*Update: This TD Ameritade review has recently been updated to reflect their integration with thinkorswim. In order to access thinkorswim, new customers must apply for an account via TD Ameritrade.*
TD Ameritrade, the perennial top-tier online brokerage, has made some big moves in the past few years, and has recently received a boost from the acquisition and integration of thinkorswim, one of the best all-around trading platforms available to retail investors.
In this TD Ameritrade review, we’ll cover all the account basics like fees, commissions and tools, and take a close look at how the recent addition of the thinkorswim platform will have an effect on customers. By the end, hopefully you’ll have a better idea of whether or not they’re the right brokerage for your needs.
Pros - Personal service, easy to use, straightforward pricing, wide range of investments, thinkorswim platform, research from S&P and Morningstar Associates.
Cons - Price is on the high side at $9.99 per trade, expensive for broker assisted trades, margin rates are high.
Best For - TD Ameritrade appeals to a range of people, from beginner to professional traders. Outstanding for options trading. Long term investors and active traders alike will be pleasantly surprised with the range of investments, tools and research available. They make personal service a priority, and have proven themselves innovators in the space year after year. A very solid long-term choice.
Minimum To Open Account - $0
Special Offer: Join TD Ameritrade. Trade free for 60 days + Get up to $600
TD Ameritrade Review Continued…
Browser or Software/Mobile Apps - Browser, Software, iPhone, iPad, Android, Blackberry.
Before you ask, yes, thinkorswim does work on Macs (and even Linux).
Fees & Commissions
Options: $9.99 + $0.75 per contract
Mutual Funds: $49.99
Bonds: $25 for treasury bonds, net yield basis for all other bonds and CMOs
Broker Assisted: $44.99
Futures: $2.00 – $3.50 per contract (includes exchange fees)
Platform Fees: $0
Margin Rates: Base +1.25% to Base – 1.50%
*All stock trades are $9.99 regardless of order type and size, and the price stays the same during regular, pre and post market hours (I mention this because many brokers jack up the price based on order type and time conditions).
*If you’re an active trader, I’ve heard from several sources that it may be possible to negotiate for lower commissions once you prove high trading volume (I’m not quite sure what they consider “high volume”, so don’t quote me on this, but I’ve heard from a few sources that they will go down as low as $7 per trade for some customers). So it’s definitely worth asking if you are an active trader.
Long-term investors will be happy to know that TD Ameritrade offers a large (and continually growing) selection of no-fee ETFs. Plus, they’ll waive commissions if you hold the fund for 30 days or more.
Mutual Funds: YES
Fixed Income: YES
FOREX: 137 pairs
International Exchanges: YES (via live broker)
Access to IPOs: YES
With TD Ameritrade, the flexibility to mix investments is pretty much unparalleled. You can trade up to 8 option legs at a time, mix stocks, options and futures, trade futures options AND forex. One of the drawbacks, however, is that it’s expensive to trade on international exchanges (it’ll cost you $44.99 for live broker assisted trades).
Research & Tools
Free Live Streaming Quotes: YES
Breaking News: YES
Market Commentary: YES
Research Reports: YES
Market Analysis: YES
Trader Community: YES
Level II Quotes: YES
Tax Lot Selection: YES
TradeArchitect, their web-based platform, is intuitive and customizable, and has plenty of visual tools that are easy to use. I could go on and on trying to describe it, but check out the video (0:47) below to get a good idea for yourself instead.
For advanced traders, the thinkorswim software is a dream come true. It’s chock full of sophisticated professional-level tools. With thinkorswim, you get real-time streaming data, custom charting capabilities, and one-click trading. You can find trade ideas based on specific criteria, analyze potential trades with volatility and probability tools, test strategies, back test strategies, and make complex options trades easily. And yes, it will run on your Mac.
Market Motion Detector is a pretty nifty technical analysis tool that you can take advantage of if trading based on technical patterns is your thing. It analyses things like price change velocity and accelerations to help you spot short-term trends.
In addition to the different platforms, TD Ameritrade also allows you the ability to plug-in a wide range of third-party applications like automated trading, alerts and charting tools. You can see a full list of tools that plug-in on their website under partner tools.
Free Tutorials: YES
Free Webinars: YES
Free Live Workshops: YES
Options Trading: YES
Futures Trading: YES
Stock Trading: YES
Bond Trading: YES
Mutual Fund/ETFs: YES
TD Ameritrade’s knowledge center is broken up into 3 levels (Beginner, Advanced, and Expert). You can learn everything from basic investment planning to complex options strategies through tutorials, webcasts, courses and workshops. Plus, they offer free access to third-party publications like Enlightened Investor and thinkMoney Magazine.
24/7 Support: YES
Live Chat: YES
Branch Offices: YES
Wait times are short (and non-existent in most cases), customer service reps are friendly and very helpful, and all the major broker reviews give them top marks in this category. TD Ameritrade is a clear winner when it comes to service.
Types Of Accounts
Virtual Trading: YES
No Fee IRA: YES
Commentary In The News
Best For Options Traders (Barron’s 2011 & 2012)
Best For Long Term Investing (Barron’s 2011 & 2012)
Best For Novices (Barron’s 2012)
#1 For Banking Services (Smart Money 2012)
#1 For Trading Tools (Smart Money 2012)
#1 For Research (Smart Money 2012)
Kiplinger’s #1 Online Broker (Kiplinger’s 2011)
Best For Frequent Traders (Barron’s 2011)
Best Trade Experience (Barron’s 2011)
Best Range Of Offerings (Barron’s 2011)
Best Research Amenities (Barron’s 2011)
5/5 Stars For Trading Tools, Customer Service, and Mutual Funds and Investment Products (SmartMoney)
It’s definitely pretty interesting that the only reason TD Ameritrade wasn’t listed as the #1 overall broker by Barron’s last year (despite receiving top marks in 4 out of 8 categories), is that they only received 1.3 stars out of 5 for costs, and STILL received 4.5 stars (the highest overall rating awarded). TradeStation, Barron’s #1 pick, only beat out TD Ameritrade by 0.7 overall points. I think it’s pretty easy to assume they could have placed top of the pack if they lowered their $9.99 price tag a bit and maybe got rid of the large broker assisted fee (but hey, I could be wrong, who knows?)
Here’s what it boils down to: TD Ameritrade is a bit more expensive some of their direct competitors. But when you consider the range of investments, quality of tools (i.e. thinkorswim) & research, range of investments, ease of use, and customer service, it’s a hard brokerage to turn your back on. If you want my advice, I’d say open an account with TD Ameritrade as your main trading account so you have access to all the easy to use tools and research, but also get yourself a second account with a slightly cheaper brokerage like OptionsHouse or TradeKing if you’re hell-bent on cheap options commissions.
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Are you using TD Ameritrade to trade, or have you ever used them in the past? If so, please add your own TD Ameritrade review in the comments area below and let us know what you think.