Just2Trade Versus TradeKing

Recently I looked at two discount brokers in an effort to move my ETF holdings to a broker which can provide specific tax lot identification. The first broker is Just2Trade.com, and the second broker is TradeKing.com.

These two brokers are very similar. They both clear through Legent Clearing and both offer the MaxIt tax manager system, which allows you to specify a certain tax strategy (“Minimum Tax”, “First-In First-Out”, “Last-In First-Out”, “Maximum Gain” or “Average Cost”) for every security trade. This system is great when you want to sell only specific tax lots to minimize on taxes.

In terms of commission costs, Just2Trade wins hands down. Their stock / ETF trading commission is only half that of TradeKing ($2.50 versus $4.95) and their margin interest rates is also at least 0.25% lower than TradeKing.

Margin interest rate is also lower at Just2Trade (by at least 0.25%). Current margin interest rate for amounts less than $10,000 is 3.50% at Just2Trade while is it 3.75% at TradeKing. For a margin balance between $10,000 to $250,000, Just2Trade’s margin interest rate drops to 3.5%. The margin interest rate at TradeKing is fixed at 3.75% for all balances.

At Just2Trade, you can also trade mutual funds cheaply for $2.50 per transaction. At TradeKing, the fee is 6 times more, at $14.95.

I also tested their customer service with questions and requests using email, and both replied quickly (in 2 hours or less on a business day). However, unlike Ameritrade’s customer service, which you sometimes can get a break on certain fees or free trades, I found TradeKing’s customer service to be basically useless when you try to request for some concessions. They can only reply with a canned message that repeats their company policy. I have yet to try asking for any concessions from Just2Trade.

Looking beyond the fees, each broker has a severe shortcoming. For TradeKing, it is their online-ACH transfer limitation of $10,000 each day. I called them, and tried to reason with them to let me transfer in a larger sum of money for investment, but they were very stubborn about it and it was a no-go. In my opinion, their $10,000 transfer limit per day is way out-dated, as most brokers typically have $100,000 ACH transfer limit a day.

For Just2Trade, they do not have a $10,000 ACH transfer limitation per day; their disadvantage is in their cumbersome trading system. Specifically, it does not allow you to change the order once it is submitted. To change the order, the only way is to cancel it and re-submit. This means that if you want to change the price of a limit order, you have to first cancel it, and then re-key and submit all the order information again. This is a big swithc off for me.

In the end, I am inclined to stay with Tradeking for the moment. But if Just2Trade can update their traking system to include order modifications (customer service said that this improvement is in the pipeline), I would probably say good bye to TradeKing and move everything over to Just2Trade in a heart beat.

5 Comments

  1. Mike

    “Looking beyond the fees, each broker has a severe shortcoming. For TradeKing, it is their online-ACH transfer limitation of $10,000 each day.”

    I wish I was concerned about that problem. 😉

    Reply
  2. Tom

    Isn’t Wells Fargo still offering 100 free trades a year with their PMA?

    Reply
  3. indexfundfan (Post author)

    Tom,

    Yes, Wells Fargo still has the 100 free trades a year. I am evaluating TradeKing and Just2Trade primarily for their very low margin interest rates.

    Reply
  4. Trader Jack

    Just2trade kills Etrade’s commissoin and can make the difference between you staying in the game and you losing money. Etrade cannot send orders out on alll three exchanged in the sub penny area. For example I wanted to buy CTIC at $.0875 with Etrade I have to put the order in at $.09 or if the bid and ask is $.09 by .092 I have to put my order in at $.10. On 100,000 shares that is a big spread and Etrade is not worth $800’s for an order. Does TradeKing Offer that platform that is modern and quick to fill? Just to trade may have an antiquated platform but for this kind of system I will take it over paying $800 a trade. Option trading for 5 contracts you pay $2.50 vs Etrade $6.95+.75x a contract. 11.95 vs $2.50 you can see why just2trade is the better deal.

    Reply
  5. indexfundfan (Post author)

    Don’t know about Etrade, but Just2Trade looks much better, especially now that TradeKing has raised their margin interest significantly.

    Just2Trade’s margin interest rates are among the best, ranging from 1.5% to 2.75%. That’s lower than some of the online savings accounts!

    If only they could include a “modify order” instead of cancelling and resubmitting again…

    Reply

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