TradeKing Broker Review
Below is a TradeKing broker review that dives into the company’s prices and tools they offer and how they compare to their competition. TradeKing is a relatively new discount brokerage firm that opened its doors in 2005 with the idea of targeting investors who want to manage their own accounts at an affordable price.
TradeKing prides themselves on their customer service and their low cost commission structure that rivals and often beats the biggest brokerages on the street. They have received multiple awards and acknowledgements for their services over the years including:
- Ranked #1 discount broker in 2006 and 2007 by SmartMoney
- Earned the maximum 5 stars for customer service in 2008, 2010 and 2011
- Consumer reports ranked them 3rd out of 19 brokerages in an independent survey in 2007
TradeKing recently purchased MB Trading which was a big step in the right direction as they can now offer Futures trading to their portfolio with robust trading technology. “MB Trading platform will also add Futures trading to TradeKing’s portfolio of offerings for the first time. Other benefits include the ability for qualified clients to gain direct market access, offering greater trade execution control for those active traders; access to MB Trading’s paper trading capability; and MB Trading’s Market Analysis Software offerings.”
This strategic move will attract the more active trader who is looking for superior technology and direct market access. TradeKing recently added TradeKing Advisors to lend a hand for the customers not interested in managing their own accounts.
TradeKing Advisors creates a fully diversified portfolio and handles periodic re-balancing automatically. On April of 2016 Ally Financial announced that they had acquired TradeKing but as of right now there is no news that this will change anything for customers in the near term.
Commissions And Fees
TradeKing’s commissions and fees are extremely competitive with equities starting at a low flat rate of only $4.95, $9.90 per round turn, and options starting with a base rate of $4.95 plus $0.65 per contract. TradeKing’s ability to offer significantly discounted commission rates is driven by the firms lack of brick and mortar locations as compared with the other online broker stalwarts E*trade, TD Ameritrade, and Scottrade to name a few. Below you will see how this compares to their competitors for both equities and options based on different contract amounts.
TradeKing does offer a plethora of trading tools that can help traders navigate the complex markets. Most of their tools cater to the option trader with an option pricing calculator, probability calculator, profit + loss calculator, option and strategy scanners, screeners, maxit tax manager and Tradeking Live (their web based trading platform).
The option calculators are great for determining prices and managing positions and the maxit tax manager helps simplify your trade data for taxes including corporate actions, dividends, wash sales and short/long term gain or losses to name a few. TradeKing offers a wide range of trading options including equities, options, ETFs, futures, mutual funds, and fixed income.
Furthermore, TradeKing is one of the only brokerage firms that offers no account minimums for the standard trading account allowing persons with limited trading capital to get involved with the markets. Another beneficial tool TradeKing offers is the Options Playbook that takes the complex world of option trading and breaks it down into simple terms that anyone can understand.
So whether you’re looking to understand basic option strategies or complex condors and spreads, this book will break down each strategy that is easy to understand for even the most novice trader. More information can be found here.
As you can see, TradeKing has some great tools and services to utilize but there are some drawbacks. With the lack of brick and mortar buildings you’ll be doing everything online so for those of you who like a more face-to-face interaction then this may be a bit of a setback for you. However, their customer service is superb and will go out of their way to assist their clients in anyway.
Another disappointing feature for the more active trader is the lack of hotkeys and a web-based trading platform with limited platform customization that can be slow as well. Lastly, TradeKing does charge an inactivity fee for accounts with less than $2,500 and haven’t executed a trade in a 12 month period.
Overall, if you’re looking for a broker with great service, excellent commission and fees with a plethora of trading tools, especially for the option trader, then you may want to give this broker a chance. They do not offer a demo account but with no account minimum you can open an account and check it out before making a deposit.
This is a great broker for the casual investor/trader but if you’re looking to make a living as an active trader this broker may not be suitable for you as the platform can be slow and cumbersome for traders looking to get in and out of positions quickly. As always, if you have questions or thoughts, please comment below!
Questions or feedback? Make yourself heard in the comments section below!