TradeKing Review: An Online Brokerage Worth Considering

Trade King Review

Welcome back to another online brokerage review today here at Frugal Rules. Today I am going over my TradeKing review and why it could be a brokerage worth considering for your investing in the stock market

To be completely transparent, I do not have an account with TradeKing nor have I ever. That said, I’ve dealt with them extensively over the years with my experience in the online brokerage industry as well as dealing with their platform quite a bit. This has allowed me to learn quite a bit in terms of how they operate and what you’d want to look out for if you’re considering using TradeKing for your investing needs. If you’d like to check out my other online brokerage reviews, you can do so below:

A little background in TradeKing, they have been in business since 2005 and merged with Zecco in 2012 in order to broaden their brokerage offerings. They’re well known for their social media presence and low priced stock trades. Enough background though, so on to the TradeKing review.

TradeKing Features

Trading Platform: One of the first things I look at when I am considering a brokerage is their trading platform and if it’s user friendly. From what I have seen with the TradeKing platform, it is intuitive and easy to grasp for most. Added to that, they offer a $4.95 commission on stock trades and $.65 per contract on options (in addition to the stock commission) so it makes them very hard to beat.

Free Streaming Quotes: I’ve mentioned the nice feature of streaming quotes in previous reviews, and TradeKing does not disappoint here. After placing one trade, you simply contact them and they enable free streaming quotes on your account. This is nice to have if you’re watching the market and want a particular stock or etf at a certain price.

Forex Trading: Just as with Etrade and OptionsXpress, TradeKing offers Forex trading thanks to their merger with Zecco. What is even better is they offer a $50,000 virtual account to allow you to get your feet wet before trying it out on your own.

Advantages of TradeKing

Low Pricing: Obviously, one of the bigger draws of TradeKing is their lower commissions. If you like to invest in stocks then you’re hard pressed to beat their $4.95 per stock trade. They also have a solid mutual fund price of $9.95 per trade. You’ll notice though I did not mention flat pricing, which I’ll touch on later.

Healthy Mutual Fund Offering: If you like to invest in mutual funds, then you’ll likely be satisfied with TradeKing as they offer over 8,000 mutual funds from a wide variety of fund families. This places them as better than average in regards to the rest of the industry.

Great Customer Service: I’ve said it before, but I will pay more for good customer service. If I am going to trust someone with my money then it’s a no brainer for me. Every time I’ve dealt with TradeKing I’ve been satisfied with my experience. They’ve also been honored by Smart Money for several years for being at the top of the industry in terms of customer service.

Free Online Support: One of the things that sets TradeKing apart is their use of social media and forums on their site. They take to heart offering real-time support to their clients and have thought outside the box to do so. They also have the requisite free classes and webinars to offer help which is nice to see and they have it broken down by experience level which is incredibly helpful.

No Minimum to Open: As I mentioned in my OptionsXpress review, TradeKing does not have a minimum to open an account with them. Many brokerages do not offer this, which can hold some back. This allows clients to open with the amount they can and go from there. This is a huge bonus in my book if you’re dealing with having little to invest in the stock market.

Disadvantages of TradeKing

Lower Prices, But with a Catch: That $4.95 per stock trade price sounds great, doesn’t it? Well…it comes with a catch in that it’s not a flat price. If you’re looking to trade stocks below $2.00 or over 1,000 shares of one stock then they add $.01 per share. Their site says that you won’t be charged more than 5% of the total trade value in commission, which is nice to know but can be a detractor for some if you like to invest in penny stocks or trade large blocks of shares.

Fees: Generally speaking, TradeKing is very light when it comes to fees which is awesome. However, they make up for it with the dreaded inactivity fee. I hate inactivity fees, but there are ways around it. They hit you with it if you’ve not had a commissionable stock trade in the last 12 months and your account value is under $2,500. If you’re over this, then it’s no concern, but if not you need to be aware of it, otherwise TradeKing will smack you with a $50 annual inactivity fee.

Not Available 24 Hours: As with OptionsXpress, TradeKing does not offer 24 hour service. I imagine this is partially why they’re able to offer such good rates. They’re available via phone and chat from 8:00-6:00 EST Monday through Friday. This may not be a big deal for some, but for others it could be a detractor.

My Take on TradeKing

To be completely honest, I hate inactivity fees. I view them as another way for an institution to make easy money off of you. That said, it’s a fairly easy work around, so it does not automatically knock TradeKing out of consideration for me. I say that because they offer stellar service and their price is very hard to beat. With their solid lineup of offerings, valuable tools and resources to help you as an investor and their accolades I would consider TradeKing a worthy online brokerage to look at to take care of your investing needs, especially if you’re investing in stocks. As always, if you do open an account with TradeKing, make sure you check out their promotions as they regularly run them in order to win your business.

 

What do you look for in an online brokerage when looking to move? What do you have planned for the weekend?

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About the author:

I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. You can connect via Twitter / Facebook.

26 comments on “TradeKing Review: An Online Brokerage Worth Considering

  1. Having used TradeKing for over five years at this point with three different accounts, I would agree that they are a very viable option. Something that is not mentioned here is the high fees for partnership or entity accounts. At last check, this was $250 per year, which is incredibly cheap. You would have to have 63 more trades in a calendar year at $8.95 before it would break even making TradeKing worthwhile for this particular account.

    For my taxable and IRA accounts, I have had no issues, besides being unable to select dividend reinvestment selectively. You are required to contact TradeKing to alter the reinvestment options on your holdings. Lastly, as you have alluded to above, the customer service is phenomenal, albeit while open.
    writing2reality recently posted..Lending Club – July 2013 UpdateMy Profile

    • Thanks for your insight! I went back and forth on the partnership/entity fees and I agree they’re high so I may just add that back in to the review.

      I did not know that about the dividend reinvestment. I am assuming that’s why I didn’t find much in terms of DRIP on their site when I was looking. That said, glad you’ve had a good overall experience with them – I have seen that extensively on the back office side as well as calling in with general questions personally.

    • That’s good you’ve never been impacted by it. You have to look a bit to find it on their site. That’s one thing I wish more companies like this would more upfront about to be honest.

    • Agreed Matt, those fees can be a killer if you don’t know about them or don’t take action to avoid them.

      I understand your point about mutual funds. My point, really, is to communicate that they have more (as opposed to others who offer significantly less) so there is likelihood you’d find what you want. That said, if I was looking to invest in mutual funds and a brokerage didn’t have one I was wanting then I’d likely not go there myself.

    • Yea, I don’t like inactivity fees at all either. That said, $2,500 is not a ton of money, so if you have that then you’re able to avoid it altogether.

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