Online broker Recommendations for a newb!

[wtf_albino]

Hey all!:biggrin:

I'm 18 years old and I've been messing around with virtual stocks for about 8 months now and I've been looking forward to start a real account with an online brokerage.

I guess I could be classified as primarily a swing trader. I tend to make anywhere from 3-8 trades a week. Though it's not much, I have about $500-700 saved up from working that I'm willing to invest.


I've heard great things about--

Scottrade - Great customer service. $7 trades, And I believe they have a $500 minimum balance to start an account.


Tradeking - $4.95 on trades. That's pretty much all I know about them.

And ThinkorSwim and InteractiveBrokers seem to be very popular as well.



Your recommendations will be very appreciated:cool2:


Thanks in advance!

[atradercomm]

We appreciate your interest in opening an account with Scottrade! There are a few things to keep in mind while considering Scottrade; a $500 deposit and a complete application are all you need to trade online (we do not charge inactivity fees or account maintenance fees). Also, online market and limit equity orders are just $7 for stocks over $1, regardless of trade frequency, account balance or number of shares. In addition to market information and research on www.scottrade.com (http://www.scottrade.com/), we also have free monthly User Summits and more than 360 branches nationwide. Should you have any additional questions, feel free to contact your local branch office.

[LongArm]

If you're trading 3-8 times a week with only $500-$700, commissions are going to be hard to overcome. You might look at 1) trading less frequently (longer duration trades), 2) trading with more money, and/or 3) limiting your broker candidates to the very cheapest available.

Also, trading that frequently may be hard to do in a cash account without risk of incurring freeride violations. To avoid settlement issues, you should open a margin account instead. Problem is, margin accounts require a minimum deposit of $2000.

Just a FYI.

[wtf_albino]

Thanks for your recommendations. :D


Yeah it seems that commissions would take a heavy toll since I don't have a large cash pool to trade with. I think I could get by with maybe 1-2 weekly/bi-weekly trades.

Also, did you mean freeride violations as in being categorized as a day trader and thus being subject to an increased minimum account balance or other penalties? How many trades per week put you at risk?


I've been putting a lot of consideration into TradeKing. Their $4.95 trades and no minimum account balance are very appealing. I might just give them a shot, what do you guys think?:biggrin:

[LongArm]

Also, did you mean freeride violations as in being categorized as a day trader and thus being subject to an increased minimum account balance or other penalties? How many trades per week put you at risk?
No, those are the daytrading rules, which are a different thing altogether: If you execute 4 daytrades (the opening and closing of the same position in the same day) in 5 days, you'll be classified as a pattern daytrader and be required to maintain $25k in your margin account.

Freeriding, on the other hand, has to do with settlement periods in cash accounts. For example, if all your money is tied up in XYZ and you sell it on Monday, the trade doesn't actually settle until 3 days later, which would be Thursday. Even though you won't have the cash yet, you can go ahead and buy ABC on, say, Tuesday, but if you SELL it before Thursday (when your XYZ trade settles), you've done what's called a freeride. That is, you've sold something you haven't actually paid for yet. And that's a no-no which will normally get your account "frozen" for 90 days (which really means you'll be limited to trading on a cash-available basis). This is why it's difficult to be an active trader in a cash account.

As for Tradeking, I've heard mixed reviews but have no first-hand experience with them.

[Pinguin]

I have an equity account with scottrade and my option account with thinkorswim. I definitely like thinkorswims interface over scottrades, but maybe that is just me...

[rkahn]

I use Scottrade and have been very pleased. I think that they could have a better interface, but that's my only complaint - I research elsewhere and trade on Scottrade. Their cust svc reps are great.

[MaryKay1965]

I use Zecco - No problems or complaints.

Use this link to find out more about their fees and the services they offer.
http://buyingondips.com/?page_id=550

[stideas]

I have an equity account with scottrade and my option account with thinkorswim. I definitely like thinkorswims interface over scottrades, but maybe that is just me...

Pinguin:

I am in a similar situation as you. I was trading options in my scottrade account but thought of trying a derivative specialist so opened an options account with TOS. So far so good, quite impressed with TOS...

sti