Archives for April 2006

I recently opened a stock trading account at Scottrade. Here were my reasons:

• $7 limit trades. Not the best, but good enough for me.
• Local broker. It’s nice to have somewhere I can drive to in 10 minutes and be face-to-face with a human. Much easier to resolve things that way.
• No inactivity or maintenance fees.
• No transfer-out fee. If I am dissatisfied, I can just move all my holdings over to another broker with no charge.
• Free Gainskeeper. This service tracks your stock lots and helps you file your taxes at end of year. It usually costs extra at other brokers.
• Good reviews both offline and from online comments.
• Just $500 to open, but if you have $5,000 in account equity, you get free checkwriting, which you can then link up with other accounts.

The only thing that really made me think twice is that they pull a hard credit check when you apply. I decided it was worth it for the chance at finding a nice long-term broker.

Here is my opening process review, it was a bit of a whirlwind.

1. I applied online, and they asked me the usual ID verification questions. But there was no way to fund online. You had to fund via check, account transfer, or wire transfer. They also asked you to fill out an optional signature form so they have your signature on file in case you do any requests by mail.
2. I figured, hmm, maybe it’s time to try out my free outgoing wire transfer from WaMu Checking. But I wanted to make sure the funds would post right way, so I gave the local branch a call.
3. They said, yes, if it is received by the end of the market close, it should post the same day, but otherwise it would be the next day. But hey, did I live near the branch? If I dropped off a personal check by the afternoon, the funds would also be available the next day. Since this would also give me a chance to hand in the signature form, I said sure.
4. The branch was only 10 minutes away, but it was also in downtown, which meant parking was horrible. I called him up again and asked if they had a specific lot (blind hope), but they said that if I parked in the nearby City garage, they would validate me. Excellent!
5. I dropped off the check and the signature card without much issue. I also requested checkwriting while I was there. I also get a Check Card.

Overall, not bad at all. I figured out where the branch was, and I can visit anytime and not worry about parking. The branch was pretty sparse, like 6 desks and 2 people, but since there are 4 branches in my city I’m not too concerned. It was actually nice, as when I call I always speak to the same person, and I got to meet him at the branch.

The website is simple and logical, which is what I like to see. If you are logged in to the Scottrade site and click on the ‘Contact Us’ link, you always get your local branch’s telephone number instead of some overseas call center.

After some more research, I jotted down some thoughts on each of the six brokers I narrowed it down to last time. Again, these are all from my own admittedly-biased perspective and personal needs.

TradeKing
I have an account with TradeKing, and they seem ok. Online chat help is alright. The site runs slow as if it is on a 56k modem, but my trade executed promptly. $4.95 trades with no inactivity fees is nice. The founders of TradeKing also founded SureTrade, which themselves merged and are now part of Bank of America. Thus, they seem to be a likely future merger target, which I am trying to avoid.
[Read more…]

Is it weird that I’m excited to switch into my new portfolio? I just have to settle on a brokerage. Now, you are not going to find an exhaustive broker comparison here. I’m just one guy and I just want to find the best broker for me. I’m just selfish like that 😉

First, let’s start with all the discount brokers I can think of: TradeKing, ChoiceTrade, CyberTrader, Etrade, Interactive Brokers, MB Trading, OptionsExpress, Scottrade, ThinkOrSwim, Schwab, Fidelity, TD Ameritrade, Ameritrade I-Zone, Harrisdirect, Muriel Siebert, Firstrade, WallStreetE, Vanguard Brokerage, Bank of America.

Let’s start the pruning.

1) My account will have $10,000 in it to start.
2) I want no inactivity fees.
3) I want a maximum commission of $10 for trading 1000 shares, even if I only make 1 trade a quarter.
4) I also want to be able to speak with a broker if needed.
5) I only want to trade stocks with cash. I don’t care about options, margin rates, mutual funds, etc.

That leaves us with:

TradeKing, ChoiceTrade, MB Trading, Scottrade, ThinkOrSwim, Firstrade.

So, I’ll have to decide between these brokers. I already have accounts with Tradeking and MB Trading. Tradeking seems alright (I opened the account mainly for the bonus), although the reports that their website is slow are true. I didn’t like my first impressions of MB Trading, and have taken my money out, but my account is still open since they have no minimum balance. But I may just be tempted back by their low stock trade commissions with trades starting at $1. Now to read up on the rest of these guys. Here are some reviews I dug up so far:

Next: Part 2