stocks and mutual funds. I know many discount brokers charge a much high commission for buying/selling mutual funds, so $2.50 for no-load mutual fund order is a very good deal. And there’s no minimum to open an account.
• Options House: There’s no minimum requirement to open an account at Options House and you will pay $2.95 flat-rate commission for each trade. For stocks priced $2.00 or less, the commission is $2.95 per trade plus $0.01 per share.
• Sogo Trade (reviews): With a minimum of $500, you can open an account with SogoTrade and trade for stocks or ETFs at $3 per trade market or limit order. For trades above 5000 shares, the commission cost is the regular commission plus $0.004 for each share above 5000. For stocks priced less than $1, an additional fee of 1/2 of 1% of principal value applies. There’s no inactive fee or subscription fee.

Any other brokers out there beat Zecco’s $4.50 per trade commission?

BTW, if you want to transfer your brokerage account, take a look at my previous post on how much it costs to transfer a brokerage account. While in general you need to pay, usually $50 to move out, the good news is many brokerages offer reimbursement if you move your account to them.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

This is just another example to show that there’s no such thing as free lunch, if you consider free stock trades from Zecco as *free lunch*. Since the launch in July 2006, Zecco, which stands for “Zero Commission Cost,” has been slowly drifting away from their initial belief that “there are independent investors out there who are comfortable making their own decisions and who would rather see their money go toward their investment return instead of paying higher commissions” (see my interview with Zecco).  Today, they finally buried their free trade concept when they announced new pricing policy effective March 1, 2009:

The new fee structure essentially killed the free trades for small investors, who have been attracted to Zecco because of its relatively low minimum requirement to earn the free trades so they can keep the costs to invest down. Not any more. You now have to be an investor who either have a big account ($25K minimum) or trade like crazy (25 trades per month) to avoid the commission, even though the new $4.50 per trade commission is still relatively low comparing to other online discount brokers. Zecco’s explanation of the policy change is like this:

Why was this necessary now? Anyone who’s read a newspaper lately knows that the US and world economies have been hit hard over the past 4 months. As a result, some of the largest corporations in the world have had to cut costs and adjust to new business realities. With reduced retail trading volumes and lower interest rates, we at Zecco Trading simply could no longer provide free trades to as many people as we would like.

“Reduced retail trading volumes”? Didn’t they give unlimited free trades in October 2008 to everybody because “system activity increase by over 450%” in September?

Looking back the history of Zecco, the broker has changed its policy quite dramatically in the past two and a half years, more like bait and switch. First, they offered 40 monthly free trades with $2,500 minimum, then reduced the minimum to $1,000, later removed the account minimum all together. But that didn’t last long as they reinstalled the $2,500 minimum requirement and cut free trades per month to 10.

Today, it became just a discount broker.

I wasn’t very confident about their free structure from the very beginning and have doubts how long the free trades can last, therefore, I only keep a very small account, my play money, with them. With the new pricing policy, I don’t see the reason for small investors to hang on with them. The main and only attractive point of Zecco is now gone.

Maybe it’s time for Zecco to change its name as well.

Will you keep using Zeccoo? If not, what’s your option? If you have at least $25K, then I am sure you can find better alternatives which can give you better trading experience.

I prefer brokers with consistent policies, even though I will be charged to make a trade. That’s why I keep my investments with Scottrade and TradeKing, but only play money with Zecco.

*Thanks Chuck for the tip.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

ACH Deposits
- 5 business days to clear for trading
- 60 business days from date of deposit to release funds from the account – return funds via ACH only

60 business days to release funds? That’s like what, three months? I don’t know the reason behind these changes, but 60 business days seem awfully long for any reason.

Anyway, with the help from Sue Parente at Tier One, I got the chance to ask TradeKing to explain their new policy a little bit to clear up the confusion. Last Friday, John Dominic, VP of Brokerage Operations at TradeKing, responded my request:

Sun -

Thank you for your inquiry and offer to help clarify for your blog readers our policy with regard to ACH deposits. It is true that we have featured some inconsistent language on the site in recent weeks on this matter in the “Funds Available” section and we sincerely apologize for this. We would like you and your readers to know that we have changed the specifics of our policy today with the intention of making it clear, fair and consistent for every client across the board. In short, after further reviewing our existing policy, we have decided to increase the general hold time on ACH withdrawals from 30 to 60 days. We’ve done this to ensure funds are properly cleared and to help protect both clients and TradeKing from overdrafts as well as any potentially fraudulent activity in the account. Please note that trading activity on those funds is permitted within five business days after the date of transfer and that TradeKing does not benefit monetarily in any way from this extended hold time on withdrawals. It is purely intended as a preventative measure against fraud and money-laundering schemes.

So basically, the policy is aimed to prevent fraud and money-laundering. While I don’t question the motivation to extend the ACH hold period, still 60 days are excessive. As far as I know, there isn’t any other broker hold fund for this long. Not even banks. Right now the ACH policy at TradeKing is as follows:

ACH Deposits
- 5 business days to clear for trading
- ACH deposits must remain in your account for a minimum of 10 business days prior to withdrawal for clearance purposes and may only be withdrawn via ACH to the bank account of origin. Withdrawals of ACH deposits via check, wire or Account Transfer may only be made after 60 calendar days from the date of deposit. Other restrictions may apply if fraud or other potential anti-money laundering concerns are raised.

When I ACH funds to my brokerage accounts, I usually use them immediately after they are cleared. And there were only a few occasions when I actually needed to transfer money out. So I don’t think this policy will affect me that much.

Will you continue to do business with TradeKing as usual after the change?

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus