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.

Comments

  1. 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.

  2. I’m also thinking about opening an account with MB Trading.

  3. Johnathan,

    I am looking forward to the results of your ETF research and journey into stock investing. Happy researching !

  4. 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).

  5. 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.

  6. 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.

  7. 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.

  8. Anonymous says:

    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

  9. 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.

  10. David Ruhland says:

    Thanks for the Blog/site. Very interesting and potentially profitable information, even for a
    novice investor/trader like me. Wish you well!

    David

  11. It’s not MBTrading’s fault they have the requirement. The regulatory people require them to do things this way……

  12. 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 !!

  13. 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

  14. RoundSparrow says:

    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.

  15. RoundSparrow says:

    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.

  16. 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.

  17. You should update this. MBTrading is .01c per share for 100-500 shares. 100 sh is the minimum you buy to get that rate ($1), anything lower is $4.95

    Any shares bought over and above the 500 shares will be charged .005c a share. MBT is good if you buy in whole lots. But small players like me don’t usually buy that many shares.

    Marsco is still the cheapest out there but if you want free…then Zecco it is (10 free trades per month w/ minimum balance of $2500, otherwise it’s $4.50)

  18. Hi guys!
    I’ve got only one question.
    I have just decided to open an MBtrading account, but joeblow69 said odd lot orders under 100 shares are $4.95. Is this true?

  19. Mike Milken says:

    Hi

    Are there any traders still alive out there who still think MB Trading is the way to go?

    MB Trading looks good to me; their “MBTX trade routing” gives the impression that it will offer good execution at tighter spreads than might typically be available to those trading retail. Any views?

    Thanks

  20. Gary Martinez says:

    Huge MB Trading fan here Mike.

    I’ve been a client of theirs since 2003. I have my equities account there and opted for the $4.95 plan as I usually trade 1000-3000 shares at time and most recently I’ve decided to start exploring Forex with them as well.

    During my time with MB they have had their problems, but they always made right with me and I wouldn’t look anywhere else to trade.

    BTW – they just got an extremely high ranking in the Barron’s latest Broker reviews, #1 in technology and #2 overall. GREAT JOB MB TRADING!

  21. I have just decided to open an MBtrading account, but joeblow69 said odd lot orders under 100 shares are $4.95. Is this true.

    I did a BofA ACH pull and I think it was done in less than 2 days.

  22. I’ve been a customer of MBTrading for several years now and have been very happy.. Blows the Ameritrades and E-Trades of the world away. Fantastic customer service, trade technology and their university has been very helpfull. A++ 10/10

  23. MB Trading is the best broker out there. Very nice education department and their ECN MT4 works great.

  24. I have been a client of MB Trading since 2009 and in that time, MBT has become my #1 Broker. Best spreads, fast fills and MBT’s technology is excellent.

Trackbacks

  1. [...] 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. [...]

  2. [...] even include any trades you would have to do to rebalance your portfolio. Of course, at MB Trading those 60 trades would cost only $60 a year unless you were buying more than 100 shares at a [...]

  3. [...] I wouldn’t say they are the hands-down cheapest. MB Trading which still offers trades starting at only $1 (100 shares or less). Depending on your trading [...]

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