Pricing
Features
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TD Ameritrade Review
TD Ameritrade® is one of the brokerages you will often see on TV commercials. Their large size and advertising budget enable them to do this. The problem with this type of broker is that additional budget results in higher commissions. While a $9.99 flat-rate (unlimited shares) commission isn’t the worst deal out there, it certainly isn’t the best. If you are a fairly active trader, those commissions add up quickly, and take a good chunk of your profits away. Newly offered trading instruments include Futures and Forex, but only via the thinkorswim trading platform.
What TD Ameritrade lacks in pricing, they do nicely make up for in features. They have quite a number of research tools, lots of trading instruments to choose from, and a fairly intuitive structure for navigating through the various bits of data. We like the order entry tool that resides at the bottom of the page, as well as the order status page which allows you to quickly modify order price and size. They also have an app for iPhone/iPod Touch, Android, and select BlackBerry devices called iStockManager which keeps you trading on the go.
As far as platforms TDAmeritrade offers several avenues to get your streaming data, our favorite being the new thinkorswim platform which is superb for daytraders. However, like we mentioned above, the $9.99 commission is not cost effective for someone making several trades a day. The thinkorswim platform opens up some nice features such as paper/virtual trading (known as think OnDemand, allowing you to paper trade using historical data in real-time), live streaming CNBC, complex option orders, advanced charts, etc. For daytraders one of the slickest features is the ‘Active Trader’ section where you can view a customizable chart, order entry interface, time and sales, level 2 and the ‘Active Trader’ trade ladder. The trade ladder shows you current price, market depth, volume at each price level, and allows one click order entry and drag and drop order modifications. With a feature like this there isn’t even a need to have traditional Level 2 quotes up.
We like the thinkorswim platform, and it seems to be improving over time, but we think E*TRADE’s Power E*TRADE Pro platform is superior. If you’re going to pay $9.99/trade, we think E*TRADE is a better option, having the same or better tools and features.
Other methods for monitoring your stocks include the Streamer Suite, which lets you open various java tools such as; charts, watchlists, level 2 quotes (now including PinkSheet and OCTBB data), and time and sales. They also offer the Command Center 2.0, which offers the aforementioned tools, and some more including a pattern matcher, and order manager. The Command Center lets you frame all of your tools into one main window, as apposed to the Streamer Suite which leaves you with a bunch of separate windows that clutter your taskbar. A nice feature is that you can manage your trades completely within the Command Center. We find that these java based tools can be finicky when it comes to loading, especially if you have another java application running. Unless you are trading OTC/PinkSheet stocks, we recommend sticking with the thinkorswim platform.
To get some of the advanced tools (outside of the thinkorswim platform) such as Level 2 quotes (now includes PinkSheet and OTCBB), QuoteScope and Advanced Analyzer, you must be a TD Ameritrade Apex client. To reach Apex qualification you must average 5 trades per month over a 3-month period, or maintain an account value of $100,000+. We have noticed that once you get Apex qualified, it doesn’t get taken away. This is in our case, so your mileage may vary.
Customer support is available via phone and email. We are disappointed that TD Ameritrade does not have a live chat support option like many other brokers. We have had good and bad experiences with support. The personnel is courteous and professional, but we once had an issue with a trade that didn’t execute when it should have, and received no offer to correct the issue or at the very least a good faith offering of a free trade or two.
Trade executions can be slow at times, especially on high volume days when the TD Ameritrade website gets a ton of traffic. The brokerage has an OK price for penny stock traders, in that the commission is flat-rate (unlimited shares) for stocks of any price. However, certain penny stocks are often restricted, resulting in “phone in only orders” or “no opening transactions”. The tools TD Ameritrade offers are fairly useful for penny stocks now that they offer PinkSheet Level 2 quotes as well as OTCBB Level 2. However, the quotes are often on a slight delay which makes using them cumbersome. So, while the pricing isn’t horrible, and you do get Level 2 – albeit somewhat crippled – overall this is not a great broker for penny stocks.
Opening a TD Ameritrade Account:
TD Ameritrade has a simple application process as you’d expect from a high budget brokerage that has been around for many years. You should be able to complete the application in 5-10 minutes. The account should be approved nearly instantly, and the ACH setup process is simple and quick – requiring no micro-deposit verification. There is curently no minimum funding level for cash accounts.
Available Equities and Commissions:
- Stocks/ETFs – $9.99 Flat Rate (Unlimited Shares, Broker Assisted – $44.99)
- Options – $9.99 + $0.75 per contract
- Mutual Funds – $49.99 No-load
- Futrues – via thinkorswim platform - $3.50 per contract (inclusive of exchange fees)
- Forex – via thinkorswim platform – No commission on increments of 10,000 units, otherwise $1 minimum and/or $0.10 per 1,000 units
- Bonds – On net yield basis
- Treasuries – $25 Flat fee
Other Details:
Annual/Maintenance Fees: None
Direct Access Trading: No
After Hours Trading: Yes, no extra fee
Penson Cleared: No
Software Platform Based Data/Trading: Yes, thinkorswim desktop software, or Java based Command Center 2.0 or Streamer Suite
Web Based Streaming Data: Yes
Level 2 Quotes: Yes, with Apex. PinkSheet Level 2 is now available, although OTCBB/PinkSheet Level 2 is often delayed or incomplete.
Online Trading Community: No
Live Online Chat Support: No
Virtual/Paper Trading: Yes, with thinkorswim platform
Mobile Trading: Yes (Web based or apps for iPhone/iPod Touch, Android, and select BlackBerry devices)
TD Ameritrade Account Pros:
-No inactivity/maintenance fees
-Excellent thinkorswim desktop trading platform
-Futures and Forex trading built in via thinkorswim
-Flat rate stock commission (unlimited shares)
-OTCBB and PinkSheet Level 2 included with Apex
-Mobile trading apps
-No extra after hours fees
TD Ameritrade Account Cons:
-High commissions, especially for mutual funds
-No live online chat support
-Some penny stocks are restricted or “phone-in only”
-Executions can be slow at times
-Research tools could be better
-No online community
The Verdict:
TD Ameritrade is a well known online brokerage, but it certainly isn’t the best, and definitely isn’t the cheapest. In fact it was rated the second most expensive brokerage for frequent traders by Barron’s magazine in 2010. If the high commissions got you a good value in trading and research tools, then they could be somewhat forgiven. This isn’t quite the case, however. We do like the order interface and status page, but you can do just as well, or better with other brokers that charge half or less per trade. The mobile trading apps are also quite nice, but again, these features should be icing on the cake, not the cake itself. For these reasons we simply cannot recommend opening an account with TD Ameritrade, given all of the other alternatives. Like we said in the review, if you’re going to spend $9.99 per trade, go with E*TRADE and you’ll get much more of a “bang for your buck”.
Sign-up Promotion:
Open a Non-IRA account by June 30, 2011 and receive 30 days of commission free internet trades plus up to $500 cash depending on your funding level. See TD Ameritrade’s “Special Offer” page for current details.
| Overall Rating |
November 10th, 2010 at 4:24 AM
I have been using TD Ameritrade for more that 2 years, not anymore. I am an active trader, and everything was perfect until I experienced a problem with Command Center 2.0, they had technical problem, and because of that I lost significant amount of money. After I called them they gave me 10 free trades which is nothing compare to my loss. So, many hours on phone I wasted by trying ti get my money back, NOOOO. I called different brokers and explained situation, they were surprised, how it is so unprofessional, especially when I had a talk with main supervisor, it was terrific. So unprofessional person who manages people, she does not know how to do business. The company already lost more because my negative advertisement about company, and my inactivity. If TD is going to continue this kind of behavior they are going to be nothing, even with a good platform from Thinkorswim. There are a lot of brokers around, even much- much cheaper and better tools. My recommendation is do not deal with TD Ameritrade if you want to trade safely.
February 11th, 2011 at 8:46 AM
Just search for “Td Ameritrade Lagging quotes” on google