MBTrading.com - Researching A New Stock Broker
I am warming up to my idea of making a separate brokerage account for all of the free money I’ve gotten from banks, brokerages, and credit card companies. After some preliminary research, I’m leaning very heavily towards one broker - MB Trading, as they feature:
» $2,000 minimum to open.
» No minimum balance fees, no minimum commissions per month.
» Per-share stock commission of 1 cent per share up to 500 shares, and 1/2 cent per share over that. The minimum commission is $1. This means as long as you are trading less than 100 shares, you’re only paying $1 a trade!
No minimum fees, and limit/market trades starting at $1 works for me. I am just looking for a low-cost no-frills stock brokerage that is cheaper than my current I-Zone. This broker does charge a $35 annual fee for IRAs, and is also not good for mutual funds since they charge $50 a transaction for no-load funds. They also require you to download a Windows-only standalone application to trade from, or to telephone your trades in.
To fund an account, you can either wire the money, send them a check, do an ACH transfer, or make a broker-to-broker transfer. However, it looks like their ACH transfer capability is currently down. That’s not good. To withdraw, the only free way is to request a check by mail.
The other broker I am considering is the venerable Interactive Brokers (IB), which has been around much longer and many active traders use. IB is very similar to MB Trading, but it requires $10 in commissions a month. On the other hand, it does offer a browser-based trading interface.
Here are some good additional information sources I’ve been reading:
MB Trading Reviews and Interactive Broker Reviews at EliteTrader.com . (More from a daytrader point of view, also some reviews are a bit old)
Interactive Broker vs. MB Trading Part 1 & Part 2* at Fool.com (From a non-daytrader point of view)
I’ll most likely end up opening an account with MB Trading shortly, and put $2,000 in it to start investing aggressively in an ETF portfolio.
* Sign up for free Fool.com membership with a temporary spam e-mail, as they will send lots of marketing e-mail to you.
December 27th, 2005 at 12:06 am
Stupid question but what’s the difference between IZone and regular Ameritrade? Other then IZone is $5 and Ameritrade is $10.99. Only thing I saw was that Ameritrade comes with Streamer for free while IZone wants $9.99 a month.
December 27th, 2005 at 8:55 am
I’m also thinking about opening an account with MB Trading.
December 27th, 2005 at 11:02 am
Johnathan,
I am looking forward to the results of your ETF research and journey into stock investing. Happy researching !
December 27th, 2005 at 12:39 pm
I-Zone you don’t get any phone support. You can only use their online/e-mail contact form. You can still place trades over the phone using their automated phone system.
I-Zone used to be Freetrade, which actually gave you 20 free trades each month. But I guess that wasn’t profitable enough (go figure).
December 27th, 2005 at 1:40 pm
MBtrading is pretty good, I opened an account in February. Trades filled nicely (as is expected from a direct access broker catering towards active traders) and support was good. Software is also relatively easy to use, just stick to the basics.
December 27th, 2005 at 4:47 pm
Hmm… I applied today for an MBTrading account today, seems like they require you to say that you make at least $50,000 a year. I’ve never heard of them verifying this, but just an FYI.
December 30th, 2005 at 6:45 am
I haven’t checked into MB Trading, but you also might want to look into sharebuilder and buyandhold.com. They offer more cost effective options for IRA’s and Mutual Funds including ETF’s.
January 4th, 2006 at 2:00 pm
Anybody hear about Ameritrade acquireing TD Waterhouse? Apparently any investor who buys the stock and holds it when the deal closes gets a $6 per share special dividend, according to MercuryNews
April 11th, 2006 at 10:49 am
MB Trading has a $50,000 income qualification, so for a joint account $100,000. $50,000 each, husband and wife. They don’t mention this on their website. After filling out their online application and giving all your personal information, THEN they bring up require income amount. So, if you don’t qualify, they have all your personal info and you have nothing. Not a good business practice.
August 5th, 2006 at 2:03 pm
Thanks for the Blog/site. Very interesting and potentially profitable information, even for a
novice investor/trader like me. Wish you well!
David
February 5th, 2007 at 2:14 pm
It’s not MBTrading’s fault they have the requirement. The regulatory people require them to do things this way……
February 7th, 2007 at 11:03 am
[…] By interest they are probably talking mainly about margin interest (which is currently at 10.5%), but I haven’t found any details on interest rates on cash. According to the forums you have the default cash option but can also sign up for a money market sweep account. Another concern that some people have is getting ‘bad fills’, basically not getting the best order routing and therefor the best share price, but it’s hard to find any place that objectively measures this. On a separate note, Penson is the same clearing firm that MB Trading uses. […]
September 10th, 2007 at 1:41 pm
If you are looking for occasional low cost trades, either MBT or IB are OK
- I’d select IB because they are well capitalized & offer extras, after hours trading, in-house clearing and are market makers (Timber Hill) which can aid in execution at best price.
As always, your experience a broker will vary & execution price should only be one factor. As an example, I had a Scottrade account and experienced a large loss when they failed to execute the limit order properly then held the stock in a frozen state for months. THIS DISASTER was met with a non-responsive customer service department .
I WOULD NEVER RECOMMEND SCOTTRADE TO ANYONE !!
September 19th, 2007 at 6:12 pm
After reading about MB Trading, I went to its website and submitted an online application. They sent an email back that they have approved for cash trade, but I was not able to do any thing. I called them, even though, they was very helpful on the phone, but nothing get done. They just tell me to wait for my new account in the system, I have been trying for couple of days, nothing is working yet.
Does anyone had this experience w/ MB Trading before?
thanks
January 23rd, 2008 at 1:03 pm
Very late reply, next year…
I had similar experience to Paul. Even after they notify you the account is ready - it took another 1 day until it really allowed me to view the zero ballance and setup ACH transfer on their website.
Their system seems very powerful although not exactly novice-friendly. But it works if you give their systems time to all get your new account in sync.
I did a BofA ACH pull and I think it was done in less than 2 days.
January 23rd, 2008 at 1:04 pm
Oh, one more comment - they consider you a day trader if you trade more than x times in a few days. And then they require a $25,000 balance.
With their crazy low fees, seems reasonable to me.
February 22nd, 2008 at 6:00 pm
Don’t choose TD Ameritrade. It’s ok for regular trading, but if you use it for anything else, it can become a nightmare. For example, it has been taking me days and many phone calls to just get some fund wired to a third party (they require signature confirmation, which makes sense, but it takes them days to dig out the record of my signature. Their local branches are useless for this. Even if you sign the wire form in front of a clerk there, they still have to fax it to somewhere and that will require independent signature confirmation). Another nightmare I had with them is trying to transfer the ownership of my account into my living trust, which is impossible through TD Ameritrade. You have to close the old and transfer everything into a new account (you may not want to do that, because they don’t have a way to transfer some essential information such as costs basis to the new account). So, stay away from TD Ameritrade.