Best Combination Of Stock Brokerages – Personal Experience

Let me start with showing off my working desk where I trade from. Don’t mind the wires, it can get much crazier ;) Punit Gupta Office

In this post, I will summarize few of the interesting experiences I had while dealing with different brokerage firms in my trading endeavor that started almost three years back.

TD Ameritrade for Blue-Chip and Penny-Stock Trading

It was March 2010 when I funded my account with Ameritrade. I very well remember how much excited I was before trading for the first time. Back then, I pretty much dealt with stocks exclusively, mostly large caps in technology and finance space. I got hooked on to trading pretty early as this newly found interest took most of  my spare time, while I was yearning to learn more. Since my account size was less than $10,000, I was not allowed to day trade which I found irritating back then. However, later on that proved to be a boon for my trading as I discovered how dangerous day trading can be for inexperienced people. But kudos to my intelligence ;) and my connecting to some very bright people I met through twitter, soon I was upgraded to the Apex class of customers at Ameritrade due to my account size and trading volume. TD Ameritrade pricing is quite straight forward and is apt for the quality. They charge $9.99 for stocks and ETFs. Options pricing includes $9.99 as base options charge and $0.75 per contract fee. For more details about trading with them, please visit Trading with TD Ameritrade

OptionsHouse for Cheaper Options Trading

Slowly, I started picking up the skill-set required to be a successful trader, and this was the most exciting phase.  Next , I wanted to figure out everything about  options trading. I did plenty of research, took some tutorials, and it was pretty clear that options were very interesting but trading options for real was yet a tremendous challenge. I started out with trading straight options and slowly made my way into complex options strategies, such as options spreads, butterflies etc. Initially, I traded options from the TD Ameritrade account itself, only to realize later that huge sums were burning as commission. TD Ameritrade charges 0.75 per contract so if you are trading 100 contracts on an average, round trade costs you $170 bucks ($9.99 x 2 for base charge + 100 x 0.75 x 2 for per contract fee). That is when I started shopping around for a  broker with better pricing. Came across OptionsHouse, back then OptionsHouse looked like a shady broker by the looks of it if you ask me honestly. But I was amazed to see that after  using OptionsHouse, my commission for the above trade got reduced to $47. A saving of almost 75% on commission charges! Now, that’s mind-boggling!! Also OptionsHouse provides excellent education for new options traders, which I have been able to capitalize  over time. I even learned a few of the very complex strategies from some of the OptionsHouse weekly seminar series. For more details about trading with them, please visit Trading with OptionsHouse

If you are a new options trader, you should also look into TradeMonster’s offering. TradeMonster provides excellent options fill and their trade simulator is simply amazing. New and intermediate investors looking to primarily trade options can try their hands at tradeMonster as well. For more details about trading with them, please visit Trading with tradeMonster

Interactive Brokers for Shorting

While learning options trading, I also came across traders who were able to mint money by shorting stocks. There is a saying in the market that “stocks take staircase up and elevator down”. So, if you are good at timing your entry for short trades, you can make solid money in such trades in relatively shorter time frame. One of the biggest problems in short trading is availability of limited stocks to borrow for shorting. Normal brokers such as Ameritrade, OptionsHouse just don’t specialize in that. That led me to find Interactive Brokers (IB). Traders using IB realize the importance of being able to short stocks, while the majority out there do not have access to short borrows. HIGHLY recommended brokerage for traders who want to dabble into short trading or traders who are fed up of not being able to short most of the time. Though I must caution traders at this point that there is no guarantee of you being able to find borrows at IB either. However, there are increased chances of finding them at IB, which is still quite valuable. My initial fund of $10,000 in the IB account has grown more than double in the past year and a half , since I have been using them. Not bad considering I am a VERY infrequent short trader.

I am mostly trading in options or straight stock. As a bonus to traders who are not in USA, IB offers their services in UK, Hong Kong, Spain, Germany, Canada, Australia and Japan along with several other countries. So, if you belong to any of these countries, definitely consider trading with IB. For more details about trading with them, please visit Trading with Interactive Brokers

Now let me show you my fund allocation at different brokers:

Brokerage Firm

TD Ameritrade

OptionsHouse

Interactive Brokers

Main Purpose
Stocks and ETFs including penny stocks Options Trading Shorting
Capital Allocation
80% 20% 20%
Reviews
TD Ameritrade Reviews OptionsHouse Reviews Interactive Brokers Review
Current Offers
60 days of FREE trading + up to $600 cash reward 100 Trades Absolutely FREE – $600 value Best for short trading. Also Best international support
Open Account
Open Account Open Account Open Account

Bonus Tip

Call me a good negotiator or whatever, but I pay insanely low rates at Ameritrade for both options and stocks trading. I am happy to give the tip away to anyone. If you don’t have an account already, go ahead and open the account from the above link and contact me from Support.

I am glad to help out anyone who has any specific question about these brokers. Please drop me a line I will get back to you.

Related posts:

Comments: 6
Trading Rush n Crash
15 September 2012
Reply

New trader in the block, loved reading your post. Really these days its hard to work with one broker. I myself used to trade with Charles Schwab, shifted to optionshouse & ameritrade. Kinda very pleased.

I dont trade with interactive brokers as i dont like their platform, plus i never short..

once again, thanks for helping newbies like me :)

    Punit Gupta
    24 September 2012
    Reply

    Thanks for stopping by and leaving feedback.

    Yes if you don’t short, I think other brokers are better than IB. IB is just phenomenal for availability of borrows.

    TD, OH etc are really good brokers and rank among the top among the popular brokers on our site.

    Thanks once again, good luck trading.

Tina trader
02 September 2012
Reply

Nice post. I realized I am not the only one who is lost on how to start trading. I recently opened an account with ameritrade with 5k starting capital. so far so good. good luck

    Punit Gupta
    24 September 2012
    Reply

    No no you aren’t the only one. In fact confusion is the first step towards success. Please don’t worry about it much.

    Just develop your persona trading rules and stick to them religiously. Biggest rule from my experience is to cut losses fast. If you follow that, good chances you will grow your account at a good pace.

james
29 August 2012
Reply

thanks for your help
i was considering td also because they have brick and mortar banks now

    Punit Gupta
    29 August 2012
    Reply

    James,

    Glad that you liked our service. Please keep us posted about your experience about TD Ameritrade and other brokers. Good luck with trading, be in touch.

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