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Saturday, March 03, 2007

Rankings -- Web-based Brokers

I studied 14 software-based brokers and 15 web-based brokers.  Full details available in the March 5, 2007 issue of Barron’s.  I hope to publish extended notes on each offering throughout the week. 

There is so much behind each item in this list (see the details on how the rankings were generated, published here last Saturday in “How To Be an Award-Winning Online Broker") that I feel a focus on the totals is very misleading.  Still, that’s where the attention seems to go, so here’s the list: 

1.  TD Ameritrade—4 stars, 32.1 points
2.  optionsXpress—4 stars, 32.0 points
3.  Fidelity—4 stars, 31.5 points
4.  Muriel Siebert—4 stars, 31.3 points
5.  TradeKing—4 stars, 30.2 points
6.  E*Trade—3.5 stars, 29.5 points
7.  Schwab—3.5 stars, 27.9 points
8.  OptionsHouse—3.5 stars, 27.3 points
9.  Scottrade—3.5 stars, 27.2 points
10. Firstrade—3 stars, 25 points
11. WellsTrade (Wells Fargo Investments)—3 stars, 24.6 points
12. SogoInvest—2.5 stars, 21.2 points
13. Banc of America Investment Services—2.5 stars, 21 points
14. Just2Trade.com—2 stars, 17.9 points
15. Zecco—2 stars, 17.3 points

Posted by twcarey on 03/03 at 04:01 AM
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Rankings -- Software-based Brokers

I studied 14 software-based brokers and 15 web-based brokers.  Full details available in the March 5, 2007 issue of Barron’s.  I hope to publish extended notes on each offering throughout the week. 

There is so much behind each item in this list (see the details on how the rankings were generated, published here last Saturday in “How To Be an Award-Winning Online Broker") that I feel a focus on the totals is very misleading.  Still, that’s where the attention seems to go, so here’s the list: 

The point totals are weighted for software-based brokers, as detailed in the “How To” article above.

1.  Thinkorswim—4 1/2 stars, 35.8 points
2.  Interactive Brokers—4 1/2 stars, 35.1 points
3.  MB Trading—4 1/2 stars, 35.6 points
4.  TradeStation Securities—4 stars, 33.5 points
5.  Fidelity Active Trader Pro—4 stars, 31.2 points
6.  ChoiceTrade—4 stars, 31 points
7.  CyberTrader—4 stars, 30.5 points
8.  E*Trade Pro—4 stars, 29.7 points
9.  Terra Nova Financial—3 1/2 stars, 29.2 points
10. Lightspeed Professional Trading—3 1/2 stars, 28.5 points
11. ScottradeELITE—3 1/2 stars, 28.1 points
12. Fimat Preferred Trade—3 1/2 stars, 28 points
13. MasterTrader.com—3 1/2 stars, 27.5 points
14. SogoElite—2 1/2 stars, 21.3 points

If I do a straight sum for these brokers, using the same point scheme as I used for the web-based brokers, the top five brokers overall would be software-based.  Six of the bottom seven are web-based.  The flexible, customizable, streaming tools are happening via software these days. 

Posted by twcarey on 03/03 at 04:00 AM
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The Envelope, Please

EVERY YEAR AT THIS TIME, customers of online brokerages take note of an unusual phenomenon: the arrival of new tools and upgraded services. It doesn’t seem like a random event. Some suspect it’s related to the approach of Barron’s annual ranking of the brokers—a little like the last-minute primping that precedes the Oscars.

Whatever the reason, here are some of the big changes that just happened to roll out in February.

E*TRADE (http://www.etrade.com) launched a Global Trading platform on Feb. 20. The goal of the new platform is to give U.S.-based customers access to six foreign markets, and give them the opportunity trade in multiple currencies as well. The six markets in the platform’s debut are Canada, Hong Kong, the U.K., France, Germany and Japan. Ultimately, E*Trade plans to give customers access to 42 exchanges.

Says Michael Curcio, a managing director at E*Trade Financial, “With European stocks making huge gains, investors are seeking opportunities abroad, as evidenced by the $150 billion investors pumped into international stock mutual funds in 2006. We see continued momentum around international investing as a result.”

A customer has to create another account with E*Trade to access the new platform, but it’s designed to be linked to the dollar-based accounts. Customers can trade funds into the global account from a U.S. account, then buy the currency desired for an international transaction.

WELLSTRADE, Wells Fargo Bank’s online brokerage (http://www.wellsfargo.com), announced on Feb. 13 that it would widen its free trading program to include clients who have $25,000 and up in their relationship accounts. Previously, the minimum was $250,000. Any combination of brokerage, deposit accounts, home equity and car loans, or even 10% of a mortgage counts toward the minimum. Those who qualify are allowed 100 free trades per year for stocks and no-load mutual funds.

To qualify for 100 free online trades, customers link their WellsTrade account to a Wells Fargo Portfolio Management Account. This package combines all banking and brokerage-account information into a single statement for easier management.

“You don’t have to be a millionaire to be treated like one,” says Rachel Perkel, senior vice president of brokerage-client solutions at Wells Fargo Investments. “When a client has a broad relationship with us, they have a single sign-on at WF.com and can easily move money between bank and brokerage.”

THINKORSWIM (http://www.thinkorswim.com), last year’s co-winner in the software-based brokers ranking, has released 12 software upgrades in the last year, says president Tom Sosnoff. The most recent in late January includes an upgrade to charting functionality, plus ways to bypass corporate firewalls when logging in to the thinkorswim servers. The platform now features a live audio broadcast that goes on throughout the day, in which one of the firm’s top traders talks about various opportunities.

Among the new features are expanded beta-weighting tools, as well as volatility models, which can help options traders find profitable trades. “We have eliminated virtually every vendor component dependency, so we’re producing all our software in-house. We’ve introduced industry firsts such as streaming audio, integrated education and theoretical pricing tools,” says Sosnoff. The firm has also rolled out an improved Web-based platform that includes 300 enhancements.

MB TRADING (http://www.mbtrading.com), last year’s other software winner, has started offering direct access to foreign-exchange and electronic-communication network technology. “This introduces new customers to MBT and offers existing customers new opportunities,” says David Lipsett, executive vice president. Lipsett also says that the firm catered in the past to active traders but has begun focusing on occasional participants, offering them improved technology and better support than they’ve typically received.

TD AMERITRADE (http://www.tdameritrade.com) just announced enhanced order types, including those of a contingent variety—meaning that a client is able to, say, automatically buy a stock when it hits a certain level and then sell it at a pre-arranged price, with many variants. Customers can expect enhanced bond offerings, as well as improvements to its active-trader tools.

SO WHO ARE the best online brokers? Check back next week.

Published in Barron’s, February 26, 2007

Posted by twcarey on 03/03 at 12:01 AM
Published in Barron'sAnnual Broker ReviewPermalink
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