Scottrade Review
The home of the $7 trade
Scottrade originally started life in 1980, when Rodger Riney founded Scottsdale Securities. By 1991, the firm had grown to a branch network of 15. In 1996 the firm launched Scottrade, and in 1998 it set its online trading price to $7, still one of the lowest commissions available.
In fact, the company flags its low fees – there are no set-up or account maintenance fees: if you want to leave your account redundant for a few months, you won’t suddenly find that your account has been sucked short by charges to be idle.
But there is far more to Scottrade than its low fees.
Stocks, Options, and more
Scottrade made its name in stock trading, but traders can also trade options (again at $7, but with an extra charge of $1.25 per contract), as well as bonds and mutual funds.
It’s straightforward to open an account online, with a pretty low minimum of just $500 for a stock trading account and $2,000 for options. That minimum compares well with its competitors.
Once you’ve opened your account – and here you have a choice that will suit most, from individual accounts, to joint, to IRA – then the world of investment opens to you: literally. Scottrade’s $7 price holds for many of the international markets you can access from its web based trading platform. And this is on top of thousands of funds, with many of these free from transaction fees.
You can also trade with the assistance of a telephone broker, but this increases the charge to $32. Account holders who have a balance of $25,000 or more have the option to use its advanced Scottrade Elite platform.
Customizable Trading Platforms
The Scottrade Trading website allows you to drag and drop windows and customize your own trading home page. You can have your positions table where you want it, hide your account balances and profit and loss numbers if you want, and have your charting and research tools open and streaming real time. It’s a good, powerful tool, helped along by the Quick Trade Bar that allows one click trading in and out of your favorite names.
Building a portfolio and running to a set strategy is made easier with the Scottrade Portfolio Manager, which helps you set asset mixes and monitor and rebalance. The colorful pie charts are a quick and easy way to assess how that asset mix is working for you.
All told, this basic system does what many more ‘advanced’ platforms do. And then there is Scottrade Elite, which puts you into the cockpit of a professional trading workstation. With this tool you get advanced research and charting capacity, high/ low filters, and an alert facility for when your stocks break certain prices. You also get the full Level 2 price screen from the market, with color coding to make price strength or weakness easier to monitor.
For options traders, the Options First platform supports not just vanilla options trading but also strategies such as straddles, spreads, and collars. There are also a number of trade analysis tools to keep profit and loss on track and a virtual account to test strategies you’ve built before going live and on risk.
Other Resources
Scottrade has a Knowledge Center with articles and video learning and information facilities covering investment, tax, strategies, and, of course, help with platform usage. It’s a pretty solid source of help and advice with a broad base.
In conclusion
Scottrade offers the investor and trader alike a good platform for his needs. Trading costs are very competitive on the whole, though those who trade more regularly in options may find other platforms, such as Options Express more cost effective.
For the breadth of offering, the ease of use, and the ability to build, monitor, and maintain a diversified investment portfolio online – and then go international if you want at a similarly competitive trade cost – Scottrade should most definitely be considered as a solution.
