Section 1: Web Site Functionality
NOTE: TradeKing would have made the top ten if we had reviewed them in time for our 2008 Online Brokerage Rankings. We're not going to tell you where they would have landed because that would spoil the fun of the 2009 Rankings but let's just say that we were very impressed overall.
Navigation is smooth and intuitive at Tradeking. They have a very large site but it's well organized with tabbed navigation and logically sorted sections. They have tons of info, features and even a social networking section so you may feel a little overwhelmed at first, but the clean layout will help you learn your way around pretty quickly. If TradeKing's only navigation issue is tons of features for their customers, then they're in pretty good shape.
Even those that are new to the internet or to online trading don't have anything to worry about at TradeKing. We were impressed with the quality of the educational material and tutorials that they provide for beginners and new members. Each walkthrough looked great, complete with video demos, screenshots, and step-by-step instructions.
TradeKing is a dependable site, we didn't find any complaints about crashes, glitches or extended downtimes and we didn't experience any problems during our review. Sometimes screen loads were a bit sluggish but you can always count on the most important ones, like account summary and trade screens, to load as fast as any competitor.
TradeKing offers a lot in the way of customization, it was fun to play with the many options available. You can change the layout of your account summary screen, add notes on your portfolio screen, and we were thrilled to FINALLY find a site that put some effort into the historical activity screen. You can slice and dice your trade and transaction history by selecting different types of transactions, time periods and/or sorting by any column on the chart. Very strong in this category.
TradeKing doesn't offer a trade guarantee and that was a little surprising considering they cater to the option and day trader crowd. That being said, we found very few complaints about slow or inaccurate executions. People seem very satisfied with TradeKing's execution overall, it's just odd not to offer a guarantee if you're going to specialize in short term trading strategies.
Section 2: Trading Costs and Fees Rank
Intuitive Commission Structure?
They advertise $4.95 per trade and they deliver. There's no catch and there are no conditions, trades really are only $4.95 for EVERY client. They don't try to make up for extremely low transaction fees by sneaking account fees or inactivity fees in either.
Kudos to TradeKing both for having integrity and also for putting the customer relationship at the top of their priority list. There's not enough of this in today's corporate environment, especially when it comes to pricing.
Minimum to Open an Account
No minimum required to open an account.
Internet Trades = $4.95 per trade.
Interactive Voice System = $4.95 per trade.
Broker Assisted = $4.95 per trade.
Market and Limit Orders
Internet Trades = $4.95 per trade + $0.65 per contract
Interactive Voice System = $4.95 per trade + $0.65 per contract.
Broker Assisted = $4.95 per trade + $0.65 per contract.
No-Load No-Fee Funds = None available.
No-Load Funds = $14.95.
Load and Fee Funds = No fee to buy but $14.95 to sell.
Tip: Avoid any funds with loads or fees. With the vast selection of no-load no-fee offered by many of today's online brokerages, there's no reason to ever pay them!
Treasuries, Bonds & CDs
Bonds: $4.95 per bond, $14.95 minimum per transaction
Treasuries: $24.95 per transaction
Certificates of Deposit: $24.95 per transaction
Rates & Fees
Flat 4.75% for all traders regardless of balance. This is a great deal compared to the rates that traders with small portfolios pay at most sites.
Interest Paid on Cash (Sweep): 0.90% Money Market Sweep
Checking Available? Yes
Paper Statements: $2.50 per month
Electronic Statements: Free
Wires: $20 US, $50 Foreign
Section 3: Customer Service
The customer service hours are limited to 8AM to 6PM EST Monday - Friday for both phones and live chat. That's a little limited compared to several of the other major online brokerages, hopefully TradeKing will expand their hours for either Chat or Phones until at least 9PM during the week soon. It's tough for those who have to wait until they get home from work in the evening to make a call by 6PM EST, especially in west coast time zones.
If you're able to call during business hours you won't have any problems with any basic questions. Wait times are very short and reps are friendly and knowledgeable. You may have trouble getting answers to advanced questions since they don't have specialized support for financial planning, mutual funds or bonds. They are usually able to answer advanced options questions though or at least point you to some of their great educational material.
Live Chat isn't a common feature yet, but it is a wonderful perk and TradeKing was one of the first to offer it. TradeKing also offers the traditional email and FAQ support, and both are solid, but considering you have live chat and short wait times for phone reps, you'll probably never need either.
Advanced Support (Options, Funds, Bonds, etc.)
TradeKing has good support for options traders, but you won't find the fund, bond, or advanced planning specialists that are available at some of the higher end sites.
Section 4: Research Tools & Investing Information
Market Research & Analysis Tools
Based on the strength of the tutorials they provide for new members and beginners, we were very excited to see TradeKing's research and analysis tools. They definitely delivered in the "tools" category but we were disappointed in the "research" category. All of the focus seems to be on options, anything else they provide seems to be more of an afterthought to make sure they covered all the bases with at least minimum effort.
TradeKing decided not to use third parties much, most of the reports available are internally generated and there doesn't appear to be a lot of horsepower behind the research. However, they do shine in the "Tools" category if you like to do most of your own research and analysis, we'll talk more about this below.
We will give credit where it's due, the options support is truly superb. They have tons of tutorials if you're a beginner and they also have some of the best tools in the business for advanced option traders. One of the most interesting training features is the Option Guy's Blog. He provides a weekly commentary and all of the articles that we read were interesting, educational and fun to read. He adds humor to his posts rather than boring you to death with the mind-bending fact and analysis dump common to most options publications.
TradeKing's ETF Screener is one of the best we saw at any online brokerage. ETFs are a relatively new investing vehicle so there aren't many great screeners available for them yet. TradeKing is miles ahead of most in this category. Our favorite feature was that they've already incorporated "pre-built" screens such as Income Producing ETFs, Top Performing International ETFs, or High Yield Bond ETFs to name a few.
The Mutual Fund Screener was competitive with the other major online brokerages but we were a little disappointed with the number of selection criteria available. TradeKing's ETF tool stood head and shoulders above the competition but the Mutual Fund Screener is only mediocre. They were in the process of revamping parts of the Mutual Fund Center during our review so hopefully they will have added more criteria and beefed up the Predefined Screens section when we do our 2009 Ranking review in December.
Like the Mutual Fund Screener, the Stock Screener is certainly on par with the other online brokerages but it can't measure up to tools available at third party sites specializing in research and analysis. There are 60 criteria to choose from, which is a bit limited, but they did incorporate all of the critical ones, you just won't be able to "tweak" with some of the secondary criteria available in tools at sites like Mornginstar.
This tool is basically a fancy calculator that spits out a score for whatever stock you want to evaluate. Each security is ranked in several different categories such as growth, value, and profitability and then you get an overall score that tells you if it is currently rated a buy, hold or sell.
TradeKing doesn't share how this tool works and the data provided just doesn't give you enough information to figure it out by yourself. It's hard to imagine that many people are using this tool. You have no way to tell if the recommendation you're receiving is good or bad. All you receive is a mysterious score based on calculations and data that aren't made available for review or validation.
If you're an options trader, TradeKing has everything you'll ever need regardless of your experience level or trading needs. They can accomodate any kind of trade or options strategy and they have wonderful tools, training, community and support. There are too many option tools to cover in this review so we're only going to highlight our two favorites, the Probability Calculator and the Option Scanner.
Probability Calculator: This is a cutting edge tool, it was definitely designed with the option trader in mind but it's useful and fun for any investor. Creative growth or momentum investors can also get a lot of mileage out of this tool, it's great for analyzing price strength and price behavior. We've seen a similar tool at OptionsXpress and we loved it there as well, this should be standard at every discount brokerage soon. Since TradeKing was one of the first to offer the tool, it's likely that they'll stay ahead of the competitors in development.
Options Scanners: TradeKing offers two types of Options Scanners, a strategy scanner and a trade scanner. Basically, the strategy scanner can help you narrow your search to focus on a particular type of trade. The trade scanner then helps you identify the specific combination of contracts that would be the "optimal trade" for the strategy you've selected. These two tools are a powerful combination when used together.
The TradeKing Community is TradeKing's attempt to leverage the social media craze and create a place where traders can share thoughts, opinions, and ideas. TradeKing is having more success with the social networking component of their site than any other brokerage attempting to create a similar community atmosphere. The forums are a little dead but the blogs are outstanding and there are a lot of active and knowledgeable readers and contributors.
Level II Quotes & Streaming Data
Both are available
Section 5: Perks
Maxit Tax Reports
This is a TradeKing's newest tool and it is amazing for those of us that don't want to spend hours and hours trying to keep track of and interpret all the tax implications of our trades. We saw competing versions at other brokerages but none measured up to Maxit, it's like having your own personal accountant on call.
- Track the cost basis for all of your investments
- Adjust for corporate actions (splits & mergers) and wash sales
- Specify special sales such as first-in-first-out or last-in-first-out to minimize your tax exposure
- Calculates realized and unrealized gains and track losses
- Generate Tax Reports such as the Schedule D automatically
Newsletter Tracking & Trading
This is one of the most innovative offerings we've seen at any online brokerage. TradeKing could take portfolio management to a whole new level that we had never even considered before seeing this tool.
Here's how it works. If you subscribe to any of the investing newsletters that participate in the auto-trade program, TradeKing will basically manage your portfolio. You will automatically purchase or sell whatever stock, bond, fund or option trades your newsletter recommends.
IMPORTANT NOTE: We are excited about the potential of this product but we don't recommend it yet and here's why. TradeKing doesn't support any of the major newsletters with 10+ year track records or newsletters that are tracked by independent rating agencies such as the Hulbert Financial Digest. We've never heard of the newsletters currently signed up for auto-trade and most are options related. High risk trading with unproven newsletters is a very bad idea.
However, if TradeKing branches out into mutual fund, stock and ETF newsletters and picks up some of the industry's best with proven and documented track records like The Prudent Speculator or Equity Fund Outlook, this could be the future of portfolio management. Part of the problem with newsletters is that you can get great advice but the trading is up to you. You have to make sure you buy and sell every recommendation and that your allocations match. Can you imagine automating all of this so that your active portfolio suddenly becomes passive? We'll be watching this feature closely to see if they can sign any of today's best newsletters up for the auto-trade service.
Section 6: Product Offerings
IRAs and Roth IRAs
Custodial and Education Savings Accounts
Section 7: Security
Yes. SIPC protects securities in your account up to $500,000.
Firewall Secured and Fraud Protection
Yes. All of the major sites have dependable security. They can't afford to make mistakes, they wouldn't survive a year if they gained a reputation for mishandling money or for lax security.