Investing 
34
comments

OptionsHouse Review: $3.95 Stock & Options Trades

OptionsHouse Logo$3.95 a trade.

(Update 1/14/11: OptionsHouse recently increased their commission from $2.95 to $3.95)

That’s how much it’ll cost you to make a trade at OptionsHouse.

That’s pretty cheap. TradeKing is currently my go-to broker and they charge $4.95 a trade, 67% more than OptionsHouse. Zecco, which is free if you meet their stringent requirements, is the only one that’s cheaper and they can never seem to get their customer service issues resolved.

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 Investing 
17
comments

Smart Money 2009 Best Online Brokers

Another year, another Smart Money broker survey! We’ve been reviewing SmartMoney’s best broker series for several years now (here’s 2008) and it’s always valuable to see how the different brokers fare from year to year. In the 2009 broker survey, we didn’t see too much change compared to 2008.

Unlike last year, which featured a merging of the discount and full service broker lists (in which TradeKing lost a #1 ranking they enjoyed for several years), they didn’t make any big changes to the way they analyzed the brokers. (here’s the list if you want to take a peek)

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 Investing 
11
comments

Consumer Reports America’s Best Brokers

On The Money, the personal finance show on CNBC hosted by Carmen Wong Ulrich, recently had a little web extra spotlighting Consumer Report’s list of best brokers. In their brief piece, they talked about the top three: USAA Brokerage Services, Vanguard, and Edward Jones.

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 Investing 
0
comments

Free Tax & Trading Intelligence Report

I’ve been using TradeKing for a while now and one of the many things that separates them from their competition (E*Trade, Zecco, etc.) is the wealth of information they offer you, especially with options education. TradeKing has a free ebook, they call them “intelligence reports,” about taxes and the stock market. The Tax & Trading Intelligence Report is free and it’s a seven page document that discusses a variety of stock investing topics from retirement accounts to wash sales.

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 Retirement 
19
comments

Which is the Best Broker for an IRA?

Retirement Nest EggsOne of the most frequent questions I get is “Where should I open an IRA?”

Short answer: Anywhere, just open one! If you want mutual funds, open an account with the company that offers the funds you want, like Vanguard, Fidelity, etc; because they will let you buy and sell the funds for free. If you want stocks, open an account with a company that offers the lowest fees.

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 Investing 
8
comments

Zecco’s New Commission Plan: $25,000 Balance Required Free Trades

Zecco just sent out a message to their account holders – Starting March 1st, to qualify for 10 free stock trades per month, you need to have an account balance of $25,000 or more. This is a ten-fold increase from their prior requirement of $2,500, which was itself an infinite increase from their initial offer of unlimited free trades. Another way to get ten free stock trades is to have 25 or more total trades a month, which cost $4.50 a trade.

When your balance gets above $25,000, you immediately get ten free trades you can use until the end of the month. Should your balance fall under $25,000, then you still retain your ten free trades until the rest of the month. With the 25 trades qualification, once you make 25 trades, you get ten free until the end of the month. That next month, you get ten free trades to start and need only 15 more to retain the ten free trade status for the following month.

Zero Cost Commissions, the meaning being Zecco, is slowly losing its meaning. It used to to be unlimited free trades. Then it was lowered to ten free trades if you had a $2,500 balance. Now it’s ten free trades if you have a $25,000 balance or if you make 25 trades ($112.50 in commissions). If all things were equal, I’d say that Zecco gave a pretty good offer, but things aren’t equal. Zecco has consistently been rated as worst in customer service! Smart Money’s 2008 Best Discount Broker survey rated Zecco 14th out of 16 and there are a slew of negative comments about Zecco’s customer service. This is amazing considering TradeKing, rated amongst the best discount brokers, has had stellar reviews and they charge only 45 cents more per trade, only $4.95 a trade.


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 Investing 
10
comments

Low Minimum Initial Investment Mutual Funds

Every so often I get an email from a reader asking me whether they should open up a mutual fund account with a few hundred dollars or try to save up more before they enter the wild and crazy world of the stock market. My typical advice is that they should save up a little bit of money first because the minimum account balance required by many mutual funds is often much greater than a few hundred bucks. Even if you wanted to open up a regular brokerage account and trade stocks, it’s a bad idea because of commissions. Unless you trade for free with Zecco, even the $4.95 commission of TradeKing would be disaster on a few hundred dollars.

However, in my Vanguard-centric view of the mutual fund world, I overlooked some firms offering funds with much lower balance requirements. Vanguard’s lowest offering is the STAR Fund (VGSTX) at $1,000 but there are many mutual funds are need a mere $100 to start.

The quickest way to find them is to use Morningstar’s mutual fund screener. You can set all sorts of factors but the minimum initial investment factor is listed under Cost and Purchase. While you’re there, I’d definitely set Load funds to “No-load funds only” (as in no sales commission) and Expense ratio less than or equal to: to “1.00%.” That will, as of this writing, get you that hits the screener maximum of 200.

As for which one is best, I’d just tick the 5-star setting and pick from one of the 26 results. There are several options in there that could yield good results. I’d ignore the YTD returns as a factor since all stock funds will have suffered huge losses (and bonds have eeked out tiny gains) this past year.

One caveat, the tool will list funds that are closed to new investors. Those who picked out the Fidelity fund listed in the screen above, the Fidelity Congress Street fund, will notice that it’s closed to new investors. :(


 Investing 
4
comments

Kiplinger’s Best Discount Brokers

In the latest issue of Kiplinger’s Personal Finance, they rated a dozen discount brokers on a variety of factors including commission, research & tools, fees, investment options, “easy of use,” and customer service. The results were pretty close to the results of Smart Money’s 2008 ranking of the best discount brokers.

Kiplinger’s Best Discount Brokers

  1. Fidelity
  2. Charles Schwab
  3. Muriel Siebert
  4. TradeKing
  5. E*Trade
  6. OptionsHouse
  7. TD Ameritrade
  8. WellsTrade
  9. Firstrade
  10. OptionsXpress
  11. Zecco
  12. Scottrade


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