HOME | POLITICS | SPORTS | LIFE | SCI/TECH | OPEDS | HELPFUL TIPS
|
Jan. 13, 2005 After a few quiet years, the discount broker wars seem to be starting afresh. During the Internet bubble, companies such as E-Trade were the rage, with clever commercials and trading commissions that seemed too good to be true. The fallout from the bursting of the Internet bubble seemed to take some of the air out of these discount brokers, but things seem to be picking up again. One very welcome announcement was made at the turn of the year by Scottrade, who is now offering limit trades at just $7 a pop. Most discount brokers tout rates that sound good until you read the fine print and find out that the rate applies only to market trades, not limit trades. Scottrade is raising the bar; it will be interesting to see how many others step up to challenge them. Charles Schwab is reportedly preparing some new maneuvers as the company’s namesake steps back into the traces, and E-Trade is getting ready to make a run again after a few down years. As we enter the 2005 year, Scottrade stands out as the best of the mainline discount brokers for a variety of reasons. Sure, some of the other discount brokers offer enticing bait such as “25 free trades” for signing up, or getting a friend to sign up, but read the fine print. Often all of those trades have to be made within 30 days or you lose them. Looking at the fine print is a requisite when it comes to dealing with the discount brokers. And when you do, Scottrade really stands out. Let’s compare Scottrade with another national discount player, TD Waterhouse. Scottrade wins hands-down on the price per trade; TD Waterhouse’s limit trades run in the $20 range (a bit lower if you have a huge account). Scottrade has a good physical footprint (local outlet) that is comparable to TD Waterhouse and seems to be coming on as TD Waterhouse draws back. For example, in the Boise market TD Waterhouse just closed shop, while Scottrade just opened an office. For online trading, TD Waterhouse offers a two-digit entry tool, while Scottrade’s is multi-digit. Why does this matter? It matters a lot if you are trying to come in just a half a cent above the current bid. It also matters a lot if you are investing in microcap stocks, where those fractional cents can make the difference between securing a trade or not getting a buy – or sale. Finally, TD Waterhouse has a non-activity charge while Scottrade does not. That is, if you don’t happen to make a trade during a certain time frame, TD Waterhouse hits your account with a charge – something like $25. This can sour a person on staying with the fund. And it can also come as a surprise to a new player. Recommend TD Waterhouse to a friend and then have them get hit with an inactivity fee a few months later – a bummer for everyone but TD. Scottrade has upped the ante this year and it could get quite competitive in the discount broker arena in the near future. This only serves to help the investor as trading costs drop ever lower to commoditize this field. ------------ About the author: Dwayne Hines currently has 12 books selling in major bookstores and writes for major magazines such as Physical and FitnessRX. Six-Pack Abs in 60 Days, written by Robert Kennedy and myself (Dwayne Hines II). Email: dhines@3dinet.com Tell a friend about this site! ------------ All articles are EXCLUSIVE to Useless-Knowledge.com and are not allowed to be posted on other websites. ARTICLE THIEVES WILL BE PROSECUTED! |
||||||
|
|
|||||||
|
