TradeKing Online Brokerage Review – Discount Trades & Quality Customer Service
November 19, 2008
TradeKing is one of the best online discount brokers thanks to its great customer service, user-friendly interface, and low fees that start at $4.95 per trade (plus .65 cents for options contract), with no hidden fees and no account minimums.
In the Media: “Discount Broker of the Year” in 2007; SmartMoney Magazine; Top-Five Brokers, 2007; Barron’s
The TradeKing Web-based platform features powerful online equity, options and fixed-income trading tools, including real-time portfolio information, advanced order entry, customized charting and alerts, free research and integrated news, stock, option and mutual fund screeners, volatility charts, a pricing probability calculator, enhanced option chains and interactive educational information.
A pioneer in incorporating social networking features in online trading, TradeKing gives its clients unprecedented means for finding and connecting with like-minded investors to share ideas and strategies. TradeKing is a privately held FINRA member brokerage firm. Each account is protected up to $25 million through SIPC and TradeKing’s clearing firm.
Our Take: What do you say about an online trading platform where the same trading rates apply to everyone, and where the emphasis is on a “Match.com”-like environment where like-minded traders can meet up and prepare notes on their favorite stocks?
More and more, traders are saying “yes” to TradeKing since they have a reputation for high quality, but low cost. We decided to kick the tires a bit and find out if the word on the street is on the mark. If you prefer to watch, rather than read, check out this video below. The first 20 seconds or so are pretty general coverage of the brokerage but then it goes into more detail on it’s trading tools and shows examples of them in action, particularly their options tools.
Opening a TradeKing Account
It didn’t take me longer than eight minutes to open a TradeKing trading account. I cheated somewhat by not reading the “terms and conditions’ section as closely as I should have, make sure you the extra time and read the fine print. Even then you should up and running in under 15 minutes.
Here’s what TradeKing wants from you, info-wise:
— Email Address
— Social Security
— Trading background
— Financial info (i.e., your annual income, net worth, liquid worth)
The security feature is a welcome one, if a tad different (access goes through a keyboard-based password system). But it only takes several seconds and I appreciate the fact that so much emphasis is put on privacy and security. That should keep a lot of skeptical spouses satisfied.
TradeKing Fee Structure
As I noted above, TradeKing has a very democratic stance on trading fees — the same rates apply to everyone – beginner or expert, large account or small, regardless of how often members trade. That goes for both market and limit orders, with no hidden fees.
For stock and exchange traded fund executions, TradeKing charges $4.95 per transaction. The same rate applies to options trades, with an added .65 cents per contract.
Minimum Requirements: How about none? With TradeKing, there are no minimum opening balances. Better yet, there aren’t any maintenance or inactivity fees to toss you a curveball when you’re not expecting one. Compare that with a site like eTrade, where quarterly inactivity fees are as pervasive as bananas at a King Kong family reunion (they charge $40 for inactive accounts).
Transferring money. Check TradeKing for coupons before transferring any money into a new account. The day I visited the site, TradeKing had a $150 coupon deal for new transfer accounts, where they would reimburse up to $150 any transfer fees incurred. (The company also has a $50 gift if you sign up a friend).
For new investors, be forewarned. You might be itching to begin trading in your new account but your money transfer is frozen, for administrative purposes, for five business days. And you can’t take money out of your account for 10 days. TradeKing does allow you to place any unused money you have in your account into a TradeKing sweep account where it can earn interest. Check with a TradeKing customer service rep to make sure you’re benefiting from this option.
Trading with Trade King
Again, democracy reigns at TradeKing. If you’re an advanced trader, you can pretty much take off and trade on your own right away. The trading interface is clean, elegant and intuitive. For beginners, TradeKing walks you through every step of the trade. For example, on options trade, TradeKing has an “option chain” function that takes you by the hand and shows you how, step-by-step, to execute a trade.
By and large, you’ll be entering orders for stocks and ETFs (Exchange Traded Funds) in either dollar or share amounts. After entering your trade, you can preview the order and, for mega-safety buffs, enter a second, distinct trading password for your protection.
Taxes and Account Administration. TradeKing stores all of your account information, like trades executed, trade confirmations, regular account statements, tax information – all on one easy-to-read page. You can customize the page yourself, creating alerts and setting up features like Maxit Tax Manager, which helps you track realized and unrealized gains and easily calculate your trading and account tax liabilities.
TradeKing Customer Service
: Nice – I called TradeKing on a Monday – typically a chaotic trading day – and was talking to a pleasant customer service representative within half a minute. In this category, TradeKing reigns. I also sent an email to TradeKing, but that took a bit longer – about 10 minutes to get a response (still, not so bad in this, the age of the indifferent customer service rep).
Also, you can reach TradeKing via instant message, which is a wrinkle not found in most online trading sites. Even big dogs like eTrade (I hate to keep picking on them, but there you go), Schwab and Scottrade don’t have instant messaging customer service capabilities yet.
Overall, TradeKing was rated number one in customer service by SmartMoney Magazine, ahead of E*Trade, Scottrade, Fidelity, Charles Schwab and TD Ameritrade.
Networking/Social Community: On the company web site, TradeKing touts that it was honored by non-profit think tank The Society for New Communications Research (SNCR) for its achievement in applying social media to create its 10,000 plus-member online investor Community. TradeKing’s pioneering use of social media was recognized in the corporate category for “Collaboration and Co-Creation” along with some of the nation’s largest brand innovators, including Dell, IBM, Cisco and Wal-Mart.
The TradeKing Community was launched in 2005 to give individual equity and options traders a place to connect and share ideas in an open, yet trusted environment. In just a few years, the Community has grown to include more than 10,000 active members who participate through blogging, publishing their Certified Trades and commenting on the rationale for their investments.
TradeKing Fact Sheet
TradeKing offers . . . .
— Low, flat fees with no minimums and no hidden fees
— $4.95 per trade plus $.65 per options contract
Individual online brokerage accounts for:
• Options trading
• Equities and ETF trading
• Mutual funds trading
• Fixed-income trading
A user-friendly website with:
• customized settings for tracking balances, orders, holdings, alert
• sorting of transactions by symbol, duration, security, date, status and
• transparency into overall account records
• advanced tools, research, analysis and educational information
• innovative community networking capabilities to help connect like-
Key tools include . . .
• Options calculator with advanced volatility calculations
• Profit and Loss calculator to study potential gains/losses or track
• Probability calculator for historical or implied volatility to calculate the
probability of success for a specific option strategy
• Options Scanner to screen over 150,000 option contracts to find
• Strategy Scanner to screen the options universe for specific strategies
that meet certain criteria
• Stock Screener to find the stocks to suit a certain strategy
• Mutual Fund Screener to find the right mutual funds for specific
• Streaming Quotes for access to streaming and real time investment data
Research offered . . .
• Market snapshots of exchange activity, quotes, news headlines and
industry commentary; in-depth research on company profiles and
performance, investment ratings, growth rates and other key
• Fundamental & Technical Analysis tools include an options chain
with strategic guidance on specific strategies; volatility charts for an
underlying stock or index; comprehensive Earnings Center and a
robust set of technical analysis tools powered by RecogniaTM that
feature chart pattern recognition and price forecasting
Community features include . . .
• Daily blog following industry happenings, trends and newsworthy tips
• Message boards available to post comments or questions
• Random sample of other trades executed on TradeKing
• Ability to find other members who adhere to similar research or
trading styles and follow similar investment strategies
• RSS news and podcasting available
Education sources include . . .
TradeKing’s Education Learning Center includes newsletters, webinars, three blogs, including a dedicated Options Guy blog, definitions of common trading strategies, glossary of trading terms, as well as recommended books, software and other informational websites
TradeKing is Wall Street’s version of the Great Society, where investors of all stripes are welcome and encouraged to trade according to their needs, talent and experience.
For beginners, it offers plenty of tutorials and an easy-to-navigate trading and account management interface.
For experts, there are plenty of sophisticated tools and toys to enhance your trading experience – all for one of the lowest trading fee structures in the industry. Plus, the social networking aspect plugs you nicely into a spirited community of active traders who likely share your enthusiasm for trading online.
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