They advertise $8 per trade + $1.75 per contract. Are there no monthly fees? Has anyone ever dealt with them before? It seems like a pretty sweet deal.
I’ve had three trading accounts for about two years now-
an Ameritrade for equity trades, Fidelity for my brokerage account(IRA) and a online mutual fund trading account.
Of the three, I like the service I get from Fidelity the best. Ameritrade and all the other online trade sites are “discount” brokers. This means that the service is provided cheaply, but you get what you pay for. With a full-service broker, you have access to research, a good customer service rep, and if your account gets big enough, you can even get a relationship manager or dedicated account rep. Trades on Ameritrade are $8 apiece, but that’s only for market orders, not limit or stop, which means if you put in a bid for 100 shares of XYZ Corp., a market order will get it at the market price. With the other two types, you can designate the size of the piece and the bid or buy price. With a full-service brokerage, the trades are higher, but all the same price. I get charged $25 flat for all three orders.
In conclusion, it’s what’s important to you. If you don’t need frills and the things a full-service brokerage provides, go for a discount broker. Having said that, if the market corrects, the bigger houses, being more established, generally take care of their people better. You can generally get your Fidelity of Merrill rep on the line in a market dip, whereas the discount houses might have a longer dwell time.
If you want to do some long-term investing, check out Buy and Hold. They provide decent service for people who want to buy chunks of equity and hold on to it for a long time.