ThinkOrSwim Review - A Broker For All Investors?ThinkOrSwim started in 1999 but part of it was already online. The site was ultimately a combination of several mergers involving educational sites such as Online Investor Toolbox acquired by ZiaSun who later merged with Telescan to form Investools. In 2006, Investools merged with ThinkOrSwim to form the site known today with the ticker SWIM. The company focused on selling options online and became the leader in retail stock option trading. By January 2009, the increased interest in options led TD Ameritrade, then the leader in the number of daily stock trades made online, to take a close look and make an offer to purchase the company for more than $600 million. At that time, stock options were starting to become an important investment for users of online brokerage sites. The clients trading options traded more frequently than stock traders do, so it meant higher revenue for the firms. TD Ameritrade knew that and wanted that and wanted that revenue heading their way. Ameritrade chose the company because of the advanced trading platform that offered such options as multi-legging. While trading options can be highly volatile, in good market times, they are also highly profitable. During down markets, investors frequently use options to protect the stocks they cover and increase the income flow to holders of those stocks. Cost of Services Every ThinkOrSwim review notes the cost of $9.99 for stock trades as middle of the road. This one is no exception. The cost of trading options is the same with the additional charge of $0.75 per contract. Of course, like many online brokerages, those jump up substantially if you use a broker to assist you in a trade or the telephone trading option with the price of broker assistance being $44.99 and telephone trading $34.99 plus the per contract cost if you trade options. ETF trades go for the same price as stocks, but ThinkOrSwim also offers some commission free ETFs you can trade, however, you need to keep them at least 30 days or expect to pay a short-term trading fee. The same is true for certain no-load no-transaction fee mutual funds. You incur the cost of trading no-load mutual fund set at $49.99 for other no-load funds, if you don’t hold them at least 180 days. Treasuries at auction cost $25 with the rate for all other bonds at a net yield rate. Futures are $3.50 per contract and Forex trading has some commission free trades and a fixed schedule for other specific trade combinations. Products and Services ThinkOrSwim offers Forex trading, ETFs, stock trading, bonds and options, as well as mutual funds. However, like many brokerage services, the cost of trading mutual funds is exorbitant. Unlike some online brokerage houses, if the fund has a load, they use the commission from the load as their cost and don’t charge for the purchase or sale of the fund. Penny stocks incur the same charge as regular stocks, another unusual find for brokerage services. If you want to trade in futures, there’s a little hitch. You first have to open a TD Ameritrade account, then you can trade futures in your ThinkOrSwim account. However, they do have a full service futures selection. The software was one of the reasons Ameritrade purchased ThinkOrSwim and one of the reasons investors stay with their ThinkOrSwim account. There are four different options, thinkDesktop, webBased, thinkMobile or thinkorswim Mobile. Each offers a varying amount of software designed to help you make the wisest investments. Platform The trading platform is one of the best of those offered by online brokerage houses as any ThinkOrSwim review normally notes. It offers a well-designed platform you can customize, which is also intuitive. The ability to enter and execute an order rapidly is important and the platform allows you to do that with speed. The site offers charting features with many other sites charge a premium to access. Shadow Trader and live broadcasts from the S&P pit are additional features that make this site so interesting to use. Positives
Negatives
Conclusion TD Ameritrade made a wise purchase when acquiring ThinkOrSwim. They offer the benefit of purchasing options and futures, but also offer many features to educate the user on the most prudent use of the products. This site is highly rated for customer service and the software, as it should be, and offers many benefits to those who want futures and options as part of their investment portfolio.
|