Merrill Edge Review – Affordable Brokerage Firm For Day Traders

About Merrill Edge

Bank of America purchased Merrill Lynch in 2008, and the multi-billion dollar conglomerate launched Merrill Edge two years later as a low-cost online broker. Since then, the discount brokerage firm has received multiple awards from investment publications. Today, the broker has billions of dollars in customer assets.  Learn more in the Merrill Edge review.

Pricing

Commissions

Merrill Edge traders pay $6.95 for equity transactions. Unlike Fidelity and Interactive Brokers, Merrill Edge does not provide a list of commission-free ETF’s. However, Merrill does offer 30 trades per month commission-free for accounts that have at least $50,000 in combined balances across Bank of America and Merrill Lynch accounts.

Options

There is an additional charge of 75¢ for derivatives. Merrill Edge is one of the few brokers to just charge its regular commission for exercises and assignments.

Account Requirements

Merrill Edge customers pay nothing to open a securities account or to maintain it. The broker-dealer does not require a minimum deposit at opening, and there is no fee to close a non-retirement account.

Software Fees

There are no fees associated with using the broker’s website or desktop platform. However, the platform has a trading requirement of 15 transactions per quarter. Merrill will also accept the $50,000 balance requirement noted above to gain access to the software.

Margin and Leverage

Merrill Edge offers margin accounts, although its rates aren’t the best in the industry. At under $25,000, the rate is 9.875%. This drops to 5.75% at loans over $10,000,000.

Merrill Edge Trading Platforms

Website

One thing I really like about this platform as found in the Merrill Edge review is its user-friendly website. A horizontal menu at the top of the website displays various categories, such as ‘Trade’ and ‘Help & Support.’ Typing in a ticker symbol in the quote box at the top of the site produces a small drop-down box that displays vital data for that security.

Merrill Edge recently added ‘a new way to research’ feature to its website. This program leads the user through a series of graphs and charts to demonstrate how a particular stock is performing against its peers.

A stock’s profile page includes option chains, although strategies are missing. There are several order types available, although there are only two duration choices (day or GTC for 30 days).

The one part of the website that really disappointed me was the charting. A graph cannot be detached or displayed full screen, and there are only 22 technical studies.

TradeBar

Although website charting was a dud, I was impressed with Merrill Edge’s TradeBar. It sits at the bottom of the browsing window and can place orders for stocks and ETF’s. Entering orders is quick and easy, and the tool can be hid. Clicking on a small graph icon on the TradeBar produces a pop-up chart that shows up to 1 year of price history.

Desktop Platform

If TradeBar isn’t enough for you, Merrill Edge offers a desktop program called MarketPro. It has more technical indicators than the website offers. The colors of these studies can be changed, and a graph can be shown tick-by-tick, a nice feature that day traders will enjoy.

MarketPro comes with watchlists, alerts, financial news, and streaming quotes. It can also place orders for options and mutual funds, something that the TradeBar can’t do.

Mobile Trading

I found Merrill’s mobile app, when going through the Merrill Edge review, to be easy to navigate, but charting is rather deficient. It has trend lines, volume, and that’s it. On the positive side, option chains are integrated in the app, but once again, strategies are missing. I especially liked the fact that statements and tax documents could be accessed in pdf format.

The app can submit orders for stocks, ETF’s, options, and mutual funds. The order ticket is user-friendly and provides up-to-date security data.

Research Tools

The one area where I thought Merrill Edge really succeeded was in financial education. There are many videos and articles that cover a variety of topics, and some of these resources can even be accessed through the mobile app. Stocks reports are available free of charge to Merrill Edge customers courtesy of Morningstar, Merrill Lynch, and CFRA.

Merrill Edge Customer Service

A Merrill Edge representative can be reached over the phone 24 hours a day, 7 days a week. Internal messaging is available on the website, although there is not an on-line chat function. A phone number is available for clients temporarily outside the United States.

Executions and Routes

One disappointing feature that I found during my testing of Merrill Edge is the lack of direct-routing for any order type.

Shorting Stocks

Merrill Edge traders can short stocks in a margin account. The broker follows the normal Reg T requirements, which stipulates 50% as an initial margin requirement, and 30% as maintenance. The broker-dealer does impose hard-to-borrow fees for some stocks.

Type of Trader Merrill Edge is Best For

Merrill Edge would be great for traders who have at least $50,000 to invest, as found in the Merrill Edge review. As already mentioned, this balance comes with free trades and access to the broker’s desktop platform. Because the brokerage house provides managed accounts in partnership with Merrill Lynch, investors who would rather turn over their assets and let a professional manage them will find attractive packages here.

Pros…

• A well-designed website with lots of information on it.
• More than 3,300 mutual funds available for purchase.
• Merrill Edge offers IRA’s with lots of resources on its site for retirement planning.
• Commission schedule is very transparent and easy to understand.

…and Cons

• Option trading tools are on the slim side at Merrill.
• The broker-dealer’s $6.95 commission is higher than Fidelity, Schwab, and TradeStation.
• Trading in futures and forex is not available here. Ally Invest offers both, and charges less than $6.95 for equity trades.

Judgment

Merrill Edge shines as a low cost alternative to Merrill Lynch, but the brokerage house obviously caters to large Bank of America customers. Other traders will find better deals at TD Ameritrade, who also charges $6.95 for equity trades and offers its platform with no strings attached.