The Good:
1. $4.95 a trade for limit, stop, and market orders; $4.95 a trade plus $0.69 per option contract. Trades execute quickly.
2. Great tools for options traders, including a Profit/Loss Calculator, which calculates your profit from rising option values, an Options Calculator, which calculates volatility and risk, subject to your criteria, a Probability Calculator, which determines the probability of target stock prices in the future, and an Options Screener. These are provided by iVolitility. If you have a Zecco account, you should be familiar with them.
Moreover, TradeKing makes things faster and easier by letting you do multiple transactions on the same page. For example, let's say you want to write a covered call. At most brokers you will have to go to a couple of different places on the site, to buy the stock and to sell the call. At TradeKing, you simply go to the Options Trading menu and click on Covered Call. You do everything in one place at the same time. In addition to covered calls, they have faster ways of doing protective puts, spreads, straddles, strangles, combos, butterflies, condors, and collars. You can also trade Fixed Return Options.
3. If you don't know what all these are, there's an Education Center for new investors, with a few pretty good demos and tutorials on option trading.
4. Customer service is still good, but seems to be deteriorating. They always pick up the phone during business hours during normal market conditions. When things become a little crazy their phone lines are jammed (see comments below). Should you email them, TradeKing responds quickly, usually the same day. They used to respond the same day to emails sent over the weekend. Now I have to wait until Monday. The live chat feature is another way to talk with a customer service rep. It usually takes less than a minute to get a hold of someone.
5. Free dividend reinvestment on stocks and ETFs, but see #2 below (the not so good).
6. Wide selection of mutual funds and fixed income (CDs, various bonds). (CDs have to be purchased over the phone.)
7. In addition to the regular, low yielding cash fund, TradeKing offers three different cash sweeps that have higher yields, but see #3 below (the not so good).
8. Unlike most other brokers, TradeKing offers an ACH withdrawal option. This is much faster than requesting a check.
9. Forums, blogs, and other user generated content is available. You can post your own stuff, or get trading ideas from others. Some TradeKing users have elected to have all their trades posted. It can be interesting to watch their progress, or follow them, should they have a good track record.
10. TradeKing offers check writing and debit cards for qualified accounts.
11. If you follow a newsletter and buy the stocks it recommends, TradeKing offers to make these trades automatically for you for some newsletters, should you want to.
12. People seem to really love the Maxit Tax Manager, a tool that tracks gains, losses, and other information to help you with your taxes. (My own experience with this program has not been very good, as the information the tool provided me was wrong. This is probably the result of my having transferred some stocks into the account from another broker).
13. Transferring from another broker to TradeKing is a quick and painless process. They frequently have promotions where they reimburse you the transfer fee your other broker charges.
The Not So Good:
1. Real time quotes are provided for active traders. If you trade only once in a while, real time quotes show up only at trade preview screens.
2. If you want to reinvest your stock dividends, you have to contact customer support. You have to tell them for which stocks you want your dividends reinvested. Should you decide to stop having your dividends reinvested, you also have to contact customer support. It would be much easier if TradeKing had a mechanism like Firstrade, SogoTrade, or Sharebuilder, which lists your positions, and with a simple click, lets you choose whether you want to reinvest dividends for each position separately.
3. If you want to use one of TradeKing's three cash sweeps, you have to contact customer support.
4. No physical location to visit in person, if you prefer that sort of thing.
5. The ETF and stock screeners and stock research tools could stand to be better. MSN's free screener is much better.
6. The site can be a bit difficult to navigate at first, but you get used to it.
7. You can only have one linked bank account at a time for ACH transfers. This can be a pain if you like to fund your TradeKing account from more than one bank. Each time you want to do it from a different bank, you have to delete the one listed, add the new one, and then wait 5 days for it to be authenticated. It's easier--and faster--to send a check.
8. No instant verification of the funding bank account for ACH transfers. You have to wait 5 days.
9. No load mutual funds are $14.95 a trade. While cheaper than many other brokers, this is still rather expensive.
The Bad:
1. The site becomes noticeably slower when the markets experience unusually high volumes. September 19, 2008 had a quadruple witching (lots of different options contracts expiring). Some TradeKing customers could not access the site or contact customer support (see comments below). I only experienced problems at the end of the day. This can be catastrophic for someone looking to unwind lots of contracts on expiration day. No doubt thousands of dollars were lost on 9/19/08.
2. I have experienced execution problems with options a few times. My limit order matched the ask price, but the order was not executed on a few occasions.
3. I have also experienced a glitch when attempting to buy fixed return options. These are cash settled options invented by TradeKing's CEO, where each contract is either worth $0 or $1 at expiration. I tried to buy several GE "finish higher" calls. My order was rejected. It said I didn't have enough account equity to buy the underlying shares if the contracts were exercised. But these are cash settled options (that is, I could either lose the amount I paid, or I could have my account credited with $1 per contract), and I had enough money in my account to buy them.
4. 10/6/08 While I tried to change one of my option orders, TradeKing became inaccessible, and stayed that way until market close.
Any broker can work great when the market is peaceful. What makes one broker better than another is how it performs under stressful conditions. TradeKing, it appears, is not up to it.The Bottom Line:
Given at least two site outages on very important trading days in two months, I can no longer recommend TradeKing at this time.
Updated: October 6, 2008
This TradeKing review will be updated at least every six months.
Are you already a TradeKing user? Please share your experience with potential customers by posting a comment.
18 comments:
Weird. I've never had to contact customer service to reinvest my dividends. It is done automatically to my knowledge.
You probably have to call to request NOT to participate in DRIPs.
Actually, you do have to contact TradeKing to reinvest your dividends.
https://www.tradeking.com/PublicView/services/FAQ/accounts.tmpl#DRIP
POOR EXECUTION, DELAYED QUOTES AND PROBLEMS WITH THEIR SYSTEM.
After 6 months with TK, I was catched by the 4.95$ commision, whichs is not bad. Im a pure options trader, I only perfom couple condors and a double diagonal once in a while. Usually happens the system remove all my cash avaiable, so I can not perfom any debit transaction (buy anything or execute my diagonals). This problem happens every month, besides the 20 min delayed quotes and sometimes im totally blind executing my transactions because this BIG disvantage. I WONT RECOMMEND ANY FRIEND THIS BROKER.
This is a pretty good review. I use both, I like TradeKing better.
http://www.tradeingroups.com/tradeking-vs-scottrade-you-decide/
TradeKing (TK) is the one of the worst platform I have come across. I had few problems in the start regarding the order execution. They are slow compared to other brokers. I missed some nice trades due to such slow executions. I missed ABK buy which was running higher and I had to change the price again to match the rising price. Trakeking not worth the pain for less fees.
I was thinking of making 20K transfer to my TK account thinking that I wont face the same issues but luckily I was trading yesterday and kept my buy order, I saw the bid price going lower than my buy order price but it did not get filled. It just showed open order. I had to cancel the order. I tried once again after a while and I faced the same issue. The stock was consolidating intraday. I placed another buy order and faced the same issue. I got into chat with one rep and I was told that the stock never went below my buy price. I could not believe it. I was watching level 2 prices on Ameritrade and TK were such a liars! Worst thing was that my stock brokekout higher intraday when I was chatting with the rep.
anyway, I am switching the broker. Already using Ameritrade and Zecco. I am getting thinkorswim.
Tradekings servers went down 9/19/2008 for most of the day, resulting in slow or no ability to access web site, and of course phone lines were jammed. Granted it was a very volatile session but alot of people lost alot of money because of poor back up planning. Their response has been indifferent with little public acknowledgment of the disaster. Otherwise Tradeking is great.
"Tradekings servers went down 9/19/2008 for most of the day, resulting in slow or no ability to access web site."
I experienced no problems until around 3:50 P.M. I'm glad I didn't have any positions that needed closing, but I was unable to buy expiring GE Fixed Return Options. I plan to update the review this weekend.
Subject: Not allowing me to sell my stock.
A few days ago on 10/31/08 I bought ( MGM ) when the stock started to tumble I tried to sell it, and tradeking sight would not let me. It returned a message saying:( that I was trying to sell a stock that not yet settled ). This cost me, I lost over a dollar a share so I called and I was told that I had to have a margin account in order to buy and sell up to 3 stocks in a 5 day period of time. so I opened a margin account and waited. After about 2.5 days I got a letter saying my margin account was now open, So tried to sell ( MGM ) and there sight let me. The next day I bought (s) and (GNBT). I held it for 2 days and then tried to sell it. Again there site would not let me. I got a message that said the account was restricted. So I called trade king and ask why. First I was told I bought more shares of (MGM) then I had money so the account was restricted for 90 days. I told trade king I did not buy to many shares that after I bought my shares that I had money left over. Then I was told that I sold MGM to soon. Well after I opened a margin account 2.5 days latter, I told tradeking there site let me sell (MGM) so I assumed that everything was alright because the only thing that will over ride there site, is if a person calls in and tell them to sell it. Which I did not. Trade king told me that they sent a letter saying that I was restricted, which they did not. ( I told tradeking check there sent mail and you will see that they did not send me a letter ) and even if I was restricted why did trade king allow me to buy more stock after I was restricted? And if I was restricted I told tradeking they need to reimburse me for the difference. The money I lost on the stock after I was restricted since I was not allowed to sell it. It seem to me a person can buy stock at Tradeking but they can not sell it. So I got fed up and called and asked trade king to sell all my stock, (S) (SIRI) and (GNBT) I had to argue with them for over 30 min. before you sold my stocks for me and it was falling in price.
Sincerely, Judy T Matthews
I received the following comment through email from Mary:
"I first signed up for the TradeKing account at night on 11/3/08. I entered a bad email address, and had a lot of trouble changing it. It would say it was changed, then it would display as not changed, even when I closed everything and logged back in. On 11/4, I received 3 emails in a row (1 minute apart) telling me that my ACH profile request was received. (Who knows what was sent to the bad email address.) Then, on 11/7 I received 2 emails in a row telling me that:
"'This email is to inform you that we were unable to establish your ACH profile for the following reason: Duplicate Request
You will need to resubmit the online ACH profile and the requested documentation.'
"I couldn't believe I would have to resubmit the documentation, and that is when I wrote asking that they just delete whatever duplicates they had and continue with the good account number, which they did. As I said before, the person I have been emailing has been very helpful. He received my email over the weekend and said he would have to wait until Monday to check with the Operations Department to see what was going on with my account. He emailed me first thing, before 8AM, Monday morning telling me the account was set up."
I was with TradeKing for only a few months. I found that it would not handle orders for a lot of stocks under $1.00 a share. And that's what I trade the most. This was very aggravating, so I switched to Zecco.
Tradeking is awful, it took me a while to figure out that their clearinghouse is terrible. They can only short a few securities. Whats the point of cheap trades if you cant get the trade at all. They covered up their crappy system for a while but i eventually figured it out. Stay away from these guys, Interactivebrokers is better in every way
To the writer, What brokerage do you recommend?
Nik,
At this point in time I like SogoTrade the best (but this can change).
It depends what you're looking for.
If you are a buy and hold type, wanting to reinvest dividends and dollar cost average, Sharebuilder is great.
If you want to trade, so far I've had the best experiences with SogoTrade, Scottrade, and Fidelity. SogoTrade is the cheapest ($3 a trade), but it doesn't offer options trading.
Scottrade, for me at least, has the best executions but is more expensive ($7 trade, $1.25 contract), doesn't offer multileg options, and their customer service sucks (but you can visit them in person).
Fidelity can be more expensive (trading fees depend on how often you trade) but offers multileg options and more accessible customer service (you can call at midnight and talk to a person).
I have an IRA account with TD Ameritrade, but I haven't used it enough to develop an opinion.
The cheapest broker I know of (but haven't tried yet) is Options House. It's $2.95 for stock trades and $9.95 for options trades (regardless of number of contracts, with multileg orders, etc).
I suggest you try out SogoTrade (they give you a month of 100 free trades). If you don't like it, close all your positions and transfer your money back to your bank account and try another broker. For example, if you're opening an account with $25,000 or more, TD Ameritrade will give you a month of free trades. If you don't like that one, move on to the next (contact me for 3 free trades when opening a Scottrade account).
I hope this is helpful. Good luck.
Correction on TD Ameritrade -- you get a month of free trades if you open an account with $2,000 or more. You get the free trades plus $100 if you open an account with $25,000 or more. This offer expires 3/31/09, but they've been extending it for a while now.
I came across your review on tradeking because as a first time investor I have only a sub-$1,000 ammount to start with...they do not have a set minimum.
Now I'm not so sure.
Can you recommend one that has no minimum for someone to invest a little pocket change ($500 to be specific)
Hi Gunner,
You might be interested in SoGoTrade or Sharebuilder.
Sharebuilder has no minimums for opening or maintaining an account and charges $4 for automatic trades, and it has free dividend reinvestment (see review for details: http://www.slackerwealth.com/2007/12/sharebuilder-review.html ).
SoGoTrade (my review: http://www.slackerwealth.com/2008/07/sogotrade-review.html ) has a $500 minimum for opening an account, but no minimum for maintaining your account. They currently have an offer for new account holders. You get 100 free trades for a month. Regular trading fees are $3.
The cheapest broker I know of (I'm trying it out right now, haven't formed an opinion yet) is OptionsHouse. They charge $2.95 for stock trades, but have a $1,000 minimum to open an account.
I say try out both SoGoTrade and Sharebuilder. They're both great in terms of getting your money out. If you don't like one, just sell your stocks, move the cash to your bank account, and then open an account at the other.
If you're looking to invest and dollar cost average in no transaction fee mutual funds (with $500 starting out, that's probably the best idea) you might want to try out TD Ameritrade. They have a decent selection of no transaction fee mutual funds with $500 minimum initial investments. In your situation, however, I wouldn't use TD to buy stocks because the $9.99 commission will eat up all your money. TD Ameritrade doesn't have a minimum initial funding requirement as far as I'm aware.
I was retaliated by tradeking when I filed a complaint to SEC concerning something wrong that they told me. I did not know it was wrong at the time.
Poor working software and many employees that give wrong information.
I have been trying to transfer my accounts from Trade King to Vanguard since I get a better fee there due to my account size. They have refused to transfer my Simple IRA 3 times now even though the account has been open for over 2 years. Their CS reps tell me the problem has been solved but the transfer gets refused again.
The only thing that I can figure is that so many people are attempting to ACAT their accounts that they make up lies to refuse the transfers.
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