Launched towards the end of 2005, TradeKing is a relatively young discount brokerage when compared to many of their competitors. TradeKing, more than any other brokerage, is more in tune with today’s social networking and social media trend. This online trading network is somewhat of a forum just for investors, where they can connect with one another, share experiences, strategies and ideas.

Online brokerages have become more sophisticated recently, offering not only competitive pricing but innovative tools and technology. Here is was TradeKing has to offer its customers.

TradeKing pricing and fees

The commission to trade stocks and ETFs is $4.95 every day, whether you use a broker for assistance or do it yourself online. Up to 8 contracts, options also cost $4.95, but have an additional cost of $0.65 per contract. If you trade more than 8 options contracts, the commission is the $8.95 base plus an additional $0.15 per contract.

The brokerage also offers no-load mutual funds for a commission of $14.95, bonds for $4.95 with a minimum of $14.95 per transactions, and treasuries and CDs for $24.95 per transaction.

While some brokers offer trades for less than $4.95, most brokers charge $10 or more per trade. In terms of overall price, TradeKing usually beats other brokers. They offer more features than some of the less-expensive brokers, though, so as you get to know what TradeKing has to offer beyond other discount brokerages, keep that in mind.

Funding your TradeKing account

The easiest of the several ways to fund a new TradeKing account is through wire transfer. Wire transfers could take anywhere from a few hours to one business day, depending on your bank. Most lileky a more popular choice is the ACH transfer. This takes one or two business days, but your bank will most likely offer this option for free.

You can also send TradeKing a check to their P.O. Box or directly to their customer service office address included below. For any customer who wants to transfer funds or securities of any kind directly from another broker or mutual fund company without selling and buying, TradeKing will accept direct transfer of your investments. This process can take five to seven business days.

If your bank or brokerage charges you any fees to transfer your cash or funds to TradeKing, including wire transfer fees, account termination fees, or any other cost to move your money, they will reimburse you up to $150.

TradeKing technology and trading platform

Among the tools you may now expect from an online broker, TradeKing offers an options pricing calculator, a probability calculator, a profit and loss calculator, options and strategy scanners and screeners for stocks, ETFs and mutual funds. TradeKing also has a variety of research tools like market and company overviews, a watch list, live quotes, interactive charts and options chains. TradeKing is an innovator in the online trading tools arena, and they constantly improve these tools to meet the demands of active traders.

TradeKing offers an iPhone app for any customer who happens to have an iPhone or iPad. The app provides access to accounts, stock quotes, and many of the same online features in an interface that suits the mobile interface.

Industry awards

• Rated #1 in customer service by SmartMoney in 2010
• Received the maximum five-star rating for its customer service and trading tools by SmartMoney in 2009
• Recognized as the “Best for Option Trading” and earning 4 out of 5 stars by Barron’s 2009-2011
• Named the leader in Web Site Speed and Availability in the Gomez “Best of the Web 2009″ Report

TradeKing promotions

To entice new customers, TradeKing often provides bonuses and incentives. Here is what is available today.

1. Get $50 for referring a friend. TradeKing will deposit $50 in your account and $50 in your friend’s account when you refer him or her to TradeKing. Your friend must open a new account funded with at least $1,000 for both of you to qualify for the referral fee.
2. Switch to TradeKing and they will refund your transfer fees. Open a TradeKing account, complete and print an account transfer form, mail or fax the signed form along with a copy of your most recent broker statement to TradeKing, and request your reimbursement by faxing your transfer form, as well as proof of your transfer charge to -866-699-0563. Fees up to $150 will be refunded.

Customer service

To differentiate the company from its competition, TradeKing focuses on customer service. If you’ve had experience with TradeKing’s customer service, share your thoughts, either positive or negative, in the comments below. TradeKing offers several communication lines for customers.

1. By phone at 877-495-5464 during their office hours, 8:00 am to 6:00 pm Easter Time, Monday through Friday
2. By fax at 866-699-0563
3. By email at service@tradeking.com. TradeKing guarantees your emails will be answered within two hours during regular business hours and within 24 hours on the weekends.
4. You can also send them checks, forms or letters to: PO Box 49050, Charlotte, NC 28277-3432, or overnight deliveries to: 13024 Ballantyne Corporate Place, Suite 500, Charlotte, NC 28277.
5. You can speak directly to a representative using their online Live Chat via the TradeKing website during their business hours noted above.

With TradeKing’s focus on customer service and technology, any investor should consider using them for their daily trading needs. There are better options out there for those interested in cheaper trades but for a few dollars more per trade, these guys go above and beyond in terms of research, tools and service. Customers should decide whether these features are worth the slightly higher transaction costs. For some traders, they will be.

To visit TradeKing for more information or open up an account, head over to tradeking.com.

{ 8 comments }

Discount brokers are everywhere. Not long ago, only a few companies offered the ability to trade stocks with low commissions. If you wanted to trade with a full-service brokerage, it might have cost $30 for each transaction. For this fee, you would talk with a broker assigned to your account, who would help you make trading decisions. Of course, the transaction fee and the promise of earning money encouraged these full-service brokers to suggest trading as much as possible.

Companies soon realized that they could offer a self-service model of stock investing, reducing overhead costs by eliminating the human broker, and passing that savings onto investors through reduced trading fees. In order to keep the volume of trades high, some discount brokers offer incentives to encourage more buying and selling.

SmartMoney recently looked into a number of discount brokers in detail in order to determine the best among a variety of categories:

For our 18th annual ranking of brokers — itself top-ranked by the Web site ConsumerSearch — we scrutinized a wide range of factors, from trading commissions and account fees to the cost of certain banking services and margin rates. In addition to parsing survey responses from the brokerages, we consulted with research firms and put brokers through our usual litany of customer-service tests.

Here is SmartMoney’s top ten discount brokers:

Others just missing the top ten include OptionsXpress, Zecco, and my current preferred discount broker, ShareBuilder. Who is your favorite discount broker?

See more details at SmartMoney.

{ 8 comments }

As a fan of index mutual funds for the long term, I’ve stuck with first TIAA-Cref and currently Vanguard for my IRAs. I started with TIAA-Cref because when I first discovered Roth IRAs, I didn’t have enough saved to qualify for Vanguard’s minimums. Both brokerages offer low-cost options for those who want to invest in index mutual funds for the long term.

If you are interested in more active investing, your IRA might be a better vehicle than a taxable brokerage account. In a non-retirement account, every time you sell after a stock’s price goes up, you could be subject to an income or capital gains tax. This payment to the government accompanies any transaction fees the broker might charge. Furthermore, if your investment pays dividends, you will owe more tax on that income.

All of these, except for the transaction fees, can be avoided by taking your trading to an IRA. These retirement accounts are tax-free until you retire, at which time only your withdrawals from taxable Traditional IRAs will generate a bill from the IRS. Tax laws could always change in the future, and I guarantee they will. Based on today’s tax laws, some investors could fare better by following this plan.

There is a downside: if you sell a stock in your IRA at a loss, you cannot use that loss to offset that year’s income in an effort to reduce that year’s tax liability. That feature is only available when trading in a taxable investment account.

Just about every discount brokerage offers IRAs allowing stock transactions. Here are a few suggestions.

Scottrade offers IRAs with no account maintenance fees or termination fees, and charges a commission of $7 per trade. A few years ago, I moved my taxable brokerage account to Scottrade from Wachovia when that bank began charging an annual fee, and although I haven’t had much activity, I haven’t encountered any problems with Scottrade.

Tradeking charges a low commission of $4.95 per trade and, like Scottrade, does not charge any maintenance fees. This is simply one of the least expensive options for trading stocks in a retirement account.

Zecco actually has TradeKing beat with $0 trades in some circumstances. With a $25,000 balance or 25 trades each month, you can qualify for free trades at Zecco; otherwise, each trade will cost $4.50, still slightly less than TradeKing. Unfortunately, Zecco charges an annual maintenance fee of $30.

What do you think about actively trading stocks in an IRA? Active trading is not the right approach to investing for most people. But if you’re going to make the decision to try your hand in the stock market, using an IRA could help you save money.

{ 4 comments }