- Commission Strucutre
- Software Packages
- Customer Service
- Overall Value
Through our ChoiceTrade review, we’ve determined that although at first glance, the commission sturture seems very attractive, you ultimately pay for it in software fees. The most active traders, however, will still hugely benefit from the commission structure.
Founded in 2000, ChoiceTrade has been trying to attract frequent traders for several years. Armed with investing software and ultra-low commissions, the brokerage firm is an enticing prospect. Although it isn’t one of the big players in the industry, it’s definitely worth taking a look at. In this ChoiceTrade review, we will attempt to quantify it’s value for various types of traders.
Equity transactions at ChoiceTrade cost $5 each. An alternative plan provides market and limit day orders free of charge, which is a great way to rival Robinhood. The stocks traded under either plan must be valued at $1 or more.
Foreign stocks with ticker symbols ending in F that trade on a U.S. exchange cost $25 per transaction. OTC and bulletin board stocks are $7.
ChoiceTrade also offers two derivative commission schedules, and either one may be chosen regardless of which stock commission plan is selected. The first choice is 15¢ per contract plus a base charge of $5. The second is a flat $10 with no per-contract charge. In either case, exercises and assignments cost $5, and there is a maximum of four legs per trade.
For the $5 stock commission schedule, ChoiceTrade charges a $3 monthly account fee. The $0 commission plan comes with an $8 monthly fee. Both schedules require a $100 minimum account balance. There is also a $10 or $35 inactivity fee (depends on the commission plan) every three months. It can be avoided by placing at least five trades during the quarter.
There are five platforms available at ChoiceTrade, three of which come with fees. The cheapest is $14.95 per month, while the most expensive is $135.
I was excited to receive a free trial of ChoiceTrade’s website platform. After getting inside, I was surprised how unsophisticated it was. Option chains are not laid out well, for example.
Charting on a stock’s profile page does not offer comparisons, technical studies, company events, or drawing tools. There is a Java version, but I was not able to get it to function in any browser.
After entering a ticker symbol in the ‘Start’ box in the upper-left of the screen, an information section will display a chart icon. Clicking on this does produce a small graph where some technical studies and comparisons can be made.
One feature that I did like was Power Basket. Here I was able to enter orders for multiple stocks, line by line. For example, I could enter ‘Buy 5 GOOG @ Market DAY’ and similar lines of text to create multiple trades for different stocks at the same time. The trades are saved in a different section, and I had to go there to submit the orders, a slight nuisance.
Although the website was pretty horrendous, I found the broker’s mobile platform to be even worse. It is located at m.choicetrade.com (there is no mobile app), and trading is about all it is capable of. Many important features that other brokers offer on mobile apps are missing, such as charting and check deposit. There is a watchlist on the mobile platform, and option chains are available as well.
QuoteStream comes in regular and professional versions. The pro edition has real-time alerts and a mobile app, which the regular platform doesn’t offer. Both platforms come with headline news, advanced charts, heat maps, and streaming quotes from major exchanges. OTC quotes, data from CME, and Level II information all cost extra.
Traders who need direct-access routing can use Direct Pro, which is available as a desktop program. I thought it was much better than the broker’s website. Direct Pro comes with real-time Level II quotes (at $20 per month) and ECN books. Also useful are time and sales windows. News headlines and real-time alerts are available. The platform can trade option strategies as well.
The worst thing about Direct Pro is the fact that the broker’s $0 commission schedule can’t be used with the platform. Stock trades on Direct Pro cost 0.25¢ per share with a $5 minimum.
A chart can be shown as a small window within the platform, or it can be expanded to fill the monitor. Although there are technical studies, I was dissatisfied with how they could be displayed. For example, indicators that normally are shown below a graph, such as MACD, would display on top of a graph. I could not figure out a solution to this problem. On the flip side, colors are customizable.
Although it hasn’t been launched yet, the broker-dealer is working on the development of another platform, ChoiceTrade Elite.
ChoiceTrade clients might be able to reach a company associate during the week from 9:00 am to 5:00 pm, EST. In a test call, I was not able to reach anyone, and the automated system sent me to voicemail.
Executions and Routes
It’s possible to select the destination of your order at ChoiceTrade. The broker offers ARCA, TRAC, INET, and several other venues.
ChoiceTrade permits short equity positions in a margin account. Initial margin is the greater of 50% of the sale price or $5. Maintenance margin for securities above $5 is 30% or $5. For stocks below $5, it is 100%. Stocks under $2.50 cannot be shorted at ChoiceTrade.
Type of Trader ChoiceTrade is Best For
Because ChoiceTrade charges a monthly fee for all accounts, the broker isn’t ideal for inactive buy-and-hold investors. On the other hand, the broker’s $0 stock commission is ideal for traders who place a lot of trades every month using market or limit day orders.
- Very appealing commission schedule.
- A wide selection of trading software.
- ChoiceTrade allows free trials of some of its platforms, so you can take them for a test drive before committing any money.
- Using a live broker over the phone to complete a trade is an extra $30.
- The broker’s best platform right now, Direct Pro, can’t be used with the $0 commission schedule.
ChoiceTrade offers bargain-basement trading with low monthly account fees that will rival low-cost firms like Robinhood and Firstrade. Its trading tools need improvement, though.