Brokerage Review: TradeKing – Ally Invest


14 February,2012

One of the most popular online brokers is TradeKing, which on 2017 transformed to Ally Invest, and it’s not hard to see why. They offer inexpensive trades, as well as a variety of account and investment options and research tools that can help you make more informed investment decisions.

Account Options

TradeKing offers you a number of account options including individual, joint and custodial. You can also open an account that transfers on death, which is a bonus, since some brokers don’t offer this option, and your death can trigger time-consuming and expensive probate proceedings. The transfer on death option is nice for your heirs.

Other types of accounts available include:

  • Corporate
  • Sole Proprietorship
  • Partnership or LLC
  • Trust
  • Investment club
  • IRAs (traditional, Roth, SIMPLE, rollover)
  • SEP
  • Coverdell

Additionally, you can trade a number of different investments. They offer stocks and ETFs, as well as options (including short options). You can invest in mutual funds, bonds and CDs.

All of these investment opportunities mean that even sophisticated traders can make use of having an account. At the same time, a TradeKing account is easy to use, with an investor-friendly interface that even novices can use.

Fees and Commissions

All brokers have fees and commissions that need to be paid. However, TradeKing’s costs are relatively low, and in line with industry averages. Stocks and ETFs priced at more than $1 trade for $4.95 apiece. (You do pay a premium of one cent per share on your entire order of stocks priced at less than $1.) If you decide to trade options, you can do so at $4.95 plus 65 cents per contract, up to eight contracts. When you trade more than eight contracts, the price is $8.95 per contract, plus a 15-cent fee.

You can trade multiple legs, and your fee will be assessed one base price, either $4.95 or $8.95, depending on how many contracts you are trading. Short options, though, come with no charge, when they are valued at five cents or less.

The mutual fund trading fee is fairly low when compared with other brokers, at $9.95. Bonds trade for $4.95 per bond, and there is a $14.95 minimum. CD transactions cost $24.95 apiece, and Treasuries cost $24.95 per transaction. It might be worth it to open your own TreasuryDirect account if you plan to invest much in Treasuries.

Realize, though, that you will be charged an inactivity fee. It’s rare to be charged a fee, though, because you have to meet both of the following conditions:

  1. No commission-charged trades executed during the previous 12 months.
  2. You have less than $2,500 in a combined account value for your household.

If you meet those two conditions, you will be charged a $50 annual fee. If you decide to open an account, you should make it a point to engage in at least one transaction a year, or have the minimum in the account to avoid the fee.

Opening an Account

It is fairly easy to open an account. They recently updated the process, and it can be completed in 10-15 minutes for most people. You have a number of funding options with the account, although the most common is likely to be the ACH transfer. (There are other options, but they will cost you). It is worth noting, though, that there is no account minimum — you can open an account with $0.

You will need to complete your ACH setup by sending in a copy of your photo ID, as well a voided bank check. However, this process can be speeded along because it’s possible to scan and email these documents, or fax them. You can also mail them in, but it takes much longer. (Note that when you open your account on the web site, the email option may not be visible to you. However, when they send your welcome email, the option is presented there). Once you get everything set up, and this can take two to four days, you are ready to trade.

Research Tools and Community

TradeKing is well-known for its trading and research tools, as well as for its active community. Barron’s has rated their platform highly, so you know that it is easy to use. You have a number of options, including the ability to place a stop loss on your order. It is compatible with iPhone, as well as other smart phones, so you can download the app and trade from anywhere.

They offer a stock screener and an option screener to help you find interesting investments that fit certain criteria. You can also use the MarketGrader Research Reports to learn more about high quality stocks, and check into Technical Analysis Tools to help you better understand pricing action. TradeKing LIVE, the latest platform option, lets you see account information, news and charts while you make your decisions, and works with a flexible trade ticket so it’s easy to switch between investment choices.

Other helpful tools include the Maxit Tax Manager, which helps you keep track of tax information related to your account, as well as a Profit and Loss Calculator. The Probability Calculator can also help you make better decisions and get an idea of how you can expect an investment to perform.

The TradeKing community is also a great research tool. The community is active, and members are always willing to help. You can compare your performance to others’, as well as get great trading ideas. The community is educational, although you do need to take what you learn with a grain of salt.

Bottom Line

TradeKing is among the best online brokers for a reason. The interface is easy to use, and you can take advantage of advanced trading tools. You have the ability to consult experts and TradeKing community members if you get stuck. Beginning traders can benefit from the low costs and easy-to-understand platform. Advanced traders can benefit from the advanced analysis tools, as well as the wide variety of investment opportunities and options.

With its low costs and powerful platform and tools, TradeKing can be a good choice for any trader.

CLICK HERE to visit TradeKing/Ally Invest and see Current Promotions