TradeKing Review 2016

Brokers, Investing

TradeKingTradeKing may be a deep-discount broker, but its robust trading platform and lineup of free research, charting, data and analytical tools puts it in line with some of its more well-known — and higher-priced — active trading competition.



TradeKing

Arielle O’Shea
January 29, 2016
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Quick facts

  • Commissions: $4.95
  • Account minimum: $0
  • $1,000 in free trade commissions for new clients with a balance over $5,000
Get started on their secure site
Get started on their secure site

TradeKing is best for:

  • Active traders
  • Fee-conscious traders
  • Options traders
  • Free data analysis software
  • User-friendly tools

TradeKing at a glance

Overall

Stock trading costs$4.95
Options trades$4.95 + $0.65 per contract
Account minimum$0, but $50 annual inactivity fee on accounts with no executed trades in last 12 months and a combined value of less than $2,500
Account fees (annual, transfer, closing, inactivity)$50 annual inactivity fee for customers who don’t place at least one trade per year or maintain a balance of $2,500; $50 outgoing transfer or IRA closing fee
Trading platformBrowser-based platform with free screening tools, customizable charting, research and real-time data
Mobile appYes; mobile website also available
Mutual fundsNo transaction-fee-free mutual funds; $9.95 per trade
Commission-free ETFsNone
Research and dataFree
Tradable securities• Stocks
• Bonds
• Mutual funds
• ETFs
• Options
• Forex
Customer support/branchesPhone service and support 8 a.m. to 6 p.m. Eastern, Monday through Friday; live chat and email support
Promotion • $1,000 in free trade commissions for clients with a balance over $5,000
• Up to $150 in transfer fees reimbursed on accounts of $2,500 or more

Where TradeKing shines

Commissions: Only a few online brokers can beat TradeKing’s low stock and ETF trade commission of $4.95, and the fact that the company’s pricing is so clear-cut is an added bonus. Options contracts are similarly low, at $4.95 plus 65 cents per contract, and multi-leg options orders are priced the same as single leg, with only one base charge.

Account minimum: TradeKing makes it easy for investors to get started, with no account minimum. However, there’s no free lunch: Avoiding the $50 annual inactivity fee requires minimum activity (at least one commission-charged trade per year) and a $2,500 account balance.

Trading platform: TradeKing’s browser-based platform — called TradeKing LIVE — offers quick trading capabilities, real-time streaming quotes and data, a customizable dashboard, and access to all of the tools the broker offers. Customers who frequently trade from various computers — home and work, for example — will appreciate this Web-based platform, which doesn’t require any downloads. TradeKing LIVE has also advanced the ability for customers to trade via mobile devices with the company’s mobile apps, or use a smartphone to simply access the web-based platform. (See our in-depth review of TradeKing LIVE for more details.)

Research and tools: TradeKing offers a suite of tools that exceed expectations for a discount broker, including above-average charting capabilities, technical analysis powered by Recognia, and a range of calculators (e.g., an options pricing calculator to compare current bid/ask prices to forecast theoretical values; a calculator for a trade’s profit and loss potential; and a probability calculator that uses implied volatility to determine how likely it is you’ll hit your targets).

It also has an online trader network, a sort of social media for traders, where users can get insight from others, share strategies and exchange trading notes. Finally, real-time streaming quotes and customizable data is free to investors who trade at least 10 times per month.

Where TradeKing falls short

Commission-free ETFs: TradeKing has none, which isn’t terribly uncommon among discount brokers, but it makes the company a poor option for an investor who wants to dollar-cost average into exchange-traded funds (ETFs) each month, as the $4.95 charge for doing so will add up quickly.

Mutual funds: Again, the company doesn’t offer any transaction-fee-free mutual funds, which can be costly to account holders who want to invest a little bit at a time on a regular basis. On the plus side, mutual fund trades are priced at just $9.95, which is low when compared to close competitor OptionsHouse, which charges $20 per mutual fund trade. Mutual fund investors would still be better off at an online broker who offers a large selection of transaction-fee-free funds.

Inactivity fee: As we mentioned earlier, customers who don’t place at least one trade per year or maintain a balance of $2,500 will be charged a $50 inactivity fee. In the grand scheme of things, this is not a dealbreaker for most users; still, it’s worth pointing out because it’s an asterisk next to TradeKing’s $0 account minimum.

The bottom line

For active investors seeking low-cost trades (plus no hidden fees) and above-average trading tools, TradeKing provides the kind of service you’d expect from a much pricier, high-minimum platform. Options traders in particular will appreciate its strong selection of options and its inexpensive (and easy-to-calculate) flat-fee commission schedule. Cost-conscious active traders may be surprised at how much they can get for so little at TradeKing.

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter:@arioshea.

This article updated March 1, 2016. It originally published Feb. 1, 2016.

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