Pytheas
12-08-2005, 06:15 PM
One of the many newsletters I belong to made a comparison of all the reputable online brokers. I would like to pass it on to you guys and girls. Hopefully it will help answer MANY of the same questions we see constantly see here.
Check it out. Here’s my official Online Broker Review (in no particular order)...
1) E*TRADE: E*TRADE charges $12.99 for both market and limit orders -- including
penny stock trading for $1 or less and all OTCBB stocks. You need at least $1,000
to open an account with E*TRADE. And there is a $40 quarterly fee for using their
services. E*TRADE is a cheap online broker mainly for active traders who don’t
need a lot of handholding.
E*TRADE’s contact info: phone: 1-800-387-2331, Web address: www.etrade.com.
2) Fidelity: Fidelity charges $19.95 for both market and limit orders --
including all penny stocks. You need an opening balance of $2,500 to open an
online account. But once you do, there is no quarterly or annual fee.
Fidelity offers a lot more research capabilities -- and is marketed for the more
serious investor (with a higher net worth) who likes the bells-and-whistles of a
full-service broker.
Fidelity’s contact info: phone: 1-800-544-6666, Web address: www.fidelity.com
3) Scottrade: Scottrade is one of the cheapest online brokers you will find. It
charges $7 for both market and limit orders. There are no quarterly or annual
fees. So even if you are an inactive investor, you won’t be penalized for “not
trading.†The only drawback for penny stock investors is this...
In addition to the $7 flat commission, they charge an additional fee of 0.5% of
the total principal. So if you spend $500, you owe Scottrade an addition $2.50
added onto that $7 commission -- making your total commission come to $9.50.
Like E*TRADE, Scottrade is a very bare-bones broker. If offers no handholding
whatsoever. But it is cheap!
Scottrade’s contact info: phone: 1-800-619-7283, Web address: www.scottrade.com.
4) Charles Schwab: Charles Schwab may be the pioneer in the discount broker
world, but it isn’t the cheapest. It charges $19.95 for market and limit
orders -- and an additional $0.015 for all shares over 1,000. In addition,
Schwab charges you a service fee of $45 a quarter.
To open an account with Schwab, you need a minimum of $2,500. And for small-cap
investors, you need to be aware of one thing…
It only costs $19.95 to buy or sell any small-cap or penny stock. However, if you
buy more than 5,000 shares, you have to pay $0.003 for every additional share.
Charles Schwab’s contact info: phone: 1-866-855-6770, Web address:
www.schwab.com.
5) TD Waterhouse: TD Waterhouse charges $17.95 for market orders and $20.95 for
limit orders. You need a $1,000 starting balance to open an account with TDW. And
you are charged a $25 quarterly fee -- which is waived if you make three or more
trades in a 6-month period.
For you small-cap (or penny stock) investors, there is no additional fee to trade
or invest in OTCBB stocks.
One note to keep in mind about TDW: It is in the process of being acquired by
Ameritrade. So my guess is it will soon adopt Ameritrade’s commission and fee
structure. Of course, we’ll have to wait and see. The “helpful representativeâ€
I spoke to couldn’t tell me a thing. Shocker!.
TW Waterhouse’s contact info: phone: 1-800-934-4448, Web address:
www.tdwaterhouse.com
6) Ameritrade: Ameritrade is one of the better-known deep discount online
brokers. It charges a flat $10.99 for all market and limit orders -- and that
includes your OTCBB and penny stocks. You need $2,000 to open an account with
Ameritrade. And you are charged a $15 quarterly fee if your account balance falls
below $2,000 OR you don’t make four trades every six months. (In other words, if
you make four trades, you are exempt from the $15 fee).
Ameritrade’s contact info: phone: 1-800-454-9272, Web address:
www.ameritrade.com
7) Firstrade: Firstrade is one of the online brokers I never heard of before
today. But it caught my attention with its $6.95 commissions, no annual or
quarterly fees and no minimum opening balance required. It is truly a deep
discount brokerage service that should only be used if you don’t need any help
whatsoever.
As far as buying and selling penny stocks, Firstrade does mark up their
commissions a bit. If you trade stocks that sell for $2 or less, you must
tack on an addition fee of ½ a cent per share. So if you buy 1,000 shares of
a $1 stock, it will cost you $6.95 plus $5. So your total commission would
equal $11.95.
Firstrade’s contact info: phone: 1-800-869-8800, Web address: www.firstrade.com.
8) Vanguard: Vanguard is a more full service online broker -- similar to Fidelity
and Schwab. So it should come as no surprise that you must pay more that you
would with E*TRADE or some other deep discount broker.
Vanguard charges $25 to execute any market or limit order. It assesses a $30
annual service fee for every client. You need a minimum opening balance of
$3,000. And if you are interested in buying penny stocks, it gets a little hairy.
You pay a flat $20 commission per play plus 2% of the total principal.
Vanguard’s contact info: phone: 1-800-992-8327, Web address: www.vanguard.com.
9) Wang Investment: This is another broker I knew nothing about before today.
But it too is competing with the likes of E*TRADE, Firstrade and Scottrade. Wang
Investment charges $8 for most market and limit orders. I say “most†market and
limit orders because it costs $25 to buy or sell stocks that trade for $1 or
less.
They charge a $30 service fee every six months. And there is no minimum opening
balance required to open an account with Wang.
Wang Investment’s contact info: phone: 1-800-353-9264, Web address:
www.wangvest.com.
10) Trading Direct: Trading Direct charges $9.95 for all market and limit
orders -- including OTCBB and Pink Sheets stocks. There is no minimum opening
balance required to start an account up. But they do charge a $60 annual fee --
unless you make at least one transaction per year.
Trading Direct’s contact info: phone: 1-800-925-8566, Web address:
www.tradingdirect.com.
Check it out. Here’s my official Online Broker Review (in no particular order)...
1) E*TRADE: E*TRADE charges $12.99 for both market and limit orders -- including
penny stock trading for $1 or less and all OTCBB stocks. You need at least $1,000
to open an account with E*TRADE. And there is a $40 quarterly fee for using their
services. E*TRADE is a cheap online broker mainly for active traders who don’t
need a lot of handholding.
E*TRADE’s contact info: phone: 1-800-387-2331, Web address: www.etrade.com.
2) Fidelity: Fidelity charges $19.95 for both market and limit orders --
including all penny stocks. You need an opening balance of $2,500 to open an
online account. But once you do, there is no quarterly or annual fee.
Fidelity offers a lot more research capabilities -- and is marketed for the more
serious investor (with a higher net worth) who likes the bells-and-whistles of a
full-service broker.
Fidelity’s contact info: phone: 1-800-544-6666, Web address: www.fidelity.com
3) Scottrade: Scottrade is one of the cheapest online brokers you will find. It
charges $7 for both market and limit orders. There are no quarterly or annual
fees. So even if you are an inactive investor, you won’t be penalized for “not
trading.†The only drawback for penny stock investors is this...
In addition to the $7 flat commission, they charge an additional fee of 0.5% of
the total principal. So if you spend $500, you owe Scottrade an addition $2.50
added onto that $7 commission -- making your total commission come to $9.50.
Like E*TRADE, Scottrade is a very bare-bones broker. If offers no handholding
whatsoever. But it is cheap!
Scottrade’s contact info: phone: 1-800-619-7283, Web address: www.scottrade.com.
4) Charles Schwab: Charles Schwab may be the pioneer in the discount broker
world, but it isn’t the cheapest. It charges $19.95 for market and limit
orders -- and an additional $0.015 for all shares over 1,000. In addition,
Schwab charges you a service fee of $45 a quarter.
To open an account with Schwab, you need a minimum of $2,500. And for small-cap
investors, you need to be aware of one thing…
It only costs $19.95 to buy or sell any small-cap or penny stock. However, if you
buy more than 5,000 shares, you have to pay $0.003 for every additional share.
Charles Schwab’s contact info: phone: 1-866-855-6770, Web address:
www.schwab.com.
5) TD Waterhouse: TD Waterhouse charges $17.95 for market orders and $20.95 for
limit orders. You need a $1,000 starting balance to open an account with TDW. And
you are charged a $25 quarterly fee -- which is waived if you make three or more
trades in a 6-month period.
For you small-cap (or penny stock) investors, there is no additional fee to trade
or invest in OTCBB stocks.
One note to keep in mind about TDW: It is in the process of being acquired by
Ameritrade. So my guess is it will soon adopt Ameritrade’s commission and fee
structure. Of course, we’ll have to wait and see. The “helpful representativeâ€
I spoke to couldn’t tell me a thing. Shocker!.
TW Waterhouse’s contact info: phone: 1-800-934-4448, Web address:
www.tdwaterhouse.com
6) Ameritrade: Ameritrade is one of the better-known deep discount online
brokers. It charges a flat $10.99 for all market and limit orders -- and that
includes your OTCBB and penny stocks. You need $2,000 to open an account with
Ameritrade. And you are charged a $15 quarterly fee if your account balance falls
below $2,000 OR you don’t make four trades every six months. (In other words, if
you make four trades, you are exempt from the $15 fee).
Ameritrade’s contact info: phone: 1-800-454-9272, Web address:
www.ameritrade.com
7) Firstrade: Firstrade is one of the online brokers I never heard of before
today. But it caught my attention with its $6.95 commissions, no annual or
quarterly fees and no minimum opening balance required. It is truly a deep
discount brokerage service that should only be used if you don’t need any help
whatsoever.
As far as buying and selling penny stocks, Firstrade does mark up their
commissions a bit. If you trade stocks that sell for $2 or less, you must
tack on an addition fee of ½ a cent per share. So if you buy 1,000 shares of
a $1 stock, it will cost you $6.95 plus $5. So your total commission would
equal $11.95.
Firstrade’s contact info: phone: 1-800-869-8800, Web address: www.firstrade.com.
8) Vanguard: Vanguard is a more full service online broker -- similar to Fidelity
and Schwab. So it should come as no surprise that you must pay more that you
would with E*TRADE or some other deep discount broker.
Vanguard charges $25 to execute any market or limit order. It assesses a $30
annual service fee for every client. You need a minimum opening balance of
$3,000. And if you are interested in buying penny stocks, it gets a little hairy.
You pay a flat $20 commission per play plus 2% of the total principal.
Vanguard’s contact info: phone: 1-800-992-8327, Web address: www.vanguard.com.
9) Wang Investment: This is another broker I knew nothing about before today.
But it too is competing with the likes of E*TRADE, Firstrade and Scottrade. Wang
Investment charges $8 for most market and limit orders. I say “most†market and
limit orders because it costs $25 to buy or sell stocks that trade for $1 or
less.
They charge a $30 service fee every six months. And there is no minimum opening
balance required to open an account with Wang.
Wang Investment’s contact info: phone: 1-800-353-9264, Web address:
www.wangvest.com.
10) Trading Direct: Trading Direct charges $9.95 for all market and limit
orders -- including OTCBB and Pink Sheets stocks. There is no minimum opening
balance required to start an account up. But they do charge a $60 annual fee --
unless you make at least one transaction per year.
Trading Direct’s contact info: phone: 1-800-925-8566, Web address:
www.tradingdirect.com.