Entrepreneur and trader Guy Gentile founded SpeedTrader in 1999. He created the brokerage firm to provide investors with direct access to the market, thereby offering advanced day traders the ability to have more control over their investments. The company is a division of Stock USA Execution Services, Inc. (Stock USA), which is an online brokerage firm based in New York. SpeedTrader offers competitive rates within the industry, especially when compared to some of the big name brokerage firms. The company is also hailed for its state-of-the-art trading platforms as it provided four for its investors to choose from. These platforms cater to the firm's clients' diverse needs.
- Trading platforms
- Educational resources
SpeedTrader's commission rates are competitively priced and fortunately for investors, the company recently removed certain volume requirements that it had on trades. Today, investors are charged $6.95 per trade for stocks and ETFs, which is pretty fair when compared to industry averages. Options trades are also significantly affordable with SpeedTrader at just $2 plus $0.40 per contract. SpeedTrader is also known for rewarding its clients who have more than $25,000 in their accounts. These investors can rest assured knowing that their flat rate trading fees will lower to $4.49 per trade. Other benefits of SpeedTrader include:
SpeedTrader offers investors four trading platforms to choose from. One is a mobile, web-based trading platform, which is as basic as platforms get. It allows investors to place online trades free of charge. The firm then offers ActiveWeb, which is a browser-based direct access trading platform. This platform takes the middleman out of the equation to help investors directly access and trade on the market.
SpeedTrader PRO, the firm's main platform, is an advanced platform that offers several useful functions. It offers watchlists, option chains, and analytic reports to help facilitate the investment process. Investors using the platform also receive visual alerts that they can modify in order to alert them of possible trading opportunities.
SpeedTrader PRO, unlike a lot of competitors' platforms, offers a training account, for free, to assist investors who are navigating SpeedTrader for the first time. This means that investors can virtually trade and test out the brokerage firm without losing any money.
Lastly, on the platforms front, the firm offers an app, iSpeedTrader, which is available on iPhone and other iOS devices. Investors on the go can use this app to place trades and view how their investments are performing.
As far as customer and educational support go, SpeedTrader performs fairly well compared to its competitors. It offers great guidance for its traders in the form of video tutorials, FAQs, and a free widget to add to their professional or personal websites. The brokerage firm's customer service is pretty standard when compared to the support offered elsewhere. The brokerage firm offers assistance via live chat, telephone, and email during normal business hours.
- Platform limitations
- Fluid pricing
- Lack of research/data
SpeedTrader offers competitively priced commission rates for its stocks, ETFs, and options. However, like most brokerage firms, investors should always read the fine print and understand the additional fees that they may incur. For instance, SpeedTrader charges investors a $30 fee for inactivity, namely making fewer than 15 trades in a quarter. This is a hefty price to pay for not using the brokerage firm as much as specified. Options trades, while inexpensive at the flat rate fee, also have additional fees, mainly the options' exercise or assignment fee, which is $30. When compared to some of the big name brokerage firms, this options fee is nearly six times the price that other firms charge. Other drawbacks include:
While the firm provides great platforms that offer efficient and fast trading capabilities, they could be improved. They're not customizable and they lack some useful tools like calculators, certain reports on securities, and volatility information, to name a few. These platforms also tend to come at a price. For example, ActiveWeb is $75 per quarter and SpeedTrader PRO is $49 per month (but is free for investors who make $199 in commissions per month). Depending on the needs of the investor, these charges can seem pretty steep for platform features that other brokerage firms tend to offer for free.
When it comes to pricing and platforms, SpeedTrader is known for changing things up quite often. So, its information and its tools can quickly become outdated, which is unfair for its past investors who traded at fairly high commission rates and became accustomed to the provided platforms. Now, they'll need to adapt to the new changes and accept the fact that new clients are in a better position since they are trading at fairly reduced commission rates.
Lack of Research/Data
While SpeedTrader provides great educational resources, some investors have complained about the lack of research tools available to research trades and they've also complained about the company's poor tax record keeping. Furthermore, customers aren't happy that the firm's app, iSpeedTrader, is only available on iOS devices, namely the iPhone and iPad. This ostracizes investors on the go who don't have an iOS device but may want a mobile application to place trades, track watch lists, and monitor investment positions.
The Bottom Line
SpeedTrader offers competitive prices and comprehensive platforms that cater to the needs of diverse investors. Active day traders will find some of the firm's features ideal, especially if they're considering adding more than $25,000 to their account. Since the brokerage firm allows its clients to have a test account, where they can virtually trade, investors might find this more appealing over brokerage firms who don't offer this kind of demo option.
However, investors who want to trade in small amounts and traders looking for a cheap way to place trades should all probably look elsewhere for a brokerage firm. SpeedTrader's additional fees, especially its exercise and assignment fees can be quite off-putting. SpeedTrader's ranking in Barron's magazine's 2013 (and in prior years) annual broker survey can also turn off certain investors since the firm ranked at the bottom of the list. It received poor ratings in several categories including Customer Service, Portfolio Analysis and Reports, and Ranges of Offerings, to name a few. The company didn't get rated in 2014 and 2015. Thus, SpeedTrader should be considered only by experienced investors who plan on investing a lot of money with little assistance from their brokerage firm.