TradeKing Online Broker Review

by Mike Holman

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TradeKing

Customer-driven TradeKing is an award-winning online discount broker that charges a flat commission for any kind of equity order – be it market, limit or broker assisted. TradeKing only charges $4.95 per trade; Zecco is slightly lower at $4.50 per trade but has pricing tiers for different types of trade including $19.95 for broker-assisted orders.

Trade King charges only $0.65 for an option contract. There is no minimum to open or maintain an account, but margin accounts require $2,000 for equities and $25,000 for writing naked puts and $100,000 for writing naked calls. A naked option trade is executed by someone who does not have a position – long or short – in the underlying stock and is exposed to considerable risk.
Award-winning Customer Service

TradeKing is pretty nifty and has garnered awards from industry standard like Barrons and Smart Money in 2008 and 2009 for outstanding customer service – you are assured of speaking to a live person in minutes without having to punch a lot of buttons, expect an email reply within 2 hours on a trading day. Better yet, you can even have a live chat to get immediate feedback if you are still confused about an issue.

While every brokerage is obliged to get its customer the best price available, that does not always happen especially with a volatile stock. TradeKing promises best execution – such as speed of transaction and execution price, failing which, your trade is free. There are some exemptions to this, such as advanced orders and stop orders and it is best to be aware of what these are.

Impressive Suite of Free Tools

Another of TradeKing’s appeal lies in its easy user interface arsenal of free trading tools for stocks, options, EFTS and mutual funds. For stocks and options, it has scanners that will trawl through the market for those names that fit your criteria. You can save the criteria and not have to input them each and every time. There are useful interactive tools with views that you customize, such as easily zooming from short to long-term horizons, drawing trend lines or comparing performances against the stock indices.

It has intuitive tools for options trading. In the options scanner, there are 25 criteria to define the options you are looking for. There is a companion options strategy tool that will devise options strategies from basic puts and calls to straddles, strangles and collars. You can place an order without having to change screens.

Uses the profit and loss calculator to figure out the potential for making or losing money from possible or existing positions, and a probability calculator to work out how likely it is your stock or option will reach touch your desired price. Additionally, there is a very powerful tax manager which processes all transactions and corporate actions, works out, before you trade, short and long term gains or losses, and churns out tax reports on demand.

Special Offers and Education

TradeKing provides a whole range of educational materials in a variety of media such as videos mp3s, text and podcasts so that you can down load a seminar and listen to it on your iPod. Materials go from basic to sophisticated trading strategies. It is leveraging social media and has a trader’s community where you can follow the top trader, ask questions or chat with like-minded investors.

Currently, TradeKing is running some very attractive promotions. It will: -

  • Reimburse up to $150 in account transfer fees
  • Pay you $50 for every referral that opens an account with $1,000 and executes you a trade. The $50 bonus shows up in your non-Ira account.

Although there are slightly cheaper discount brokers around, TradeKing has a very impressive all round service. Operating since 2005, TradeKing has earned well-deserved kudos from both users and reviewers.

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Welcome to Money Smarts! If you're new here, please read the "About" page to find out more about this site. If you would like to receive updates by email then sign up here or you can subscribe to the RSS feed. Thanks for visiting!

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