Schwab Review

6.) Charles Schwab

Tools: B

The tools offered by Charles Schwab are ok, but they are nothing to get excited about. Specifically, their charting software is where they go wrong. The charts have poor graphics and resolution, making them hard to read and understand. It is very difficult to recognize a trend on a Schwab chart. The charts still cover the standards such as volume bars, moving averages, and other indicators.

The stock screener presented on the Charles Schwab platform is best amongst its peers. It is easy to use, effective, and informative. You can screen based on a wide variety of fundamental and technical indicators with this tool. What makes the Charles Schwab screener unique is its ability to screen specifically for foreign stocks with the exclusion of domestic rivals. This is useful when attempting to research emerging markets.
Charles Schwab has standard level two within their platform; however, they don’t offer any other special features. Schwab was the first online discount broker in the industry and has maintained its simple platform with simple tools for the novice trader.

Commissions: D

Commissions for this discount brokerage are definitely above average. For an individual who doesn’t make more than 120 trades per year, Schwab charges $12.95 per stock trade. If you are the type of investor who trades frequently enough to meet the 120 requirement, then you only pay $8.95. Options trades are $8.95 plus $0.75 per contract. This online broker is specifically known for its superior broker assisted trades; however I have never used the service. A broker assisted trade will set you back $25.
There are no idle account fees with Schwab which is a plus; however, there is a $50 dollar fee for a full transfer to another broker. A partial transfer costs $25.

Customer Service: D

Schwab is probably the most popular online broker for stock trading, but its customer service is horrendous. When I tried to merge my two separate accounts with them they really screwed things up. In fact, they accidentally mislabeled one of them as belonging to my sister, who also trades with Schwab. When they realized the error, they froze the account entirely and would not allow me to sell my recently acquired position. The stock fell fast and I lost thousands. Finally, they tried to console me with 5 free trades at $12.25 value per trade.

Trade speed and reliability: A

Trade speed and execution is excellent with this discount brokerage. I have never had a problem with or a delay on any of my stock and options orders. The website has been consistantly fast and reliable ever since I opened my account 6 years ago.

Registration: B

Opening a brokerage account online takes about 15 minutes. You must provide your contact information, select the account features you want, and decide how you’ll fund your new account. Finally Schwab will ask you to verify the information and create a login name/password if you’re a new client. Funding your account electronically is suggested with Schwab, since their customer service is poor. When I first funded my account via check, the money didn’t appear in my account for 10 days. Fortunately, this discount broker is not opposed to an instantaneous wire transfer.

1.) TD Ameritrade Review

Tools: A

Ameritrade offers some of the best tools of any discount stock broker. Most notably, their charts provide great detail. They can be tailored to fit many forms including candlestick pattern. Valuable indicators such as Bollinger bands and moving averages can easily be drawn on the charts. For the technical trader, this is a must. Ameritrade Apex clients also receive level two quote-scope which is a program that allows the trader to see all orders placed in real time. To qualify for Apex service you must make either 100 trades per month or have an overall account balance of 100,000 dollars or more.
The stock screener within the TD Ameritrade platform is also very useful. It goes into more detail than many of the competing broker’s screeners do with regards to its screening categories. A quality stock screener helps to alert you to the latest stock trading opportunities.
Ameritrade’s market coverage section of their website is excellent compared to other brokers, and it can certainly help you decide what criteria to screen for. By analyzing each market sector individually and then providing options for a personalized comparative analysis, Ameritrade’s sector analysis tool makes it easy to decide what the next hot sector will be. The next step is to do a stock screen, technical and fundamental analysis, and you are ready to trade.

Commissions: C

After reviewing many discount stock brokers I have determined that Ameritrade is moderately priced. They charge a flat 9.99 dollars per trade and 75cent/option contract. They have a 1.25% margin interest rate and do not charge idle account fees. They also do not charge account transfer fees which can be extremely annoying.

Customer Service: A

The customer service side of Ameritrade is high-quality and I have never had any problems. They are available 24 hours a day by phone for troubleshooting. Customer service representatives are ready to answer any questions, but you can also research a topic on your own. They have a detailed help section that explains how to use their software and trading platform. Funding an account is also easy. With my individual account I funded by check and it only took two days before the money was ready to trade. Electronic funding is also available. Electronic funding enables you to electronically deposit cash into your TD AMERITRADE account directly from your checking or savings account via an Automated Clearing House transaction. This feature is useful for individuals trying to make a time sensitive trade.

Trade speed and reliability: A

Trade speed is one of the most important aspects to keep in mind when choosing a broker. A broker that cannot execute a trade on time will inevitably cost you dollars. Ameritrade has consistently had good trade speed and execution during the eight years I have had an account with them. In addition, they sometimes are able to get me a better-than-expected price on my stocks sales. This is always appreciated.

Registration: A

There happens to be a minimum amount of 2000 dollars necessary to open an account with TD Ameritrade. Once you establish that you have the required funds, you will need to make decisions such as whether or not to use margin. You also need to specify your desired options level clearance if you wish to trade options at all. Ameritrade will approve or disapprove your margin and options requests based on your income and net worth. Once you fill out all the standard registration information on the website you will receive a welcome e-mail. After you confirm your registration, you will be sent three forms to fill out and return to Ameritrade. You are now ready to fund the account.

Special Features:

***The New Ameritrade Pattern Matcher: A tool designed to scan the market looking for well-known chart patterns such as the head and shoulders, cup and handle, and the double bottom.

E*Trade Review

7.) E-Trade

Tools: A

E*Trade gives you a lot of control over your home interface with customizable options such as market watch, watchlists, and news. Like most online brokers nowadays, they offer hidden stops, bracketed trades, and trailing stops.

In particular, E*Trade provides a fair amount of investment articles designed to help you learn more about the markets. They also put an emphasis on their retirement planning and tax center.
Recently they added a Blackberry Application that allows the user to view real-times quotes and trade via mobile phone. The new technology is called Mobile Pro.

As far as charts go, E*Trade is one of the best. Their charts are clear and come in many sizes. You even have the capability of saving your chart settings to be implemented on a later date, a feature that proves to be a major time saver in the long run. Of course, charts come in varying time ranges and can also display indicators such as a volume bar.

E*Trade also implements a quality stock screener into their platform. You instantly sort through thousands of stocks, mutual funds, and ETFs according to criteria on their database. They have custom screens, and pre-set screens depending on what you are looking for.

Commissions: F

If you make more than 1500 trades/quarter you pay just $6.99 per trade. If you only make between 150 and 1499 trades/quarter your cost is $7.99 per trade. If your account balance is over $50,000 or you make 30–149 trades/quarter, you pay $9.99 per trade. All accounts with less than $50,000 and if you make 0–29 trades/quarter, you’ll have to pay $12.99 per trade.

In conclusion, the average long term investor will be hit hard by E*Trades commissions. Of all the discount brokers I have reviewed, none charge more for a stock trade than E*Trade.
Some don’t find out until it is to late, but a quarterly $40 maintenance fee is charged on all accounts with less than $10,000. Below is a summary of stock and options fees.

Stock Commissions

Qualifications Cost per trade
Less than $50,000 in assets and 0-29 trades/quarter $12.99
$50,000+ in assets or 30-149 trades/quarter $9.99
150-1499 trades/quarter $7.99
1500+ trades/quarter $6.99

Options Commissions

Qualifications Cost per Trade plus cost per contract
Less than $50,000 in assets and 0-29 trades/quarter $12.99 plus $0.75
$50,000+ in assets or 30-149 trades/quarter $9.99 plus $0.75
150-1499 trades/quarter $7.99 plus $0.75
1500+ trades/quarter $6.99 plus $0.75

Customer Service: B

E*Trade is open for questions by telephone 24 hours a day and can also be contacted by phone or email. If you need to contact them in person, 20 offices around the nation are available for consultation.
Unfortunately, E*Trade has received many customer complaints about service all over the web.

I have compiled a list of the most frequent complaints they receive.

-locked accounts
-wire transfer difficulties
-confusion regarding their joint account programs

***Many many individuals with inactive accounts have reported that E*Trade will sell their stock without notifying them in order to pay the $40 maintenance fee.

Trade speed and reliability: A

It is reported that buying and selling on E*Trade is a breeze. Their platform is effective at trade executions and timing is reported down to the second. The trade-ticket offered by E*Trade for submitted an order is auto-populated for convenience. Most importantly, E*Trade is known for executing trades promptly and at the best price possible. Few customers talk about E*Trade in a negative fashion in this manner. The speed of the website is also good.

Registration: A

It is very easy to register with E-trade and they have a reliable platform. Once an account is opened and money is transferred either electronically or by checking account, the investor is able to log in and navigate the site. The initial deposit required for this online discount broker is $1000. You must specify your investment objectives, account options, and file proper documentation in order to start your account. All the statements and confirmations are done electronically with this brokerage.

Scottrade Review

Tools: B+

Scottrade offers three separate trading platforms for their clients including, Scottrade, Scottrader, and Scottrade Elite. Scottrade Elite is the most extensive platform designed for the most sophisticated trader. It includes news columns from both Comtex and Dow Jones, advanced charts, level two quotes, and stock screeners. Scottrader is lacking level-two software, but it does come complete with the same streaming stock quotes and news provided on Elite. For the most basic trader, Scottrade Standard will provide basic quotes and research tools.

This online brokerage also displays a multitude of investment calculators on their site and holds online trading seminars for their clients. These educational experiences are free to Scottrade customers and can be a great help on understanding complex markets.

Scottrade makes available impressive charts to its clients. They are nearly as good as some of the more expensive brokers such as E*Trade and TD Ameritrade. Like E*Trade and TD Ameritrade, Scottrade allows the trader to save chart settings, and they offer fundamental and technical indicators to be incorporated within charts. However, Scottrade does not supply the PE history indicator within their charts.

This online brokerage also provides standard research tools, but they are not extraordinary. Their stock screener online allows for the screening of thirty-two different categories. For example, it will not allow you to screen for a specific market cap. Scottrade reviews the market on their stock market update page thoroughly, and it updates it as news rolls in throughout the day. They have links to Reuter, MarketEdge, and Standards & Poor’s available to clients.

Commissions: A

The commissions schedule presented by this discount broker is all about discounts. They charge only $7 for an online trade over $1. Scottrade also tends to be very straightforward with their fees without resorting to hidden charges. At a straightforward price of only $7, day traders can save a lot of money in with this brokerage in the long run. Finally, it only takes $500 to open an online account, an offer appealing to many inexperienced traders. Scottrade’s margin rate is 0.25 if your balance is below ten-thousand dollars.

Below is a detailed commissions schedule for this online discount broker:

Stock Commissions

Order Method Cost per Trade
Internet $7.00
Touchtone (IVR) Phone System $17.00
Broker Assisted $27.00

Options Commissions

Order Method Cost per Trade plus cost per contract
Internet $7.00 plus $1.25 / contract
Touchtone (IVR) Phone System $17.00 plus $1.25 / contract
Broker Assisted $27.00 plus $1.25 / contract
Option Exercises and Assignments $17.00

Customer Service: A

You can contact Scottrade by telephone or email. They also have over 400 branch offices throughout the United States open for consultation and assistance. Unfortunately, Scottrade is one of the few large discount brokerages that do not offer 24-hour customer service. They also prefer to talk on the telephone when there is a problem rather than by email, a quality in our opinion. This stock brokerage is dedicated to providing customers with outstanding service, both from its many branch offices and its headquarters in St. Louis. Scottrade claims to diligently train its customer service representatives on all levels of the business.

Trade speed and reliability: A

If you are looking to make standard stock and options trades, then Scottrade has excellent execution. They tend to get the best price possible and they don’t waste time. Their site is typically quick and reliable. We have not had any negative experiences or failed trade executions with this discount broker during our eight years of business with them.

Registration: A

There was a time in which Scottrade did not accept electronic funding or wire transfers, but recently they have updated their system. It is no longer difficult to fund an account with this online brokerage.
In general this discount broker has an easy to follow registration procedure. Scottrade reviews you account information filled out online and sends you an account opening email. Their new electronic funding capability, called Money Direct, will allow your account to be instantly funded the moment you finish reading your email.

Scottrade Brokerage Special Features:

***Scottrade has recently updated their platform to include a tool called Smart Text. Smart Text will accompany a chart such as this chart of GOOG and it will explain briefly what that chart means to investors. It provides insight useful in trading decisions.

Brokerage firm rankings for the top firms

One of the most difficult decisions for investors is which trading platform to use. A poor quality system can cost the trader thousands of dollars, while a good one can help them spot the latest trends. Throughout my years of trading I have tried many brokers, finally settling on a top three. Currently, I have accounts with TD Ameritrade, Tradeking, and Scottrade. In order to help you make the decision of which broker is right for you, I have established five categories by which to rank the most popular companies. These include, tools, commission, customer service, trading speed/reliability, and registration.

Disclaimer:
This site is published solely for informational purposes and education and should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. References made to/from third parties are based on information obtained from sources believed to be reliable, but are not guaranteed as being accurate. Visitors should not regard it as a substitute for the exercise of their own judgment and/or the advice of a licensed professional before making any investment decisions.

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