Saturday, December 21, 2013
Holiday Gifts from Fidelity and TD Ameritrade
Toys for online traders in options, stocks and ETFs.
Fidelity and TD Ameritrade have added a few holiday goodies for their electronic clientele over the last six weeks. Both firms enhanced their features for options traders, but stock and exchange-traded fund investors got a little something, too.
In a recent meeting with Barron’s, Ram Subramaniam, president of Fidelity‘s retail brokerage and cash management businesses, explains that updates to the firm’s services are all designed to add value in some way. For instance, the mutual-fund giant’s in-house order routing system has amped up price improvement to an average of $5.32 per 1,000 share order, for which traders pay a $7.95 commission. Over the course of 2013, Fidelity has offered 76 ETFs, provided by iShares and Fidelity, that can be traded commission-free (as long as they are held for at least 30 days).
Active traders at Fidelity utilizing their Active Trader Pro platform (activetraderpro.com, or launch from within the Fidelity Website) will be able to use new options analytic tools, which include idea generation and live scanning. There are a variety of pre-defined options scans built in to the active trading platform, but for now, to run a custom scan you have to use the tools at fidelity.com. A new probability calculator lets you evaluate a variety of potential trades, and a flexible profit and loss calculator enables a trader to create synthetic positions that show a potential trade’s effect on her overall portfolio.
Additional tools for Active Trader Pro users include a new multiple-order trade ticket, which allows you to cue up to 50 orders, which you can activate whenever you wish. These orders are stored on Fidelity’s server rather than on your local computer, so you can access them whether you are using the Web-based version of the active trading platform, or the downloadable software. Traders can choose whatever order-routing method they prefer, or default to Fidelity’s designated liquidity manager for access to a variety of routes, including dark pools.
For those who are shorting stock, the process of finding shares to borrow has become fully automated this fall at Fidelity, so you can sort through the shares available, and understand in advance what fees might be levied. An icon indicating a stock is hard to borrow makes those easy to spot. Previously you had to contact a human to short most stocks.
Education has been a point of emphasis for Fidelity. An initiative open to everyone, whether a Fidelity customer or not, is Fidelity Labs (fidelitylabs.com), which has an online investing game called “Beat the Benchmark.” The game, now in Beta test, challenges novice investors to allocate assets in ways that will outperform a randomly chosen benchmark. As players advance, competing to “beat the benchmark,” each new stage introduces additional tools and potential investments.
“We’ve known for years that gaming could play a part in helping investors learn, and could potentially lead to better investment outcomes. By developing a game based primarily on feedback from novice investors, our goal is to co-develop the future of online investing education,” says Sean Belka, senior vice president and director of the Fidelity Center for Applied Technology, via e-mail. Belka notes that consumers have been involved in the development process, and their feedback will be used for incremental improvements. Check it out.
TD Ameritrade has added several tools to its Website that allow clients to manage a variety of real-time tasks on a single screen. “My Dock,” the biggest of the enhancements, permits users to tailor their experience by choosing between different trading and investing modules. You can create up to four columns of streaming data, including balances, watch lists, and news. The new account-overview page displays balances and positions with additional room for market news and alerts. Making it easy to navigate anywhere on the site in one click is the new Rollover menu, which is a welcome touch for a site that was getting more and more complicated.
An enhanced order entry ticket, called SnapTicket, can be set up so that it is displayed wherever you are on the TD Ameritrade Website, allowing you to keep an eye on your open orders. The One Stop Search feature enables you to look for anything you might want on the Website—symbols, keywords, research features, etc.—from a single location. These are all welcome creature comforts.
Charles Schwab has announced an “accountability guarantee,” which refunds the fee you have paid for advisory services if you’re unhappy with the service received in the prior quarter. This guarantee applies to Schwab Managed Portfolios, Schwab Private Client and Managed Account Connection accounts managed by investment advisors affiliated with Charles Schwab & Co., Charles Schwab Investment Management, Windhaven Investment Management, and ThomasPartners. Program fees are typically a percentage of the assets in your account, and the guarantee is in place to make sure you’re getting value for your money.
Our 19th annual review of online brokers is in the works. What is working for you with your online broker, and what is driving you crazy? Let us know at email@example.com .
Published on Barron’s Online, December 16, 2013.