Tuesday, June 7, 2011

TradeKing Review

Have you already decided on a broker yet?  If not, let me make a recommendation for TradeKing.  As I discussed in my earlier post, when I started I went out to look at discount brokers.  I wanted to minimize the cost of commissions for trades so I first compared prices.  I'll say upfront that TradeKing is definitely not the lowest out there.  I believe Optionshouse has cheaper commissions for both stocks and options (more on this financial derivative later) but TradeKing had a better reputation of customer service as well as a referral bonus.

Let me quickly talk about the referral bonus.  TradeKing will pay $50 to both the referrer and the referred person.  I actively sought out someone who already had a TradeKing account to get referred in order to get his $50 bonus.  Hey, it was an easy $50 which would cover about 10 trades ($4.95 per trade).  If any readers are interested in opening a TradeKing account, I would definitely recommend taking advantage of this referral bonus since you would get some easy money out of it (asking me would be nice, but if you know someone else who can refer you then go for it).  But before I jump to conclusions that you actually want to sign up, let me go over some of TradeKing's service.

In terms of customer service, they do live up to their reputation.  The emails I've sent to them about their own services were responded to promptly within a few hours.  They also have assistants that you can chat online or call in to ask questions.  The people are friendly and they had an answer to all the questions I had.  They also host webinars (online seminars about trading tips) which are optional if you are interested in learning something new.  Obviously, they benefit if you make more trades, but you can use them solely as a learning opportunity.

In terms of tools and research available, they seem to have a decent quality available.  I personally don't use their tools or research that often.  I believe other brokers have been rated better in terms of research and tools, but in terms of your ordinary investor, I believe TradeKing has enough to satisfy.

The interface for TradeKing is very simple.  When you trade, you just pick whether you are buying, selling, selling short, or buying to cover.  Then you put in the number of shares and the ticker symbol, what type of order it is, and the duration for how long you want your trade to be made available to execute.  It is fairly standard across all brokers, so nothing really special here.  Other brokers may have more expensive commissions for non-market orders, but TradeKing has a uniform $4.95 price.

TradeKing's strengths focus on simplicity, a cheap commission, and quality customer service.  I'll admit there isn't anything outstanding about it, but it has value worth more than what you pay.  If you are shopping around for brokers, I would definitely take a closer look at TradeKing.

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