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Just wondering if anybody is using Trademonster? The Bond Platform receives rave reviews with limit orders etc. If anyone has an opinion please feel free to fill us in. Don't want to transfer accounts if it's a total bust!
Thank you, john b.
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John,

I do not yet have an account with TradeMonster. I have only watched their demo per your ‘heads up’ that they might be a broker worth looking at. http://www.youtube.com/watch?v=JiLwPrHCShA Of the platforms I’m familiar with (Schwab’s, Fidelity’s, Scottrade’s, E*Trade’s, Zion Direct’s, TD AmeriTrade’s, and Interactive Brokers’), that offered by TradeMonster is clearly superior. However, at $15 per ticket, the costs to execute through them seem --at first glance-- to be a bit high. So these three questions would need to be answered.

QUES #1: Are you trading in a size that would overcome the costs?

ANS: A typical bond commish elsewhere is $1/bond, $8-$10 per ticket. On a 20-bond trade, an investor would be better off with TradeMonster. But Zions charges $9.95 per ticket. So you’d be better off there *if* commish were your only concern, and their search-engine is decent enough, plus it offers the ability to download the output of a search to Excel, which is where a lot of the analytical work is going to be happening anyway, not on the broker's platform. Also, these days, brokers who will execute bond trades for $1/bond without a minimum ticket-charge can be found.

QUES #1: Are you a skillful enough and/or patient enough trader that you’ll be able to buy under the ASK, thus mitigating TM's commish?

ANS: Let say --for the sake of argument-- that you’re trying to buy a single and that you’d like to split the spread. Purchase-minimums are set by the underlying desk actually holding the inventory. That desk is rarely is the broker through whom you’re executing, who is acting as agent, or in the case of shops like Scottrade, what amounts to agent and principal in the sense they don’t hold the inventory but do mark up by first buying the bonds and then passing them on to you at a higher price. Therefore, just because you bid at the ask doesn’t mean you’ll get a fill, and it is especially true that you probably won’t get a fill if you bid less than the ask. The underlying desks will sell (or not) as they please, and to whom they please (or not). On more than one occasion, I’ve bid at their price and at their purchase and have been ignored, because they suspected that if they delayed, the market would move higher and they could sell to someone else. This isn’t to say that pricing anomalies don’t occur throughout the trading day in which it’s possible to zip into the market and grab an odd lot that is fleetingly being priced under the prevailing national best. TraderMonster’s platform would seem to be well suited to monitoring prices and grabbing bargains.

QUES #3: How much are you willing to pay for ease and convenience of execution?

ANS: It is only idiots like John Bogle and his ilk who obsess over the impact of commissions/ mutual fund expenses, because they have nothing else worth saying. A serious investor/trader will pay whatever she/she has to in order to obtain what really matters, which is an ‘edge’ and greater total profitability than would otherwise be obtained. Part of the reason why so few investors buy their own bonds is that the process is difficult and messy. If TradeMonster’s platform makes bond investing doable for someone who would like to become serious about bond investing, then TM’s per ticket fee is cheap enough, and intended holding-periods are typically long enough that the slight premium over competitors could be easily amortized.

The ‘bottom line’ --as always-- with regard to selecting a broker is this. Who gives FF if the broker is well or poorly rated *if* the broker offers the would-be customer the tools he/she needs to conduct business efficiently and effectively? You choose for yourself the brokers who will the jobs you need doing, and you don't worry about what others think. You run your own tests and trials, and you make a decision on that basis, not on hearsay or on third-party reviews (such as this one. LOL)

Thank you again for posting the 'heads-up' about TraderMonster. They are a broker I overlooked, which is a failing I'll correct today.

Charlie
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Corrections/additions:

TM’s bond commish is $15 per ticket *plus* a buck a bond. That’s expensive if you aren’t trading size.

TM’s stock commish is $7.50 per ticket, or not much worse that what Scottrade charges, or what can be negotiated at E*Trade or TD AmeriTrade if you just ask. However, that is expensive if you aren’t trading size. E.g., IB will execute at $0.005/share ($1 min per ticket), and plenty of brokers offer similar rates.

TM’s margin-rates suck majorly (about 475bps over IB’s rate), not that I often trade on margin. But I hate brokers who gouge.

ARRGH. I really like the look of TM’s bond platform and would like to run some serious test and trials. ARRGH. I HATE setting up brokerage accounts. But I don’t see that I can avoid it if I intend to remain efficient.
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I just discovered it's possible to set up a paper trading account. https://www.trademonster.com/am/GettingStarted.action#1

I won't be reporting on what I find, but I'd urge you to poke around. TradeMonster is doing some things with bonds that are worth looking into.
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This is getting to be too funny.

Their paper trading account won't let you see their bond platform. For that, you have to set up an actual account. However, as an account rep told me on the phone (quickly answered), there's no rush to fund the account, meaning, you could demo their bond platform and then (though he didn't say it) back away.

I demoed the stock side of their platform and scalped a quick $0.06 cents/share on SPY. So I know that side of their platform is intuitively easy to use (compared to the real mess that SpeedTrader's platform is, which I've also been testing).
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Issue TM ET

Tesako 100(5) 100(3)
Hudbay quoted no ask
Verso same same
TC 84.257(2) 84.237(1)
Vulcan's 7.15's quoted no ask
AMD's '22s 98.25(10) 98.25(10),99(5)
TPORT 95.25(5) 95(10)
WEN 99.8(5) 99(10), 99.8(1)
Colt same same


The previous is only the briefest of quote comparisons between E*Trade and TradeMonster. But if I had to say 'Yea' or 'Nay' right this minute, I'd say to throw some of your bond business their way, especially if you aren't grandfathered at ET into the better version of their bond platform.

I hammered on TradeMonster as I hard as I could and found no problems. Their customer service is good. An account takes just 3 minutes to set up. Their trading platform is intuitive. Their quote servers are fast. Everything about them says 'PROFESSIONAL'. Obviously, your own experience might be different. But I really believe even a newbie wouldn't be overwhelmed by what he/she encountered.

John, once again. "Thanks" for calling the community's attention to this broker.

Charlie
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Charlie, thanks for your complete critique and "road test" of Trademonster.
Happy to bring it to the boards attention. Again thanks for your opinion.
john b.
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Don't want to transfer accounts if it's a total bust!

John,

I notice that TM will rebate account transfer fees. The exit fee is $50 ($20 for an IRA). As to whether you --or anyone else-- should open an account with them for the specific purpose of investing/trading bonds is impossible to say, because people's needs and skills vary so widely.

Some poking around on the web turned up some customer-service horror stories that seem to have the usual distribution. About one-third are from the usual idiots who'd screw up a fast food order for themselves, never mind executing legal contracts which they obviously failed to read and whose terms they violated. Another third are obviously lying about what really happened. But some complaints about TM's clearing house, Apex, does raise genuine concerns. For this reason, I wouldn't dump a lot of money/assets into TM, as opposed to parking it/them with more major brokers known to be reliable.

Also, with bond investing/trading, the ever-present distinction between 'analysis' and 'execution' has be kept in mind. Is TM a good place do bond analysis? Is TM a good place to do bond executions? Both of those remain to be proven. All I did --so far-- is not find any obvious warning flags. Their platform is 'clean', and I like the watchlist capability. But how many bond trades I actually execute through them is a whole 'nother matter. I'd never use them for stocks or funds. For futures, they might not be bad. For doing options analysis, they seem to be very good (though not as good as IB for executions). Etc. Etc.

No broker does everything well. But TradeMonster is a fun shop I look forward to exploring.

Charlie
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More followup on TradeMonster.

Their backoffice is excellent. Confirmations via email are prompt. Setting up ACH funding took merely a single day. That's a very professional shop.
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