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TradeKing Review – The Leading Online Discount Stock Broker

By Mark Riddix

There was a time when investors and traders could only buy securities through full-service brokerage houses. This changed during the nineties when we saw the rise of discount brokerage firms.

Discount brokerages are companies that charge lower fees than traditional brokers while typically offering fewer services. These brokers make it easier for the average person to have the opportunity to invest. We will take an in-depth look at a popular discount broker called TradeKing.

So, what is TradeKing? TradeKing is an online discount brokerage firm started in 2005 that allows investors to buy and sell securities for a minimal fee.

Investors can buy stocks, bonds, and mutual funds on the TradeKing website. Discount brokers are perfect for self-directed investors that would like to manage their own portfolios.

How TradeKing Works

  1. Open an account at TradeKing.
  2. Answer all questions on the application.
  3. Fund your account via ACH, check, account transfer or wire transfer.
  4. Build your account portfolio

Advantages of TradeKing

Low Fees
TradeKing offers a flat $4.95 pricing structure for stocks, options, and exchange traded funds. Their fees are extremely cheap when compared to other discount brokers. E*Trade charges $12.99 to buy and sell stock. TD Ameritrade charges $10.99 for stock transactions. Charles Schwab’s commission is $8.95 per trade. Even Scottrade, which trumpets itself as the cheapest broker, costs $7.00 per trade. Sharebuilder charges just $4 for buy orders, but they charge $15.95 for sell orders. TradeKing charges just $4.95 for broker assisted trades as well. Broker assisted trades at other discount brokers can range from $20 to $100.

No Account Minimums
Exorbitant account minimum requirements can make it difficult for investors to open accounts at discount brokerage firms. TradeKing customers have the advantage of being able to open their accounts with no minimum funding requirement. Many discount brokers require you to open an account with amounts ranging from $1,000 to $25,000. While Zecco and Interactive Brokers have lower fees, they require $2,500 and $10,000 to open an account. By not having an account minimum, TradeKing makes it possible for the small investor to benefit from their low commission charges.

Customer Service
Customer service is TradeKing’s bread and butter, and they offer some of the best customer service in the discount brokerage industry. TradeKing was voted #1 in customer service in 2008 by both Smart Money and Kiplinger’s magazine. TradeKing has a live chat feature which lets you speak with a customer service rep from 8am to 6pm Monday through Friday. The email address is readily identifiable unlike many other brokers that hide their email addresses to make it as difficult as possible to contact them. TradeKing’s email and phone response times are fantastic. Phone calls and emails are responded to within a matter of minutes.

Networking Features
TradeKing has a great online traders network which allows you to interact with other traders. Very few broker sites give you the ability to exchange ideas with other traders. You can view a trader’s portfolio, discuss ideas, and find out the reasoning behind specific investments.

Disadvantages of TradeKing

Research Tools
TradeKing is lacking in the research tools that some of the larger sites have. Fidelity, Scottrade, TD Ameritrade and E*Trade have more comprehensive analyst reports from different investment houses. TradeKing doesn’t have portfolio planning tools that are useful in helping to build your portfolio.

Fees on Mutual Funds and Penny Stock
The fees on TradeKing’s mutual fund products are not as low as their other products. It costs $14.95 to purchase a mutual fund. This fee can be beaten by purchasing directly from the fund family. Penny stocks cost .01 per share to purchase. This can become rather costly if you are buying thousands of shares. Other sites charge a flat fee for penny stock purchases.

Final Thoughts

So, is TradeKing right for you? It all depends on what you are looking for from your broker. TradeKing seems like a real bargain based on the low fees and high level of customer service provided. As you know, fees can eat up the value of your investment portfolio and TradeKing will help you keep more of your money with their low-fee pricing. If you are looking for a low-cost, high-service broker, TradeKing is worth giving a try.

Open an account with TradeKing. (Official Site)

Mark Riddix
Mark Riddix is the founder and president of an independent investment advisory firm that provides personalized investing and asset management consulting. Mark has written financial columns for Baltimore and Washington, D.C. area newspapers and is the author of the book, Your Financial Playbook.

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Comments

  • http://madsaver.com Mac

    This sounds great. Next time I’m in the market for regular stocks, I’ll definitely check out TradeKing. Normally I’ve used Sharebuilder, but didn’t even realize the sell fee was so high.

    Actually, I just went ahead and checked Sharebuilders fees, and the buy & sell fees (real-time) are $9.95 now. Automatic investments are still at $4.
    This may have changed after ING Direct bought them.

    • Mark Riddix

      Thanks for the update. They must have dropped the fees recently.

  • http://www.coolpennystocks.com/ Allen Mass

    Good updating news. I read & appreciate it.

  • Matthew

    hi read your reviews on the online discount broker sites, i do use tradeking myself and yes everything your mentioned like that they are lacking in research tools is true because i have experienced that myself and would like to see them make that available and there site could be a little more user friendly because i am new to online brokerage investing and i get the buying stocks in tradeking but havent really figured out the ETFs or Mutual Funds in tradeking cause basically those areas are like “put in what you want and buy” but anyways the online chat is good i have used them to ask some questions and didnt wait more than like a minute to talk to someone

  • http://www.nwtaxpreparation.com/ NW

    This sounds like a good place to look into. I was thinking of just using etrade because you see them everywhere but ill deff. be taking a look at these guys now. I like that the customer service is so responsive as well.

  • David

    Has anyone heard of newsStrikes? find it useful and how do you get it

  • Zoltan

    STAY AWAY FROM TRADEKING!

    I’m a Tradeking customer for a few years now, but in this year I decided to move my account elsewhere. They have issued an incorrect 1099 form 3 times this year, out of which one was 2 days prior to the tax deadline and another 1 week after!!!
    This caused me redoing my taxes 3 times this year and filing a correction due to their last correction being 1 after the deadline to file taxes.

  • Billpotter

    I was a Tradeking member for 1.5 years until February of 2012. I joined TK after seven years with Scottrade and it was a huge mistake. I was actively trading and wanted the discounted rate. What I got was a company that went down for a big chunk of the day four times in the 1.5 years I was with them. There were many other issues with their website over that time.

    What put the nail in the coffin for me with this company is they will not transfer the cost basis to IB even after I’ve contacted them twice to do so. Every time I contact them they say they will do it within a couple of weeks. It’s been over four months, clearly they are not going to do it.

  • Anna Montgomery

    I am 78 years old and want to learn about penny stocks. I have never known anything about this but would like to learn. How do I start? How much money do I have to have to start? Please write me at [email protected]

    Would love to hear from you.

    Anna Montgomery

  • dkgambler

    It’s funny to read about TradeKing’s award winning customer service. As I type this I still haven’t been provided an accurate 1099 for tax year 2011. I have four 1099s that TradeKing threw against the wall to see if it would stick before they finally gave up and said they needed to keep working on it. The last one I got was in April 2012. Now it’s almost September and I have to file my return by October 15. Zero communication from TradeKing as to when I could expect them to get it done, or what I should do if they can’t hack it. Of course none of it is TradeKing’s fault, it’s the clearing firm that they hired. Oh and it’s not just TradeKing, it’s happened to everybody! No, it hasn’t. Ameritrade and Scottrade both got the job done on time for me. I finally had enough and moved my account.

  • Johnson2016

    I thought I was the only one having the issue with the 1099. It is December 2012 and I am still missing a 2011 1099 form.

  • Johnson2016

    I thought I was the only one having the issue with the 1099. It is December 2012 and I am still missing a 2011 1099 form.

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