Founded in 2000, ChoiceTrade is an online brokerage firm, catering predominantly to day traders. Headquartered in New Jersey, ChoiceTrade is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), thus making it a safe choice as a trading broker.
ChoiceTrade provides two types of trading applications to suit the needs of its investors: a web-based trading tool, and an advanced, trading platform. Both applications are well designed and provide the most basic elements investors would expect from their brokerage firms. These features include portfolio tracking, streaming quotes, and conditional orders.
ChoiceTrade offers independent investment research to help its clients understand companies before placing trades. It also provides a savings calculator, charting options, and investing seminars to further facilitate the investment process. All of these tools and resources help ChoiceTrade put up a respectable fight against its competition, and allows the consumer to make educated trading choices.
The web-based tool is versatile as it can run on smartphones through the ChoiceTrade mobile app, as well as on tablet devices, making investing on the go that much easier.
Some other low-cost measures comprise the brokerage firm's commission plan, which is competitive in nature. Its $5 flat rate fee for stocks and ETFs is significantly lower than the average rate other brokerage firms charge. This detail makes ChoiceTrade an affordable alternative for investors.
Option trades are also competitively priced at $5 plus $0.15 per contract. This means that the total amount an investor would be charged for trading 10 options contracts is $6.50. These low commission rates make the company's options investments another worthwhile trade for active traders.
For investors with an account balance greater than $25,000, ChoiceTrade allows them to opt for a margin account. This means investors can put down a certain percentage of the value of securities and then borrow money from the brokerage firm to cover the rest.
ChoiceTrade also offers its clients an Investor Community, where its users can connect with fellow traders and investors, share portfolios, and participate in sponsored events. This allows users to interact with like-minded traders, form investment clubs and feel like they're making informed investment decisions. All of the interactive broker's users gain access to this community and its messaging features. In a 21st century world where people enjoy creating social circles online, this helpful community distinguishes ChoiceTrade from its competitors.
ChoiceTrade is best suited for traders who generally place large transactions. This is due to the fact that the monthly options commission is higher than average at $50. Once a trader has traded 125 contracts in a month, they will not be charged additional fees on further transactions.
While the web-based trading tool is free, with a lowe trading fee, the more advanced platform and streaming quotes come at a steep cost. Choicestreamer is $14.95 per month while ChoiceTrader Direct Pro is $125 per month. These fees are fairly high, especially when one of the industry's leading platforms, Thinkorswim at TD Ameritrade, comes at no additional cost to its members. So, for investors looking for advanced tools without the extra cost, ChoiceTrade might not be the best broker for them.
While ChoiceTrade offers a variety of mutual fund investment choices with minimal fees attached, upon further inspection, we found that brokers will charge $25 for certain mutual fund transactions. This is another steep price, especially compared to mutual fund options found at other brokerage firms like TradeKing, which charges $10 for similar transactions. Thus, we don't recommend using ChoiceTrade for mutual fund investments.
ChoiceTrade, at first glance, offers cheap commission rates for their funds and securities. However, users need to realize that there are some additional, hidden fees to consider that mitigate the losses for the company. For instance, a $35 inactivity fee is charged quarterly for investors who make less than 5 trades in the quarter and who have accounts with less than $50,000 in them. Less obvious fees comprise the $0.005 per share surcharge ChoiceTrade charges for trades made during after hours.
Available assets to trade with ChoiceTrade are limited to U.S. equities and options. If you are looking for international trading options, it would be in your best interest to research other online brokers.
ChoiceTrade's investment research is meant to help users make informed decisions when placing trades. However, critics argue that the provided research tools are very rudimentary, providing only basic investing information. The brokerage firm's educational resources are also not very user-friendly for novice investors who need greater assistance with investing. It's no wonder the firm's customers are mainly experienced traders.
Another major drawback of the brokerage firm is its customer service. Many users complain of inconsistent customer service and rude representatives, especially novice investors who require thorough explanations. Additionally, the lack of 24/7 customer service support is another disadvantage of using the company. Many of ChoiceTrade's competitors provide live chat support and 24/7 assistance. In an industry where the market never sleeps, this drawback could turn investors away from the brokerage firm.