TradeKing is one of the top rated online discount brokers. TradeKing was rated #1 overall discount broker by Smart Money Magazine (The Wall Street Journal Magazine) in 2006 and 2007, and was rated the best in customer service in 2008. TradeKing was also awarded the highest ranking of 4 stars in Barron’s 12th Annual Survey of Best Browser-Based Online Brokers. The survey ranked TradeKing second (out of 15 Web-based brokers) for both “Usability” and “Cost”.

I recently opened a TradeKing account to take advantage of TradeKing’s $50 promotion and since I know I’m not the only person unfamiliar with TradKing, I thought I would do a review of TradeKing’s features.

Opening a TradeKing Account

Opening a TradeKing account takes about 5-10 minutes, depending on how quickly you can read the terms and conditions. Like all brokerages, TradeKing requires new account holders to enter the standard personal information such as name, address, SSN, employer information, trading experience, financial information, etc.

One thing I noted during the application process was a TradeKing security feature - the use of a keyboard for entering your password (which account holders also use when they sign on to their accounts). This is similar feature to the PIN number on ING Direct accounts and the keyboard login for the Thrift Savings Plan. Added security is always welcome in my book.

Transferring money and making trades

Fee schedule. TradeKing is among the industry leaders for lowest commissions. For Stock and ETF trades, TradeKing charges $4.95 per trade. For option trades, they charge $4.95 per trade, plus 65 cents per contract. There are no balance, maintenance or inactivity fees to worry about, and there are no fees for IRAs. One thing I noticed was that there is a $2.50 fee for paper statements. With almost everything being electronic nowadays I don’t mind passing on the paper statements and relying on e-mail and my printer.

Transferring money. Tradeking allows investors to link an account to their TradeKing account to transfer money via ACH transactions. It is important to note that ACH deposits are subject to a trading hold of 5 business days, and cannot be withdrawn for 10 business days. This might make you miss out on a hot idea if you aren’t prepared and already have your money in your account. An additional downside is that you can only link one bank account to your TradeKing account.

Dividend reinvestments. TradeKing offers free automatic dividend reinvestments (DRIPs), with the ability to purchase fractional shares. Investors have the ability to apply automatic dividend reinvestments to all stocks in their portfolio, or select stocks. This is an attractive feature.

Money Market Sweep. TradeKing gives their account holders the option of placing their uninvested money into a sweep account where they can earn interest (the rates change based on market conditions). It’s important to note that for this to take effect, you will need to contact customer service after setting up your account. The funds are FDIC insured.

Making trades at TradeKing. I haven’t made a trade yet because I am still experiencing the 5 day trading hold after initiating an ACH trasnfer from my linked account. However, the trading interface looks both intuitive and robust.

TradeKing’s trading interface allows investors to perform multiple transactions from the same page, meaning you can set up covered calls, puts, spreads, straddles, and other trading options from the same screen. This is more advanced than my current needs, but will come in useful to many traders.

Investments offered. TradeKing offers stocks, bonds, mutual funds, options, and exchange–traded funds (EFTs). They also offer U.S. Treasury and Agency Issues and CDs.

TradeKing’s Investment Research and Learning Center

Investment Research. The TradeKing platform features online equity, options and fixed-income trading tools including real-time portfolio information, advanced order entry, customized charting and alerts, free research and integrated news, stock, option and mutual fund screeners, volatility charts, a pricing probability calculator, enhanced option chains and interactive educational information.

Learning Center. TradeKing’s Learning Center offers tutorials on a number of investing topics. The Learning Center utilizes a variety of different media, including articles, blogs, free live webcasts and webinars, podcasts, video tutorials, calculators, tools, e-books, newsletters, and links to external resources. Just about any kind of information anyone needs can be found inside the Learning Center or through one of its external sources. The learning center is accessible to everyone, regardless of whether or not you have a TradeKing brokerage account.

The TradeKing Community

The TradeKing community is well organized and well run. It features a blog and forum section where members can trade notes and ideas and learn from each other. Members can track recent trade activity and trade notes from those who are willing to share some insight as to why they made a trade.

Members can also join TradeKing community groups, which are organized and run by TradeKing members. There are quite a few groups, including those for beginning investors, options traders, and those who prefer to specialize in different types of investments including value stocks, penny stocks, ETF’s, hedge funds, dividend stocks, and various segments of the market such as automotive, biotech, or individual companies.

Customer Service

TradeKing has won several awards based on their customer service support, including the 2008 Smart Money Magazine award for best customer service in the online brokerage industry. TradeKing customers can contact the customer service department via Online Chat (Available 8am – 6pm EST, Monday - Friday); Email (service@tradeking.com), or telephone (877.495.5464). I haven’t had the need to contact customer service yet, but the reviews I have read are all good.

Other features

Maxit Tax Manager. TradeKing features the Maxit Tax Manager, a cost basis and tax reporting tool that tracks gains, losses, and other information to help you with your taxes.This tool makes it easy to monitor your monitor your realized and unrealized gains, identify wash sales, and calculate other potential tax implications.

Account Records. TradeKing maintains records for account holders, including trade confirmation reports, monthly or quarterly account statements, and tax documents such as 1099 forms.  Account records are stored online and can be downloaded into a .pdf format, or Quicken, Microsoft Money 2007, or Excel. The account records are nice beceause TradeKing charges for paper statements.

Conclusion

Overall, I think TradeKing offers great value and capability in a low cost, easy to use package. Based on my initial impressions and its award winning ways, I don’t hesitate to recommend TradeKing.

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