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Scottrade Review



Scottrade® is a well established discount brokerage with a history going back 30 years now. This fact may not be obvious because of the relatively recent advertising you may have noticed for Scottrade. In fact, the company was started in 1980 and started offering online trading in 1996. Even with that long of a history, and a robust advertising budget, Scottrade manages to offer a fair, $7 stock commission for stocks over $1. There are no inactivity or account maintenance fees.  Scottrade also offer nearly 3,000 NTF (no transaction fee) mutual funds, and almost 15,000 mutual funds in total, making Scottrade a great option for mutual fund investors. Overall, Scottrade offers a quite diverse catalog of available investments and accounts compared to other brokers; including Coverdell ESAs, CDs, and foreign investments (ADRs, ORDs, Canadian securities).

Scottrade customer service is highly rated, and the brokerage overall has ranked “Highest in Investor Satisfaction with Online Investing Services by J.D. Power and Associates” seven times now.. and that is just one of long list of prestigious awards and rankings. Service is available via phone, email, or one of over 400 local Scottrade branches. Having local branches is one feature that helps Scottrade really stand out, especially for those that would rather not rely on, or feel comfortable about, an “online only” broker.

Scottrade

The Scottrade website is quite easy to use, but could be laid out a little better. Stock order entry is simple and effective, and it is possible to modify orders with little effort. The options order interface works fine, but the brokerage is missing all but the most simple options order types. For more advanced options orders/strategies you could try Scottrade OptionsFirst, offered as a separate account. However, for options traders, we feel there are better choices such as TradeMONSTER, optionsXpress, and Optionshouse. The features and high commissions ($7 + $1.25/contract) simply don’t justify using Scottrade for any sort of active or intense option trading.

Basic java based real-time streaming data tools are included allowing you to track your portfolio, charts, time and sales, and market movers. More advanced tools are available for account owners with a balance of $25,000+. Meeting this requirement gives you access to ScottradeELITE, a pro-level, software-based trading platform. ScottradeELITE includes every feature of the basic streamer plus Level 2 quotes, advanced charting, advanced screener, backtesting tool, account information, and much more, all in a fully customizable interface. It also allows you to populate new orders by clicking on quotes, and modify existing orders quickly.

Scottrade also lets you keep in touch with your investments on the go, with a dedicated mobile trading website. Accessible from any web-enabled mobile device, the mobile trading site lets you monitor your account, check quotes and news, and enter, modify, or cancel trades.

Opening a Scottrade Account:

The Scottrade application process is quite easy to complete, taking about ten minutes from start to finish. During the process you will select a local branch to associate with the account. At the end of the application you set up the funding option, the easiest and most popular option being the “Money Direct” feature. This is essentially an ACH relationship with your bank account, but unlike most ACH setups, Money Direct transfers are credited to your account the same day if initiated by 8:45PM ET. Setting it up is a snap, and it allows you to see your current bank account balance. Unfortunately, you cannot use Money Direct to withdraw funds from your account. There is a $500 opening minimum for cash accounts.

Scottrade

Available Equities and Commissions:

  • Stocks/ETFs – $7 for stocks over $1 (Broker Assisted – $27)
  • International trades – $7
  • Options – $7 per trade plus $1.25 per contract
  • Mutual Funds – Free for NTF funds, $17 for others
  • CDs and Bonds – No Fees

Other Details:

Annual/Maintenance Fees: None

Direct Access Trading: No

After Hours Trading: Yes, No extra fee, 100K shares max order

Penson Cleared: No

Software Platform Based Data/Trading: Available – ScottradeELITE requires $25K min balance

Web Based Streaming Data: Available

Level 2 Quotes: Available with ScottradeELITE

Online Trading Community: Yes

Live Online Chat Support: No

Virtual/Paper Trading: Only with ScottradeELITE

Mobile Trading: Yes – Dedicated mobile website


Scottrade Account Pros:

-$7 trades (for stocks over $1)

-Multiple award winning brokerage with Highest Investor Satisfaction rating by JD Power & Associates

-No inactivity/maintenance fees

-Low $500 cash account minimum

-No IRA fees

-Thousands of mutual funds including nearly 3,000 NTF (no fee) funds

-Over 400 local branches

-Powerful ScottradeELITE platform for $25K+ customers

-Online community and friendly customer support for new investors

Scottrade Account Cons:

-Research and basic streaming tools could be better

-ScottradeELITE requires $25K+ minimum balance

-Options commissions and order features are not competitive

-Additional 1/2% of principal added to the $7 commission for stocks under $1

The Verdict:

Scottrade is a highly rated broker for many reasons, and those reasons make it a good choice as an online brokerage account for most investors. Scottrade is a very affordable option for those that trade/invest in stocks, mutual funds, bonds and CDs. For those that are active traders of options, or want to be able to trade penny stocks, there are far better brokers such as TradeMONSTER and ChoiceTrade. If those arenas have no significance to you now, or possibly in the future, then we urge you to take a close look at Scottrade.

- Scottrade Sign-up Promotion -

Scottrade
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Last Updated on April 13th, 2011 at 7:55 PM

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