Which brokerage do you use?

[thebbqguy]

I used TD Waterhouse before they became TD Ameritrade. I got aggravated with them when they implemented a $25 quarterly "activity fee". I closed my account with them and just piled everything back into my 401k.
A friend is an Edward Jones broker (I used to be one too), so we opened an account with him for my wife's 401k rollover and we have a taxable account there. I do like their Focus List for dividend stock research, but being full service they are expensive.
We don't "trade". If we did, I'd have to go with a discount broker. It would actually probaby be TD Ameritrade.
They seem to have a nice mix of tools.
Trade Unlimited Shares (market or limit)
Internet
$9.99
Interactive Voice Response (IVR) Phone System
$34.99
Broker-assisted
$44.99

[jennypenny]

Time to switch again. Any current recommendations?

[workathome]

I like Schwab, their customer service has always been great. A lot of free tools too.

[Chad]

The top 10 to 20 online brokerages are all rather similar now (Scott, Schwab, Etrade, TD Ameritrade, Fidelity, etc.). I would just pick the one you are most comfortable with.

[5to9]

I use Fidelity, mostly because the Fidelity Rewards Visa gives double the cash back if you deposit it to a Fidelity investment account. (I know not everyone here likes credit cards, but if you're going to use them, getting free money is nice).

[jennypenny]

Here's a good review of the top brokers from last year. I'll watch for an update this month and post it if they do one. http://www.stockbrokers.com/2013-online ... eview.html

[George the original one]

Overall, I'd agree with the 2013 review.

[chipmunk]

Original post on February 14, 2012:

My current situation isn't working anymore. The trades are inexpensive, but the tools aren't great. It's more suited to mutual fund and buy and hold types, not trading. I've asked around, but the recommendations I get in Stepford are either too expensive or I get patted on the head like a puppy and told to have my husband give them a call (hello, 21st century anyone??).
Do any of you have a recommendation? I started with this list...

http://www.savings-secrets.com/

New post on February 14, 2014:

Time to switch again. Any current recommendations?

What's with the need to switch brokerages on Valentine's Day in even-numbered years? Coincidence?

[jennypenny]

What's with the need to switch brokerages on Valentine's Day in even-numbered years? Coincidence?

I analyze this every February and August.


Here's the 2014 review (for some reason, the formatting is off) ... http://www.stockbrokers.com/2014-online ... eview.html


FWIW, I'm down to trademonster or lightspeed, although I'm seriously considering going back to tradestation.

[altoid]

A question for Interactive Brokerage Users:

I initially opened a cash account, but it appears I can't immediately buy a stock after I sell another. It has to be t+3 for settle, then available for trade.

It seems a bit odd to me, not only all the other brokerages (Schwab, Fidelity, OH) let me do that, also didn't the buy order take 3 days to settle as well ? Why couldn't I use the unsettled fund to trade ?

It is frustrating, that every time I make a trade, I have to wait 3 days before making another move. Is IB's way to use my cash and lend it to others for margin?

[George the original one]

Technically, they're following what used to be standard practice. What the other brokers are doing is akin to banks that immediately credit your account when you deposit a check rather than waiting for a check to clear.

You have to remember that IB doesn't have the money until the trade settles.

[altoid]

OK, I just had a live chat with IB customer support. It seems to me, the way to get around from this, is to open margin account. You can trade unsettled cash, but is not considered borrowing on margin. Any flaws in this approach?

[jacob]

The cash and the shares are "in the mail", so to speak, to be settled on the third day. It is my understanding (which may be wrong) that the holder of the cash gets the interest until and including the T+3 day. Conversely, the holder of the stock gets the dividend until and including the T+3 day. The broker gets nothing other than your commission.

When some brokerages credit you immediately, they are actually extending [margin] credit to you. There are some limitations to this (called regulation T) in that you can't actually use this credit for "day"-trading. This is why some brokerages tell you that you're using unsettled funds to trade and that you would be in violation if you sell again before the original trade settled. (It would be like using free margin ... comparable to writing uncovered checks... you're trading with credit which is not yours to use).

Of course the whole T+3 dates back to when checks and share certificates were actually being mailed around. To compare, treasuries settle on T+1 and futures settle on T+0.

(US markets only. Each country has its own idiosyncratic rules.)

[George the original one]

IB is best when you're using margin. If you're not using margin and seldom trade, then the other brokerages are better.

[jacob]

@altoid - That would work. Except the way you phrased it. You can't trade in and out at-will with unsettled cash. You have to wait until the original trade settled before you can trade out of the second trade.

I'm guessing IB does it this way to protect themselves and you. If you're approved for margin and you do trade out (when you're not supposed to) they can mark it as a margin trade rather than a violation (in which case they are obligated to shut down your account for repeat offenders).

[altoid]

@George, margin sounds risky... the primary reason I want to try IB is for their low fees

@Jacob, that is an interesting point. So if I open reg T margin account, I can essentially borrow my own cash (unsettled) for free, woot !

[jacob]

@altoid - Well, yes, borrow it in the sense you can borrow it with other brokerages. If you start trading it, it will no longer be free (you will be on margin).

[Chad]

What's with the need to switch brokerages on Valentine's Day in even-numbered years? Coincidence?

I analyze this every February and August.


Here's the 2014 review (for some reason, the formatting is off) ... http://www.stockbrokers.com/2014-online ... eview.html


FWIW, I'm down to trademonster or lightspeed, although I'm seriously considering going back to tradestation.

Why not open a small account at the brokerage that has the tools you want and keep the rest in the cheap brokers for trading?

[altoid]

@Jacob, If I have less than 25k in IB, and actively trade the account, either same day, or a few days. Will I be flagged and get my account suspended? Why is it so hard for small investor ? !

[jacob]

If you're trading multiple times per week, you're essentially a day trader. It doesn't matter how big your operation is just as it doesn't matter whether your small business is making $1000/year or $1,000,000 per year. The rules are the same. Being a day-trader might influence how you file taxes too (if you're a US person).

If you really wish to trade that much and you think you're good at it, try to join a trading company. They'll take care of all the back-office stuff for you then. If I were you, I would just keep a cash buffer and wait 3 days.