STORM Signals Broker Guide - Agora Financial Services

12 Pages·2013·0.18 MB·English

STORM Signals Broker Guide

STORM Signals Broker Guide
By far, one of the most common questions we get here at Agora Financial is “What broker should I use?”
Unfortunately, it’s also one of the most difficult questions to answer.
That’s because personal preference weighs so heavily on the decision over which broker makes the most
sense. For some, cost is the number-one factor. Others want a broker with a low minimum opening deposit.
Obviously, the broker you choose can have a big impact on your ability to make a profit on your trades.
Say you buy 500 shares of a $1 stock. Then months later, it jumps to $2, so you decide to sell. That’s a
quick double, right? Not really. In fact, your total gains could be anywhere between 88–98%.
The difference depends on how much commission (the fee a broker charges to execute your trade) you
had to pay to make each trade.
But not all brokers charge the same commissions. And shopping for the best deal can have a big
impact on your bottom line. For any investor, a good broker is an absolute must. Choosing wisely can
be the difference between making 30% a year and barely breaking even.
In today’s world of electronic trading and internet investing resources, there’s little difference
between the actual execution services of brokerage houses… In other words, for the vast majority
of investors, buying shares of a stock happens just as quickly with Scottrade or thinkorswim as it
does with InteractiveBrokers or Sogotrade.
If execution isn’t a differentiating factor, what is?
These days, qualitative factors mean a lot more than they used to. Broker offerings like premium
research, a professional trading platform, and educational tools can mean a big difference in your
competitive advantage over traders who don’t have access to those tools.
And for options investors, there’s also the question of how easy executing well-priced options trades
will be (should you decide to trade them), as well as whether or not you’ll be charged different commissions
for stocks that trade under $1.
In the STORM Signals Broker Guide, we’re not picking sides — ultimately, your ideal broker is far too
personal of a choice for us to provide any kind of ranking. But that doesn’t mean we can’t guide you in
the right direction. In this guide, we’ve listed commissions, fees, and descriptions of a handful of the
industry’s most popular brokerage options.
Before you sign-up with any broker, make sure that you check out their website, give them a call, and
read reviews on them to get a feel for their service. It’s true that not all brokers are created equal…
While every effort has been made to keep the information as up-to-date as possible, prices and other
data are subject to change. So make sure to check before you sign up with any broker.
STORM Signals 1 www.agorafinancial.com
(Please note this list is in alphabetical order.)
Charles Schwab: Charles Schwab was the first discount broker on the market, and it revolutionized the
way trading was done. While Charles Schwab may have been the pioneer in the discount broker world,
it’s no longer the cheapest.
Website www.schwab.com
Phone # [phone]
Commissions $8.95 per trade
Extra Fees For options + $0.75 per contract
Account Minimum $1,000.00
ChoiceTrade: ChoiceTrade is probably the most straightforward of all the online brokers. It has a pretty
darn simple commission structure.
Website www.choicetrade.com
Phone # [phone]
Commissions $5.00 per trade
Extra Fees For options +$0.15 per contract
Account Minimum None
If you aren’t an active trader/investor, ChoiceTrade may be a nice fit for you. There are no inactivity or
quarterly fees if you don’t make a bazillion trades a month.
E*TRADE: E*TRADE is a cheap online broker mainly for active traders who don’t need a lot of hand-holding.
Website www.etrade.com
Phone # [phone]
Commissions $9.99 per trade
Extra Fees For options + $0.75 per contract
Account Minimum $500.00
While there are no extra commissions to trade OTC stocks, these trades must be placed with a limit order.
Fidelity: Fidelity offers a lot of 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 but the price and convenience
of a discount broker.
Website www.fidelity.com
Phone # [phone]
Commissions $7.95 per trade
Extra Fees For options + $0.75 per contract
Account Minimum None
Firstrade: Firstrade may not be quite as well-known as some of the other online brokers, but it’s defi-
nitely worth a look. It is truly a deep-discount brokerage service that should only be used if you need
no help whatsoever.
STORM Signals 2 www.agorafinancial.com
Website www.firstrade.com
Phone # [phone]
Commissions $6.95 per trade
• For stocks under $1.00 and over 5,000 shares, add
Extra Fees half a cent per share
• For options + $0.75 per contract
Account Minimum None
Interactive Brokers: IB’s commission structure is a bit more complex than most, but it’s worth thumbing
through. In our experience, this is the preferred broker for more experienced and more active traders.
Website www.interactivebrokers.com
Phone # [phone]
Commissions $0.005 per share, minimum of $1 per trade
Extra Fees For options + $0.70 per contract
Account Minimum $10,000.00; $3,000.00 if under 26
Interactive Brokers is aimed primarily at highly experienced and professional investors. If you do not
have investing experience under your belt, stay away from IB.
LowTrades: LowTrades is another good little discount broker to take a look at. As the name suggests,
LowTrades is not expensive — managing to low-ball even Scottrade. That’s because LowTrades was
founded on the belief that there is an abundance of free research available to the average investor via the
Internet. All it provides is a quick, easy transaction — but that’s what keeps the commission rate so low.
Website www.lowtrades.com
Phone # [phone]
Commissions $4.95 per trade
• For options +$0.60 per contract
Extra Fees • No inactivity charge so long as you make
2 trades per year
Account Minimum None
Merrill Edge: When Bank of America acquired Merrill Lynch in the wake of the financial crisis, it also got
a massive online discount brokerage platform in Merrill Edge. Investors willing to pony up larger account
minimums can get significant free trades each month.
Website www.merrilledge.com
Phone # [phone]
Commissions $6.95 per trade
Extra Fees For options + $0.75 per contract
Account Minimum None
MB Trading: MB Trading is another low-cost broker to keep an eye on.

STORM Signals 3 www.agorafinancial.com
Website www.mbtrading.com
Phone # [phone]
Commissions $4.95
Extra Fees For options + $0.95 per contract
Account Minimum $1,000
OptionsHouse: This bargain-priced brokerage firm also offers free trade promotions right now for
new accounts.
Website www.optionshouse.com
Phone # [phone]
Commissions $3.95
Extra Fees For options $8.50 + $0.15 per contract
Account Minimum $1,000
optionsXpress: Now a part of Charles Schwab (above), there’s a significant difference between option-
sXpress and most of the other online brokers: optionsXpress charges nothing for trades made with a
broker’s assistance.
Website www.optionsxp.com
Phone # [phone]
Commissions $8.95 per trade
Extra Fees • For options $14.95 pertrade
Account Minimum None
PennTrade: PennTrade is the online arm of Pennaluna & Co., an Idaho-based broker. It has one of the
simplest fee structures of any online broker. But simple doesn’t necessarily mean cheap.
Website www.penntrade.com
Phone # [phone]
Commissions $29.95 per trade, every 10th trade free
Extra Fees None
Account Minimum $500.00
Scottrade: Scottrade is one of the cheapest online brokers you will find. Like E*TRADE, Scottrade is a
very bare-bones broker. But it is cheap!
Website www.scottrade.com
Phone # [phone]
Commissions $7.00 per trade
• For stocks priced under $1, Scottrade charges an
additional fee of 0.5% of the total principal in addition
Extra Fees
to the $7 flat commission
• For options $7.00 +$1.25 for limit and market orders
Account Minimum $500.00
STORM Signals 4 www.agorafinancial.com
ShareBuilder: While ShareBuilder is a good brokerage choice for new investors with limited capital and
experience, its available stocks are limited to those on the ShareBuilder Stocks List, which doesn’t
include many penny stocks — especially those traded OTC.
Website www.sharebuilder.com
Phone # [phone]
Commissions $6.95 per trade
Extra Fees For options + $.75 per contract
Account Minimum None
SogoTrade: SogoTrade is another unique broker that’s attempting to take on the traditional price
structures of the larger discount brokerage firms. Check out SogoTrade’s special offers if you’re
considering joining — they often give out 100 free trades for new accounts.
Website www.sogotrade.com
Phone # [phone]
Commissions $5.00 per trade
Extra Fees For options $0.50 per contract
Account Minimum None
TD Ameritrade/thinkorswim: TD Ameritrade is the company formed from the merger of TD Water-
house and Ameritrade — the firm acquired thinkorswim in 2009, integrating its popular trading platform.
Website www.tdameritrade.com
Phone # [phone]
Commissions $9.99 per trade
Extra Fees For options + $0.75 per contract
Account Minimum None
There is no minimum account balance, but in order to be eligible for most promotions, you must have
at least $1,000 in your account.
TradeKing: Unlike other brokers, TradeKing’s $4.95 commissions include broker-assisted trades, which
often cost near $50. If you’re new to the investing game, and want a broker to help guide you through
your trading decisions, TradeKing is a smart choice.
Website www.tradeking.com
Phone # [phone]
Commissions $4.95 per trade
Extra Fees For options + $0.65 per contract
Account Minimum None
tradeMONTSTER: While options trading is tradeMONSTER’s bread and butter, this modern broker
also offers attractive pricing for stock investors.

STORM Signals 5 www.agorafinancial.com
Website www.trademonster.com
Phone # [phone]
Commissions $7.50 per trade
For options + $0.50 per contract, $12.50 minimum per
Extra Fees
trade
Account Minimum $2,000.000
Trading Direct: Trading Direct is a division of York Securities, which was founded in 1979 and is one of
the original discount brokers.
Website www.tradingdirect.com
Phone # [phone]
Commissions $10.95 per trade
• For stocks less than $1 there is a $19.95 charge
• I nactive accounts get charged $60.00 on an annual basis
Extra Fees (year ending in June 30). Making one trade per year
would exempt you from this fee.
• For options + $1.00 per contract
Account Minimum $500.00
A Final Word
Before you open any brokerage account, you should do some research on your own. In recent years,
competition among discount brokers has resulted in lower prices and more possibilities for investors.
Brokers are now providing a wider range of services based on the size and frequency of your investments.
Don’t be afraid to call and speak with a customer service rep. Many brokerages will try to get you to sort
through “Frequently Asked Questions” or message boards on the company’s web site, but that’s no good.
Don’t open an account until all your questions have been answered. You have a right to speak to someone
before giving a brokerage your money.
Happy trading!
STORM Signals 6 www.agorafinancial.com
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