TradeKing Review
TradeKing’s $4.95 trade fees have attracted a lot of attention in the e-brokerage world, allowing them to steal customers away from competitors. Compare their pricing to $9.99+ at Etrade and Ameritrade, and it’s easy to see why.
Fees and Pricing
Say you make 100 trades per year. Switching to TradeKing would save you $500/year, assuming you pay $9.99 today. That’s $500 more to put to work in the markets every year, money that will compound and grow over time. Investors who trade more often will see even bigger savings, of course.
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Pricing Comparison:
As you can see, trading is much cheaper on TradeKing. Their $4.95 price includes broker-assisted trades. I’ve had to use this option before with Etrade, when my internet went down. It wasn’t cheap. If you get in a similar spot, it’s nice that TK doesn’t charge a ton.
Official TradeKing site here:
Options pricing: Trades are $4.95 plus $.65 per contract. Compare that to $9.99 and $.75 per contract with Etrade. Big difference, especially when you trade volume.
Savings like that can make a huge difference for options traders. TK also offers options price calculators and options screening tools, allowing you to search for options that are fundamentally cheap (or expensive) depending on whether you’re looking to buy or sell.
Mutual Funds: Transaction fees also beat rivals by around 25%. They’re $14.99 vs. $19.99. These small savings make a big difference over time, especially in retirement accounts where your portfolio has decades to grow.
TradeKing is the cheapest online broker I know of. I can’t see fees going much lower, as TK’smargins must already be thin when you factor in exchange fees and business overhead. I assume TradeKing must be relying on some more advanced offerings to pad margins.
Drawback – Not Ideal For OTC/Penny Stocks
One potential drawback is TradeKing’s $.01/share fee on shares priced less than $1. For dumpster-divers and OTC gurus, this is not ideal. Those fees can really add up over time, when you’re doing transactions with 100k or even 1m shares at a time.
Charts and Technical Analysis Review
TradeKing offers some nice technical analysis tools, which are powered by Recognia. You can set up email alerts to notify you when breakouts or other events are happening.
Charting is pretty standard. Pattern-recognition, tons of TA indicators you can add, comparisons, etc. Like research, most investors can find the charts they need for free these days.
Margin Rates
TradeKing’s margin rates are slightly cheaper than the competition, at 6.5%. That compares to ETrade’s 7.99% and TD Ameritrade’s 9.00%.
Research Reports
TK offers MarketGrader fundamental research reports to clients. These look solid, but don’t boast the same big-name appeal that firms Etrade pay for. But to be honest, I find very little value in reports from companies like Standard and Poors.
All these ratings agencies have fee-based relationships with the companies they cover, and that creates a bias problem. I was an Etrade customer for 8 years, and found most of those reports to be useless. Better information can be found for free on the web, in my experience. I’d rather not pay for pricey research that I never use.
Customer Service
TradeKing offers phone support with minimal wait times. They also offer online chat and email support. I made a call to test their claims, and got a real person on the line within a minute. Not bad, considering how cheap the trades are. They also received Smart Money’s #1 in Customer Service award in 2008.
Tax Reporting
Review Conclusion:
Controlling costs today is more important than ever. TradeKing is a good way for investors and traders alike to cut their brokerage fees in half. I’m currently in the process of moving my old Etrade account to them. I make about 120 buys a year, so this should save me $600 in the next 12 months alone. Not bad.
Here’s a link to signup:
Feel free to share your own review of TradeKing in the comment section. I’d like to hear all experiences, good and bad.
9 Comments
try Just2trade.com at 2.50 a trade, thats hard to beat.
2500 min to open an account.
Nice review. I love TradeKing. I joined about 4 years ago back in 2006, and I have had zero problems with them.
You really can’t beat $4.95 trades as you mentioned, plus their customer service is better than the big dogs like Fidelity in my opinion.
Don’t forget that it’s great for options traders and speculation. I can buy a few put options and trade some penny stocks without too much of an increase in cost.
The commenter mentioned Just2Trade, but I doubt they have limit trades…which is a must for me.
They have limit trades and free level 2 quotes. Plus they have quite a few order modifications such as market to close, gtc, routing options… etc etc etc.
I have not used tradeking but i have used zecco and scottrade and just2trade has them beat. I will be moving my accounts over to them soon.
I just signed up for Tradeking after finding out about there $4.95 flat fee. Biggest mistake of my life. They have the price to attract the customer, but customer service was terrible. I had wired funds and was successful at my bank end, but to find out about their unusual document limitations they had rejected the transfer because I had a joint account. They stated that I cannot use 3rd party to deposit funds. Clearly, I was the account holder showing my name and my partner’s name on the bank statement they had requested from me, but they insisted that I was the 3rd party. They had redefined the definition of 3rd party according to “their 3rd party policy”. They had wired back the money and deducted the fee from their side. Although it was a small amount of $25 that they had robbed from me, I had spent almost 6 hours going back and forth sending documents and conversation to find out I was robbed at the end. It was just a waste of time. I am definitely not going to recommend them for that matter!
I was a customer of TradeKing for close 2 years and I am now transferring my account due to their poor service and costly delays.
Should you want to use a ACH to deposit money expect to wait 1-2 weeks.
However what is worst if you want to transfer cash or assets from one account in Tradeking to another account you hold there it is a 2 day wait! Any other brokerage or bank I use the transfer is instant but like most things at tradeking their methods are anything but normal.
Also they pass all regulatory fees on top of the 5.00 commission. They do not pay interest on cash but are kind enough to charge you interest if you use your proceeds from a sale during that period.
Most importantly their trade execution is very poor; I almost always pay more than the price listed per share and sometimes even sale for less than the price issued. Their execution on your screen is fast, but in real time it is slow or ineffective.
TradeKing is a cheap brokerage but their poor service and management far outweighs any money you save.
Tradeking’s “customer service” is horrendous. I contacted the company on multiple occasions with questions about opening accounts and transferring funds over. Each time, the representatives either didn’t fully understand rollovers and transfers, or they gave me wrong answers that had to be corrected by a 2nd individual with follow up calls. All too disconcerting to trust an institution with my money and extremely frustrating and time-consuming to have to contact so many people for what should have been simple questions.
Another note: Throughout this process, I’ve had my questions and concerns bounced around to different people and somehow my original concerns weren’t transmitted accurately to the next person. A rep “answered” what she thought was my concern, but she clearly didn’t have the right information. Rather than deal with more nonsense, I asked to speak with a supervisor. She ignored my request. After repeated requests, the rep tells me she already sent my concerns over to a supervisor and corrects me by saying that I only requested a supervisor once.
The supervisor “answers” my concern, tells me that he’s reviewed the information that the previous rep gave me, finds that there is no problem and considers the issue resolved. How the heck can they answer my concerns correctly without actually asking me what my concerns are? I called to complain and to close my account.
The next supervisor tells me that it isn’t their fault that the rep received the wrong information. When asked if he considers it to be good customer service to never stop and ask the customer what the question or issue is, he says “I’m asking now!”
Maybe Tradeking used to have great customer service in the past. I certainly haven’t seen anything resembling good customer service. And I wouldn’t trust them to handle anyone’s hard-earned money.
Also, TradeKing will not provide you with any confirmation once you close your account.
To close your account, you must call in (not mentioned anywhere on the website). To confirm, you must call in a 2nd time (closing will take a few days). TradeKing will not provide you with a confirmation number or anything in writing.
So beware of their obvious libel.
Too many glitches. Do not open up your account with Tradeking.
I’ve lost over $5000 due to their slowness and glitches.
All they said was I understand, but you should’ve called earlier.
I’m withdrawing all of my money out of this account.
Never will trade again with this garbage.
WATCH OUT! YOU DO GET WHAT YOU PAY FOR.