TradeKing vs Scottrade – Online Stock Trading Comparison

Many people asked for more of these online stock trading comparisons so here’s one on TradeKing and Scottrade.  Personally, I feel all these stock brokers are becoming more and more alike so it’s becoming harder and harder to compete without price.  Here are some of the difference I found with the two brokers.

Trading Commissions Comparison

tradeking

scottrade

Equity Trades

  • – $4.95 a trade, broker assisted trade is also $4.95.
  • Scottrade – $7 a trade, $17 for touch tone phone system and $27 for broker assisted trades.

Options Trades

  • TradeKing – $4.95 + $0.65 per contract
  • Scottrade – $7 + $1.25 per contract

Clearly, TradeKing is lower priced for trading.

Mutual Funds

  • TradeKing vs Scottrade – $14.95 vs $17

Margin Fees Schedule

Scottrade and TradeKing margin interest respectively

  • $0 – $9,999 – 7.75% vs 6.50%
  • $10,000 – $24,999 – 6.50% vs 7.50%
  • $25,000 – $49,999 – 6.50% vs 7.25%
  • $50,000 – $99,999 – 5.50% vs 6.75%

The list goes on but across the board, TradeKing is much cheaper to trade with.

So Is TradeKing Just Better in Every Way?

On the surface, is cheaper and offers pretty much the same product as Scottrade.  However, the latter offers what it calls the Scottrader and the Scottrade Elite programs.  These programs are for high volume traders who are used to the proprietary trading platforms of the old days before the web.  As far as I can tell, the great part about using those platforms are:

  • that you can save the environment you are on so all the screens are at the same place every time you log in.
  • information is pushed to you.  In other words, the prices, news are updated automatically since of you needing to push the refresh button on your browser.

For those that will only trade with those platforms, then by all means but for the rest of us, the online versions are good enough.  In that regard, I would go with TradeKing.

Update: A reader alerted me that TradeKing is offering to reimbursed you for up to $150 in termination fees for anyone that switches over to them.

Update #2: Another reader is quick to point out that Scottrade also offers something similar as well, only that it’s up to $100.

To Sign Up for Scottrade, Click Here

{ 20 comments… read them below or add one }

Amber June 6, 2009 at 1:46 pm

I am a Scottrade customer and currently testing TradeKing for my needs. I never used those platforms so other than getting used to the new interfaces, the two are very similar.

Of course, the reason why I’m thinking of changing is the slightly lower trading commissions which add up over time.

Give it another week and if there are still no problems, I will switch and take advantage of the reimbursement.

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Deryl July 1, 2009 at 12:37 pm

So…
Who was the winner, Tradeking or Scottrade? I am looking at both. Tradeking uses Recognia for their pattern recognition software, did you compare that with Scottrade’s Elite system?

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Matt B October 28, 2010 at 11:03 pm

ELTC4930 FREE 3 trades on Scottrade (maximum promotional code)

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Free Polazzo July 12, 2009 at 1:00 pm

Amber,

Thanks for your opionion on Scottrader v. Trade King.

Did you have any problems with Trade King when you switched over?

Thanks,

Free

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Brian October 10, 2009 at 2:37 pm

I’ve used Tradeking and Scottrade for years. Tradeking is slightly cheaper for trades but their customer service is TERRIBLE. My experience is that they are the ghetto of investing. Want to talk to unhappy company reps who try to get you off the phone as quickly as possible, with a crappy attitude. Want to get 5 different answers to the same question with no resolution? Want to waste hours/days of your life with morons when you could be making money (thanks Randy Grossman | Tradeking Supervisor – Customer Identification Program)?

Tradeking does NOT care about its customers. Scottrade bends over backwards for their customers and treat even smaller accounts like “Kings”. Do you want to create a long term relationship and be valued or do you want to save a couple dollars?

Once again, this is just my experience from more than 10 years with Scottrade and more than 5 years with Tradeking (I recently moved everything to Scottrade).

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Investing School October 10, 2009 at 2:52 pm

Thanks for the good info and it highlights that everyone definitely have their own opinion and experiences with each stock broker. It’s interesting that you are having such a terrible experience with TradeKing when most people love their customer service. Could you give us any specific examples so we can all benefit from your experience?

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Jay December 1, 2009 at 4:57 am

I am a thinking of taking a slow moving mutual fund investment of 8K and trying to make something happen on my own. I am in the process of trying to learn a bit about online brokerring. Anyone have any advice for me?

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Frank December 28, 2009 at 7:47 pm

The major difference between scottrade and tradeking is that scottrade DOES NOT offer dividend reinvestment on stocks, but do for mutual funds. Tradeking does offer dividend reinvestment

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Scott Fenton March 25, 2010 at 12:35 pm

I just want to repeat, but here in another format, that there are big problems with Scottrade. It might seem like you are only paying $7 a trade, but because of various self-serving undocumented algorithms the market makers who actually do your trades and *pay* Scottrade for, you will not get best execution.

I had a limit order with Scottrade for an NYSE listed security. After the NYSE opened, the security dropped below my limit bid, then the *offer* for the security dropped below my bid, but still Scottrade did not fill me. Why? Because their “policy,” though they admitted that it is documented nowhere, is to only fill after a security first trades on the NYSE. This allows their market maker to trade ahead of you and use your trade as insurance.

The other problem with this is that more and more securities are traded off the listed market, in many cases most of their daily volume is off the listed exchange.

I have a formal complaint filed with FINRA, but FINRA is just made up of the brokerage firms, so one has very little voice.

Best to avoid this very poor brokerage choice. The commission might have been $7, but they just lost $618 of my dollars. Not much of a bargain.

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Yo Gabba July 16, 2010 at 2:45 pm

They all do this, this is how they brokerages make their money. You are only there for cushion in case they fall down. Even the bigger brokerages that you larger fees will do it should it benefit them, and rest assured Trade King probably does the same thing.

FYI: On Scottrade, the window that pops up when you set a buy/sell limit tells you that you have no guarantee that a trade will execute…so in essence they have warned you.

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S Brooks April 6, 2012 at 10:04 am

You are not quite getting it. Scottrade has its *own* rule that protects profits for its market makers who, *quite legally*, kick-back money to Scottrade for the order flow. There is no requirement to hold an order until the primary market opens, it just is a rule that protects the market-maker’s profits and lets Scottrade off the hook from otherwise violating the “best-execution” clause of the SEC. It is *only* a disadvantage to the customer, and no amount of website-inspired anonymous brio (I am speaking of others on this blog) will be able to contradict this. Prices go through your price to your disadvantage, but you have no sure-fire legal recourse except going to a broker who does not have this blatantly negative policy.

TDA is one. You can specify your market as NASD during regular or after hours, and there it goes and there it fills. You can specify their “regular way,” and it will fill also if the market goes through your price. Only Scottrade that I know of, has this bizarre policy. And I’ve traded with E-Trade, Scottrade, TDA, J.P. Morgan, Merrill, Sogotrade, Interactive Brokers, TradeStation, Schwab.

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Lee Bodine January 7, 2011 at 1:09 pm

This very thing happened to me yesterday on Scottrade. I put a limit sell order in 30 minutes before market open. Shortly after the market opened, the stock reached and exceeded my limit but then very quickly declined. My trade was not executed. When I called to asked why I got the same explanation: they do not trade a stock until it has first traded on its “primary” exchange. On top of that, the person I was talking to advised me not to modify the order while he investigated why it wasn’t executed. Meanwhile the price continued to slide. By the time I got the explanation, realized that they weren’t going to hold themselves responsible, and modified the order I had lost almost 8%. Saying that they all do it doesn’t make it right. Neither does the catch-all warning “your order may not execute”.

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S Brooks April 6, 2012 at 10:06 am

Thank God someone on this blog understands the point and is not blind to this malfeasance and borderline SEC violation. Believe me, you will have no support from FINRA, just their recommendation to go to another brokerage.

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Scott Fenton July 16, 2010 at 11:32 pm

Actually, that’s not quite accurate. I know of no other brokerage that pins their opening trades to the major market’s open. I have brokerage accounts with Scottrade, TDA, Tradestation, Vanguard, and Interactive Brokers, and only Scottrade does this. Moreover, because a brokerage service pops up a message does not exempt them from the SEC’s best-fill requirements.

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G Robinson December 30, 2010 at 4:59 am

Gotta love Scottrade Hater

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pedro martinez April 8, 2011 at 9:52 pm

do scottrade make me rich wit 50 dollor? help me thank you.. yes i want stock to buy for my family be rich

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kingkong trader April 28, 2011 at 8:07 am

I like the Scottrade Elite, but Scottrade has a 10 cents rule on the Stop Limit order and Slow execution that made me move my Account to TradeKing. So far TradeKing order execution is very good. If the price hit your limit order, it will be filled. I’ll update TradeKing experience next year. I’m still looking at LightSpeed Trading, Interactive Brokers, and MB Trading. Their commisions are very low .

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greg April 5, 2012 at 7:09 am

When you enter a limit order do you really think you are the only person that has picked that price for a limit execution? You place your order and basically stand in line with other orders in front of you. Just because your limit is reached doesn’t mean everyone at that limit is executed. There are only certain shares available at a given price when a quote appears on the tape. So if your order doesn’t fill its more then likely the price changed before your order was executable. Learn the market before you get on a blog site and complain about trade execution when you have no clue how it works.

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S Brooks April 6, 2012 at 10:19 am

I don’t really understand your negative t0ne. You are the one who does not understand what’s being discussed. The problem is Scottrade does not fill you when your price goes *through* your limit price. That would be a violation except for the way they have specifically crafted a work-around to protect themselves and their kickbacks from their market-makers. Other brokerages do not do this practice. I have traded institutionally, professionally, and privately for over 35 years. I have spoke specifically to the SEC about this practice, as well as to Scottrade.

Everyone with any experience knows that if a price hits your limit price, you may not get filled. The point is: when you are buying and it goes below, or when you are selling and it goes above, the more disreputable brokers put procedures in place to use your order as insurance and make excessive profits at your expense.

Scottrade is one of them. TDA is not. Nor is IB.

We put on approximately 1,000 trades a day. We see this practice regularly at Scottrade, so much so that we adjust around the open for them. We only keep using them because of certain inventory they have. TDA and IB always honor a trade through a price, imperfect as those brokerages are, and have given us fills in the extremely rare case where fast markets were a legitimate (barely) excuse. But neither even has in place this bizarre not-until-primary-market-opens rule. It completely locks you out of some great opportunities during various liquid, opening sessions.

It is not about limit orders being touched. It’s about execution when the markets go through your price. Listen and read better.

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Jimmy April 17, 2012 at 12:29 am

I have had a wonderful experience with Scottrade. They have a terrific signup and referral programs where you get three free trades when you signup using a referral code. You also get free trades when someone else signs up using your referral code. The normal trade fee is $7.00. Their online tools are great. Use this code in scottrade for free trade: SJME8554.

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