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TD Ameritrade Review : What An Active Stock Trader Thinks

Charting software from TD Ameritrade** Must Read ** - Before you choose an online broker for trading, you must read this highly informative article Online Discount Broker Comparison Tips, to help you make a more informed choice.

Introduction

TD Ameritrade is an Online Discount Broker established since 1975. They charge low, flat-rate $9.99 commissions on all Internet equity trades, including stop and limit orders. They also provide access to powerful tools that help you make informed decisions and allow you to place trades with ease.

TD Ameritrade came about as a result of Ameritrade buying over TD Waterhouse, the stockbroking arm of Toronto Dominion. It was widely speculated that this "mega broker deal" was in response to an unsolicited takeover offer by one of Ameritrade's toughest competitor, E*TRADE. There has so far been minimal material impact on TD Ameritrade and its services and operations, especially in the market making sector of the stock trading business.

 

Comments on Commission Structure

TD Ameritrade is a very suitable broker for investors who are new to the markets and do not trade in and out of stocks very often. The commission structure for stocks is very cost effective for investors who have made up their mind about certain stocks and intend to purchase the stock "at one go" as it will cost only $9.99 in commissions whether one buys (or sells) 100 shares or 10000 shares. If you are the type that likes to "accumulate" shares in 100 share lots, then the commissions can add up substantially and what you may be looking for is a broker who charges on a per share basis like Interactive Brokers.

Robust Charting Software for Technical Analysis

TD Ameritrade offers basic level 1 quotes (i.e. bid, ask, last done, change) for FREE and this feed can be used by charting programs such as QuoteTracker to offer a robust real-time intraday and end-of-day charting solution. TD Ameritrade has bought over the excellent QuoteTracker charting and technical analysis software from Jerry Medved, which they now distribute free of charge to their customers. They've also sweetened the deal further by offering an expanded 20-day data backfill capability as compared to QuoteTracker's normal 10-day backfill. TD Ameritrade also offers a very reasonably priced Nasdaq level 2 quotes at $9.99 for investors who like to get a feel for the market depth for a particular stock.

Investment Choices

  • Stocks
  • Mutual Funds
  • Options
  • Exchange Traded Funds (ETFs)
  • Bonds

Commissions*

  • Internet - $9.99
  • Interactive Voice Response (IVR) Telephone System - $14.99
  • Broker Assisted
  • Market Orders - $24.99
  • Limit Orders - $29.99

Trading Tools

  • Ameritrade Streamer
  • Advanced Analyzer
  • Quotescope
  • Command Center Screen
  • SnapTicket
  • Trade Triggers

Conclusion

Casual investors are the target customers for a firm like TD Ameritrade. If however, you actively trade the markets, then a direct access broker like Interactive Brokers or MB Trading may be more suitable for you. A direct access broker gives you direct and instantaneous access to ECNs and market makers without going through a middle man, which may end up saving you money in the long run.

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