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Author: Dbinga Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 253543  
Subject: Online Broker of Choice Date: 3/25/2013 8:45 AM
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Currently Investing $4,000 personal and $16,000 rollover IRA

Based on my screens I should be making approximately 25 trades a year

What would be your broker of choice to minimize my friction / commission cost?

Currently I'm using Scottrade but at $7/trade friction is up to 4.3%

OptionHouse shows trades at $4

Interactive Brokers has trades at $1 but I see lots of hidden cost unless you’re trading a lot.

Just2Trade shows trades at $2.50 but I've heard lots of bad customer service reviews about them.


What are your thoughts? Thanks.
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Author: Smufty2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 242447 of 253543
Subject: Re: Online Broker of Choice Date: 3/25/2013 9:33 AM
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If you are willing to use the twice daily window trades at FolioFn, you have an unlimited number of trades for $290 per year or 1.45% friction.
https://www.folioinvesting.com/pricing/


Smufty

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Author: Rayvt Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 242450 of 253543
Subject: Re: Online Broker of Choice Date: 3/25/2013 11:59 AM
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IB is not good for a small or beginning investor. A few cents per share, but $1 min per trade and $10 min per month. Their trading platform is the opposite of simple to use.

OH is fine. They are geared for options, but do stocks just fine.

J2T is fine. Worst thing I've encountered is that inan IRA you can't use proceeds from a sale to buy until 3 days later. Everyplace else lets you buy the same day, you just better not sell what you bought within 3 days.

I have multiple accounts at each of these.

I've heard lots of bad customer service reviews [of various brokers]
Me too. But most of them are stupes complaining about penny stocks. Or newbies being a P.I.T.A. to the broker. The way they have commissions so low is that they automate everything and don't have a lot of people to hand-hold inexperienced people. When BrownCo was still around, they refused to take accounts unless you had 5 years experience.

---------------
25 trades a year is WAY too much trading for account sizes of $4K and $16K. You need to re-think what you're doing.

For 4K, I'd just put it in something like FCNTX until it grows larger

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Author: Sharkbait100 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 242451 of 253543
Subject: Re: Online Broker of Choice Date: 3/25/2013 12:10 PM
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You may want to look at Tradking. They recently merged with Zecco Trading (who I used) and offer $4.95 per trade.

Mike

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Author: GalleySlave One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 242452 of 253543
Subject: Re: Online Broker of Choice Date: 3/25/2013 12:29 PM
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Long ago (before 2000?) there was a link on these boards to a Friction calculator.
Entry items were something like: Cost per trade, trades per month, expected rate of return. It coughed up the Minimum Trade size to break even. Or something like that.

IIRC I was using Fidelity at $14/trade (not round trip) and the calculator came up with $4k per trade. Which is a useless figure (sorta) since I don't know what the entering arguments were.

I concur with other comments here regarding trade size. I suspect that trading less than $3-4k per stock/month means getting ground down by costs .. . even low costs. Unless it is 1999 and 1999. Which, in my case it was. So I got ground down by the market instead.

Good hunting !!

GS

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Author: waditude One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 242495 of 253543
Subject: Re: Online Broker of Choice Date: 3/29/2013 11:45 AM
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I have been using Sogotrade at $3 commission and am pleased in general.
One caution: One cannot place an order before the open and get the opening cross price, so one should not place market orders outside of trading hours. (I very seldom use market orders)

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Author: sumbawa Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 244279 of 253543
Subject: Re: Online Broker of Choice Date: 7/12/2013 8:13 PM
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Like smufty2, I am also a FOLIOfn customer, and have been for many years now. However that's due to the large-ish number of trades I do annually based on a newsletter I follow.

To offer a suggestion for dbinga's question, I would recommend FOLIOfn but only their basic plan, not the unlimited one. With the basic plan it's $4 per window trade (windows being at two times in a trading day). There's a $15/quarter service fee if 3 or less trades that quarter, but dbinga should meet that threshold. So 25 trades (if both buys and sells in this total) would be $100/year.

Like other posters, I would question doing a relatively high number of trades on the amount of capital detailed here. Personally I like to keep trading fees friction well below 1%.

I've found FOLIOfn to be a very well implemented platform. Any customer service experiences I've had have been excellent. They also offer a folio system, hence the name - their own form of mechanized investing, which I haven't used.

It's sobering to examine the effect fees in general have on portfolio growth in the long term. 1% or 2% might not sound like much, but the effects of compounding mean that over decades your end result is a lot less than it could have been.

I only came across this thread now, but the question of brokers and fees is perennial! Good luck with your investing.

sumabawa

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