Is Scottrade Right For You? What Novice Traders Must Know...
Scottrade is one of the original online discount retail brokerage firms which earned tremendous popularity in the bull market of the late '90s. It was founded in 1980 and is headquartered in St. Louis, Missouri, with it's main business emphasis being stock brokerage and enabling online investing of stocks, mutual funds, IRAs, CDs, fixed income, etc. It has a huge presence in the continental US with 422 local branch offices. It's popularity among investors is still very strong, as attested by it's recent No.1 ranking in investor satisfaction with online investing services for the eighth time since 2001 (according to J. D. Power and Associates). Scottrade's main competitors in the discount brokerage industry include: E*TRADE, TD Ameritrade, Fidelity Investments and Charles Schwab.
Scottrade has a number of ways for their customers to trade, based on the level of expertise, mobility and ease of use. These include:
- Scottrade Trading Web Site Order Interface
- Scottrade Streaming Quotes
- Scottrade Options First
- Scottrade Mobile
- Broker-Assisted Trading
- Touchtone Trading
It's most advanced trading platform is ScottradeELITE, which is built especially for more active traders and is available for free to customers who maintain a minimum account value of $25,000. ScottradeELITE launches from the trader's desktop and offers complimentary Dow Jones News, Comtex News, trading order interface, advanced charting capabilities, technical analysis and integrated Level II Quotes and market depth. ScottradeELITE also offers NASDAQ TotalView, which shows every bid and offer for all market participants, allowing their customers to make better trading decisions, more quickly. Note that there may be charges levied for the use of Level II and NASDAQ TotalView. You can get Level II for free if you execute 10 trades or more per month, otherwise, a fee of $10/month applies. One of the advantages of Scotrade Elite is it's ability to run behind corporate firewalls. Some investors who work at full-time day jobs have reported being able to run Scottrade Elite behind their company's firewall while other programs like Tradestation and other direct-access platforms are blocked.
Technical Analysis Charting Software
For customers who don't have access to Scottrade Elite, 3rd party frontend charting software like Quotetracker are available to provide better technical analysis capabilities with Scottrade's free Level I datafeed and backfill for customers. For Scottrade Elite customers, one of the best features is free access to Trade Ideas, a real-time pattern recognition scanner worth about $60/month. Trade Ideas enables a trader to scan through thousands of stocks that are traded in the US markets, in order to find actionable trading opportunities based on preset technical criteria. There is also a backtesting tool available, which scans historical data using your pre-configured strategy, to enable you to see if your system would have made money or not. If more sophisticated pattern recognition is required, check out TradeSolutions, a neural network and artificial intelligence market scanning program. Also check out Best Technical Analysis Programs for other alternatives to help you make a more informed trading decision.
Any modern computer or laptop with a Pentium 4, Core 2 Duo or better CPU with 1 GB (or more) of RAM can handily run Scottrade Elite and any other Scottrade trading platforms without any problems. Refer to How to Choose a Stock Trading PC and How to Choose Laptop for Stock Trading for more information about computer hardware specifications required for active high volume traders.
Brokerage Fees & Commissions
Scottrade charges $7 per side (sometimes a few cents more). No inactivity fees. No upselling. No fee to withdraw money or close your account. Limit orders cost the same as market orders: $7 per trade or $14 rt for unlimited size. If you trade decent size, this is a great deal as compared to brokers with per share pricing. Read Online Discount Broker - Comparison Tips to better understand how the different types of commissions affect your costs. Level II is free for 10 trades per month, or $10/month.
The customer service at Scottrade consistently gets high marks from many satisfied traders and investors. Many traders have reported of how service staff take as much time as necessary to help whenever a customer calls with a question. Another testament to their great service is how Scottrade manages to rank No.1 in investor satisfaction with online investing services for the eighth time since 2001. Scottrade's main contact number in the US is (800)619-SAVE and they will re-direct to the branch closest to you.
Scottrade is a great brokerage for the stock market swing trader and the retail buy and hold investor. If you are an active daytrader or investor requiring more advanced strategies such as hedging using index futures or "writing" put and call options, then a direct access broker like optionsXpress or Interactivebrokers may offer more complete services for you.