Scottrade Review



Scottrade were initially created as a traditional brokerage house in 1981 by their current CEO Roger O. Riney. They’ve gone on to become one of the best known discount brokers in the USA.

They operate in the top tier of discount brokers, ranking alongside the likes of TD Ameritrade and E*TRADE offering a full range of financial services through a network of 580 local branches including banking and brokerage services.

Their advertised commissions are lower than most of their closest rivals but they’re still not the cheapest broker around. Smaller brokers like OptionsHouse are considerably cheaper, but can they compete when it comes to platform and services?

 

Fees & Commissions

Stock Trades Options Base Per Contract Min Deposit Broker Assisted Mutual Funds
$7.00 $7.00 $1.25 $500 $27.00 $17.00

 Account Sign-up

Signing up for an account with Scottrade was easy enough; it took a little over 12 minutes which is about average for an online broker these days. The forms are pretty clear and easy to complete and the questions concise.

There’s no need to print off and sign the documents or send off copies of your identification as it can all be completed online. You can of course call into your local branch to do all this but it’s really not necessary.

Trading Platform

Scottrade ELITE

 

As most top end brokers do these days Scottrade offer a number of different trading platforms to their clients depending on their experience and average trade size.

This is actually a good idea because a smaller trader who trades part time with limited funds needs a completely different set of tools than a more experienced options trader.

First up comes the basic Web Trading account, this is an entry level web based platform perfect for beginners or smaller traders with around $2000 invested. It has all the basic trading tools covered and is pretty simple to use.

Next up is the Scottrader® platform; this is a downloadable platform that you can personalize to your own liking. It also comes with live streaming quotes and a number of other more advanced tools. It’s ideal for an intermediate trader with a larger account size of say $10,000.

Then comes ScottradeELITE®, this is for the more advanced traders amongst you, available as a free download to clients with a balance in excess of $25,000, it gives you access to professional style tools and in depth analysis.

Finally there’s the OptionsFirst® platform which as the name suggests is for serious options trading. Available to all account holders as a free download, it’s a good options platform with some excellent tools available. It’s a good idea to have a separate options platform as options traders have a unique set of requirements which most other types of investors are unlikely to use.

Pros

  • No inactivity, account maintenance or hidden fees
  • No-fee IRAs
  • One of the highest customer satisfaction ratings according to JD Power and Associates
  • 500+ local branches
  • Great support for beginner investors with massive amount of educational resources
  • Online user community
  • Only $500 minimum to open account
  • Free real-time streaming quotes and charts
  • Free dividend reinvestment for mutual funds (but not for stocks)

Cons

  • Additional 0.5% of the principal value commission for stocks under $1
  • No dividend reinvestment option for Stocks and ETFs

 Summary

Would I recommend Scottrade? Yes I would, they offer a full range of services to all levels of traders from beginners to advanced options traders. Unlike other brokers they don’t try to do this from one platform.

They sensibly offer four platforms depending on your style, strategy and experience. Yes the full ScottradeELITE® platform is only available to traders with $25,000 or more, but the other platforms are plenty good enough for smaller accounts.

Add to that they have an excellent trading community, with plenty of experienced traders willing to share strategy tips and advice and you have a very accomplished broker offering services which are hard to beat.

Are there any downsides? Well they are a little expensive, but still considerably cheaper than E*TRADE or Charles Schwab who are similar sized brokers. Customer service is not up to the standard of some of the smaller brokers, they have a habit of treating you a bit like a number. But these are small complaints; overall they’re a very accomplished broker with a good reputation and an excellent trading platform.




Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright 2008 - 2011 - howtotradestocks.org - All Rights Reserved

Discount Stock Brokers | Compare Online Brokers | Penny Stock Brokers | Sitemap | Privacy/Affiliate