ChoiceTrade Review

ChoiceTrade® is a super discount stock broker that offers a flat trade commission of only $5 for up to 500,000 shares.* There are no pricing restrictions or hidden fees, and no minimum per trade! This makes ChoiceTrade a very attractive and affordable option. In addition they are one of the few online brokers to offer a Direct Access trading option. This allows you to route your orders to a market maker of choice, with commissions of $0.005/share and lower. Options traders will be happy with their recently slashed options commissions of $5 + .15 per contract! That’s super low compared to almost any other broker out there. Even an options broker like optionsXpress will charge you $25 for 20 contracts… At ChoiceTrade, 20 contracts would cost you only $8 per trade!

You may have never heard of ChoiceTrade before due to their low advertising budget, but they are a serious brokerage and have received the Barron’s 4-star award for five years running.

They have earned this with great pricing, speed, and customer service ratings. Customer support is available via phone, email, and live online chat. We truly enjoy the online chat method as it can resolve questions and issues quickly and efficiently, without dealing with the hassle of a phone call.

One of the best aspects of ChoiceTrade is their order execution speed. ChoiceTrade is FAST! Out of all the brokers we’ve tried they are one of, if not the fastest online brokers when it comes to order execution. If you have two windows side by side, one with your order entry page, the other witha Level 2 quote for the stock you are bidding on, once you send the order you will see market maker pop up at your price within a second. We’ve seen orders routed through NITE and AUTO. This quality of ChoiceTrade is of utmost importance to daytraders as well as penny stock traders, who require an edge over other buyers and sellers.

ChoiceTrade is also a good option for a retirement account, as there are no IRA setup or annual fees. The mutual fund transaction fees are not the lowest in the industry, however.

Options traders will be happy to see that ChoiceTrade has just started offering FREE options trades during expiration week! In October 2010 ChoiceTrade launched their Zero-commission Options program, as advertised in Barron’s magazine. Expiration week is the week ending with expiration Friday — the week before the third Saturday of each month. Here is a rundown of the program:

Here is a summary of this program:

• • Zero-commission option trading, once a month, for one week during options expiration week
  • A maximum of 500 option contracts can be traded, per household, at the zero-commission rate each month.
  • Program includes single-leg and multi-leg trades (spreads).
  • Only equity and ETF options qualify.
  • Index option trades do not qualify for zero commission option trades. Index option trades will be charged at the normal options commission of $5 per trade, plus $0.55 per contract.
  • An account is eligible if the account holder has been qualified to trade options.

 

ChoiceTrade has also totally revamped their option trade order interface to allow for quick entry of  complex option strategies such as spreads, straddles, butterflies, condors and combos. This is a feature that some specialty “Options Brokers” don’t even include…

Streaming data tools and level 2 quotes are available via three different optional platforms for an extra fee. The most sophisticated platform is a software platform with eSignal integration. If you are looking for a broker that offers streaming data for free you might consider something else. However, the low trade commissions will save you a lot of money if you are active, and help pay for streaming data through ChoiceTrade, or another provider such as EquityFeed. Their prices are quite reasonable for what you get, however, and this setup allows you to pay for what you need in an a-la-carte fashion. Please see the Commissions and Fees page at the ChoiceTrade website for pricing details.

Mobile trading is available with apps ready for iPhone/iPod Touch,  several BlackBerry devices, and all Windows Mobile 5.0+ devices with touch interface. ChoiceTrade’s site is also fully compatible with iPad for a full, seamless experience. Virtual/Paper trading is available for those wishing to practice strategies without risking  their hard earned money.

Opening a ChoiceTrade Account:

The application at ChoiceTrade is a simple, quick, fully-online process. You can have an application filled and signed electronically in minutes. Application approval is also very quick during business hours. Once approved you can log in to your account and set up your account funding with your bank account information, or find information for wiring funds. Setting up an ACH relationship is fairly standard as a Penson broker, requiring micro-deposit verification. This will take a couple days, but afterward the money transfer is very quick. If you initiate a transfer early in the day it should be available within the next 2 days, and unlike many brokers the money is ready to trade right away, including penny stocks. This makes the overall account setup turnaround one of the quickest in the industry. (The first deposit you make will take 5 days to clear unless you email ChoiceTrade support a screenshot of the transfer from your online bank account, with the account balance visible. Once they receive the image they will clear the funds for trading immediately.)

There is no minimum account funding level for a cash account, however, if you sign up by clicking on one of our links to ChoiceTrade, you are eligible for a special promotion. Click one of our links and sign up for a Non-IRA, margin enabled account, fund it with a minimum of $2000, and receive a $50 cash bonus from ChoiceTrade and 4 free months of ChoiceStreamer Basic service. It’s free money and easy! New customers only, one customer per household.

Available Equities and Commissions:

• Stocks/ETFs – $5 Flat (up to 500,000 shares – add 1% of trade value for more shares, Direct Access is $0.005/share and lower, Broker Assisted Surcharge – $25)
• Options – $5 per trade plus $0.15 per contract
• Mutual Funds – $25 per trade

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Other Details:

Annual/Maintenance Fees: None

Direct Access Trading: Available ($0.005/share and lower)

After Hours Trading: Yes, $0.005/share extra fee

Penson Cleared: Yes

Software Platform Based Data/Trading: Available

Web Based Streaming Data: Available

Level 2 Quotes: Available (including OTCBB/PinkSheet)

Online Trading Community: Yes

Live Online Chat Support: Yes

Virtual/Paper Trading: Yes

Mobile Trading: Yes (Apps for select BlackBerry devices and Windows Mobile 5.0+ phones with touchscreen. iPhone/iPod Touch apps coming soon.)

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ChoiceTrade Pros:

-$5 Flat rate commission (up to 500K shares, no price restrictions)

-FREE Options Trades during expiration week

-Highly rated support

-Barron’s 4-Star rated for 5 years running

-Online trading community

-Mobile trading apps

-iPad friendly website

-Virtual/Paper trading

-Multiple streaming data options

-Direct Access Trading available

-No inactivity or maintenance fees

-Quick application process

-No IRA setup or annual fees

ChoiceTrade Cons:

-Mutual fund fees are not the lowest out there

-Additional $0.005/share for after hours trades

-*Updated: Effective December 1, 2011, there will be an additional commission assessed on any single-order, bulletin board or pink sheet trade of more than 500,000 shares executed on a given day. This large-share-quantity surcharge will amount to 1% of the dollar value of the order, in addition to the normal $5 commission per trade.

The Verdict:

ChoiceTrade is an excellent discount brokerage that offers a highly competitive price-point, friendly customer support, and a great array of included tools and optional data packages. We feel that a ChoiceTrade account is a wise choice for most traders, with the exception being those who are big into mutual fund investments, or those with little experience with online brokers. While their site is continually improving, it is not as user friendly as the big name brokers. Active traders can take advantage of the low cost Direct Access Trading and sophisticated ChoiceTrader Select software platform. If you aren’t quite that active the $5 flat commission gets you nearly twice as many trades for the money compared to most big name brokerages. Penny stock traders are also in good hands at ChoiceTrade. For $5 you get up to 500,000 shares, no matter what the price of the stock is. For more than 500,000 shares a surcharge of 1% of the dollar value of the order will be added to the normal $5 commission. Plus, as a Penson cleared broker you will rarely see buying restrictions on stocks. There is no minimum to open an account, and you can make virtual trades to test it out. ChoiceTrade has also just recently sweetened the deal with FREE options trades during expiration week.. So why not open a ChoiceTrade account today and check it out for yourself?

- ChoiceTrade Sign-up Promotion -

Click one of our links to ChoiceTrade and sign up for a Non-IRA, margin enabled account, fund it with a minimum of $2000, and receive a $50 cash bonus from ChoiceTrade. You will also get 4 free months of ChoiceStreamer Basic service, giving you real-time streaming quotes and more. New customers only, one customer per household.

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Basic Details:

• Minimum to Open: None
• Stock Commission: $5 Flat
• Inactivity Fees: None
• Penny Stock Friendly: Yes - Up to 500,000 shares per order