TD Ameritrade Review

Pros Explained

• A wide range of educational content is available in different formats. This allows investors to increase their trading knowledge and market expertise. Especially beginners can benefit from TD Ameritrade’s outstanding educational tools. They will feel more confident and able to make better investments.

• You can easily pursue your preferred investment strategy with the extensive trading tools and resources available to you. Whether you are looking for trading ideas generators, options screeners or research insights, TD Ameritrade has everything you need.

• The website and mobile app are user-friendly and well-designed. Users have a seamless investing experience. TD Ameritrade splits the user experience at its core. Casual investors will follow a TD Ameritrade website and mobile path, while traders and more active investors will choose thinkorswim desktop or mobile.

• Excellent customer support: TD Ameritrade provides unparalleled industry support, boosting investor confidence through prompt resolutions and reliable service.

The Cons

• Fractional shares cannot be offered: This is a problem for investors who want to add high-priced securities in their portfolio. Charles Schwab offers fractional trading. However, it is not clear if this feature will be transferred to TD Ameritrade after the merger.

• There is no direct cryptocurrency trading. Only funds, Bitcoin futures and trusts can provide indirect exposure to the crypto market. Alternatives should be explored by investors who prefer to trade actual cryptocurrencies.

• Cash sweep program enrollment is not automatic: Users can choose to opt in for this feature that holds cash in an FDIC protected account. This extra step could mean that investors miss out on the interest they earn on their cash.

Useability

TD Ameritrade has always been focused on the client experience, which is why all versions of the platform are seamless and intuitive. Every version has many customizable features that allow users to tailor the trading platform to their needs.

TD Ameritrade's website version includes a doc tool that allows users to modify and tweak their dashboard. There are 13 modules available for traders to choose from, including watchlists and account balances as well as RSS feeds, market news, or other similar reports. You can arrange modules as you wish.

It is easy to monitor your holdings and see investor balances and positions on the mobile app. You can also access market news about investor positions, which gives traders more information and allows them to make changes if necessary.

You can easily scan any security for useful information, even if you are not an active investor. Investors can easily access earnings information, analyst ratings and dividend payouts by simply entering the ticker symbol. They also have access to price history and charts.

Trade Experience

TD Ameritrade makes it easy to enter, execute, and monitor trades via the web platform. The search tool allows users to enter the ticker symbol and place orders right from the website. The web platform and the mobile app offer most of the same asset classes, except for fixed-income products.

TD Ameritrade provides investors with screening tools that allow them to filter stocks, ETFs and mutual funds to find the right assets to trade. Filtering by market capitalization, sector and other criteria is possible. You can also create your own screens using the tools available. This area is for everyone, from novice traders trying to narrow down investment options to seasoned traders searching for new ideas.

Thinkorswim is designed for advanced traders. It allows users to add indicators and draw trendlines through the portal. Thinkorswim is customizable to suit trader preferences and can be downloaded. For more complex investments such as options chains or derivatives, analysis tools are available.

The trading simulator allows users to create their own tools with the thinkScript(r), programming language. Advanced traders will prefer the thinkorswim experience due to the greater number of features and functionalities than the other TD Ameritrade versions.

Mobile Trade Experience

TD Ameritrade's mobile experience is outstanding, and they were awarded the Best Broker for Mobile App category. The mobile app allows you to trade as seamlessly as on the web. This is a rare feat in the industry and demonstrates how TD Ameritrade innovates with mobile investing.

The top right corner of the screen displays a prominent green "trade" button. You can quickly execute trades by entering a symbol. You can access real-time data streams and watchlists as well as market news. Although the mobile app does not support drawing on charts, trades may be initiated from these screens.

The thinkorswim app offers more advanced charting capabilities, such as chart customization. The thinkorswim mobile application can be used to trade multi-leg options and perform analysis on positions. It also has similar functionality as the thinkorswim platform.

A wide range of offerings

Clients of TD Ameritrade can trade a variety of assets via the web platform as well as the mobile apps. These assets include stocks, options and futures. TD Ameritrade also offers innovative products that appeals to a wide range of traders such as micro futures. This increases investor access and lowers the cost.

One limitation is that TD doesn't offer fractional shares, international bonds or mobile apps for fixed-income purchase. TD Ameritrade users can also access:

• Stocks, both long and short

• There are more than 13,000 mutual funds available, and 3,628 are non-transaction-fee funds.

• Bonds (corporate and municipal bonds, Treasury bonds, and CDs).

• Futures/commodities

• Multi-leg and single option contracts

• Futures contracts for Bitcoin

• Foreign exchange (70 currency pairs)

• OTCBB (penny stock)

• Micro Futures

Types of Order

TD Ameritrade offers many types of orders across its platforms. These include the standard market, limit and stop-limit as well as trailing stop orders. However, only the thinkorswim(r) platform lets you use conditional orders such as order-triggers-other (OTO), one-cancels-the-other (OCO), order-triggers-two (OTT), and similar orders.

OCO is a more complex order type that traders can use to help them navigate risk and quickly enter and exit positions. This allows traders to spend more time analysing the market and looking for their next move, without needing to closely monitor current trades.

Notably, all TD Ameritrade platforms allow you to stage orders for later entry. Orders can be staged for later entry by investors who have the option to choose a tax lot. This allows them to maximize tax implications.

Trade Technology

Many investors are concerned about the speed and accuracy of order execution, especially active traders. Markets can move quickly, so it is important to have a smooth and precise order routing process. This will ensure that you get consistent execution. How a broker routes trades will determine the likelihood of getting the best price for the order. Price improvement is when a trade is executed at an amount that is higher than the current market price.

TD Ameritrade has its own order routing technology. Clients have the option to route orders to specific exchanges, if desired. TD Ameritrade orders are processed in 0.04 seconds on average. Execution quality data includes market orders sizes of 1 to 1,999 shares. 97.4% receive price improvement. On average, $0.0180 is the net price improvement per share.

Interestingly, TD Ameritrade, one of a few brokers, offers backtesting. This allows a trading strategy for historical data to be tested against. This feature allows you to fine-tune your investing strategy with market knowledge.

Prices

TD Ameritrade has, like other companies in the industry, reduced its fees over time. While some fees may be slightly higher than those charged by competitors in certain areas, most broker fees are within industry norms.

• Online ETF or equity trades are free from commissions at TD Ameritrade.

• OTCBB trades are subject to a $6.95/transaction commission - however, most brokers offer these trades at no additional cost.

• Options trades are not subject to a per-leg commission. Per-contract commissions start at $0.65 VIP option customers can negotiate private volume discounts for their commissions.

• Orders for 50 options contracts cost $32.50

• Covered call trades of 500 shares and five contracts would run $3.25

• For funds not covered by the No Transaction Fee Program, mutual fund commissions range from $49.99 to $74.95.

• Fixed income is sold on a net yield basis. This means that TD Ameritrade marks the price of the bond either up or down when it is purchased. The fee is not transparent.

• Exchange fees are a common charge for most orders. These fees are usually fractions of a cent per share or contract. TD Ameritrade absorbs them rather than passing them on to customers.

• Margin interest rates range from 11.5% on a balance of $10,000 to 10% on a balance greater than $100,000 as of June 2022. This rate is significantly higher than that of some competitors. Account holders with high net worth can negotiate lower margin rates depending on their account size.

• Futures transaction fees per side are $2.25 plus exchange fees

• There is no commission for trading forex currency pairs. They are traded in 10,000 unit increments. Spreads reflect the cost of trades and TD Ameritrade receives compensation from its liquidity provider based upon volume.

• There are no fees for inactivity

• No charge is charged for transferring a portion of an account. Transferring an entire account costs $75

• The cost of sending a wire is $25 The cost of sending a paper check is $25. However, if the client asks for overnight mail, there will be a $15 charge.

• The voluntary reorganization fee is $38 for corporate actions.

• Accounts with low balances will be charged a $2 handling charge for paper statements. Trade confirmations can be obtained for free.

• The live broker fee for trades across all asset classes is $25

How this broker makes money for you and from you

Many investors have seen their prices drop due to increased competition in the industry and new trading platforms. Despite the fact that $0 commission is prominently advertised, there may be other costs associated trading that are not as obvious. Below are some examples of these costs:

• Interest on cash.TD Ameritrade clients don't earn interest on cash they have in their accounts. To earn interest on cash that is not being used, clients must opt in to TD Ameritrade’s cash sweep program. The current rate for idle funds is 0.01%. This could be viewed as a disadvantage, since competitors automatically enroll clients in cash sweep programs.

• Order flow payment: It is common for brokers generate revenue by directing trades orders to market makers. Fidelity and Vanguard are two of the competitors that do not accept payments for order flow on equities. TD typically accepts $0.001 per share of equities and $0.50 for options. This is the average rate among brokers who accept PFOF.

• Stock Loan Programs:While TD Ameritrade clients are able to participate in a stock-loan program, they cannot choose the stock that can be borrowed. Brokers who lend shares to traders or hedge funds that short the stock often make a profit from the stock loan program.

• Price Improvement:TD Ameritrade reports a $0.0180 net price increase per share for orders between 1 and 1,999 shares. TD Ameritrade doesn't disclose the net price increase on options orders.

• Portfolio Margin -Qualified investors with a portfolio worth $125,000 or more might be eligible for portfolio margining. This can significantly increase their buying power compared to standard margin accounts. Portfolio margining allows clients to have lower margins and make more efficient use of capital.

Account and Research Amenities

TD Ameritrade offers all the analysis and research tools that you would expect from a large online brokerage. You have access to a wide range of screeners, calculators and charts as well as analysis tools. TD Ameritrade also offers innovative features such as the Social Sentiment tool, which measures social media trends.

Stock Screeners

Clients have the option to choose from 25 stock screeners, or create their own screens using parameters such fundamental metrics, sector valuation, performance, technical indicators, and other parameters. Because it is geared toward traders who are familiar with many technical and fundamental filters, the thinkorswim desktop platform offers a robust screening function.

ETF and Mutual Fund Screeners

The mutual fund and ETF screeners are similar to TD Ameritrade stock screeners. They offer a wide range of options, much like TD Ameritrade’s stock screeners. The last five screens can be saved for future use. You can also make these screens into a personal watchlist.

Only the Morningstar category gives clients the option to choose from over 100 different fund types, including large growth funds and alternative investment funds like real estate. Funds are available for investors who want to be exposed to certain regions or strategies.

Option Screeners

TD Ameritrade also offers an option-specific screener and a strategy builder. Spread Hacker and Options Hacker allow clients to create screens that are simple, detailed, and complex. There are many screening options available, including iron condors and iron butterflies, double diagonals and covered calls. For certain parameters such as volatility, expiration time, spread price and probability of profit, real-time data streams can be accessed in real-time.

Fixed Income Screeners

The Bond Wizard is a tool that allows traders to screen for fixed income. This tool allows you to filter individual bonds and CDs and create a bond ladder. You can also choose from pre-selected ladders.

Calculators and Tools

TD Ameritrade customers have access to a variety of financial tools and calculators. An Income Estimator, for example, helps investors determine how much income they can derive from a portfolio in a given time period. The Portfolio Planner, Retirement Calculator and Required Minimum Distribution (RMD), Calculators, as well as the IRA selection tool, are all popular tools. These are just a handful of the many options TD Ameritrade offers to help investors stay on top of their finances.

Charting

Charting is another area in which TD Ameritrade excels, especially on the thinkorswim platform. Charting tools that allow for customization of color, size, strategy and other parameters will be useful to both beginners and professionals. TD Ameritrade makes it possible to save and share charts, which adds even more value to this functionality.

Although trendlines and indicators can be added to the website, they are more difficult to set up than charts on thinkorswim. These features are less effective and more usable on mobile than desktop or downloadable versions due to spatial limitations. You'd be better off using the thinkorswim app to get the most out your charts.

Trade Idea Generators

Investors have access a wealth of market information and analyst reports to aid in the process of trading ideastion. You can access industry-recognized information from Credit Suisse and Dow Jones. The library offers extensive research and insight on industry, funds and other topics that can spark new trading ideas and help users make informed trading decisions.

News

Investors have free access to the TD Ameritrade Network and Dow Jones, Benzinga Midnight Traders, MarketWatch, various press release wires. Access to Yahoo Finance and Barrons as well as The Wall Street Journal are also available. CNBC segments can be integrated with the TD Ameritrade website experience to provide access to new streams and real-time market information.

Research by a Third Party

All platforms of TD Ameritrade offer charts at no extra cost, but the broker also offers daily market report and fee-based research. Clients can subscribe to premium Market Edge subscriptions at two levels. The first premium tier provides real-time commentary and reports. For $19.99 per month the second tier gives you full access to Market Edge's platform, research, screeners and commentary as well as tools and resources.

Cash Management

TD Ameritrade doesn't automatically transfer client funds to a money market fund. However, clients can opt into the cash sweep program for higher interest (currently 0.01%).

Fractional Dividend Reinvestment Plan - DRIP

TD Ameritrade offers a dividend reinvestment plan (DRIP) for clients who have dividend-paying assets. The DRIP doesn't use fractional shares. Any excess cash that is not able to purchase a full share of the DRIP would be returned back to your cash balance.

SRI/ESG Research Amenities

TD Ameritrade's platforms offer screening capabilities but they do not address environmental, social and governance (ESG), or socially responsible investing (SRI) criteria. Investors who seek both financial and social returns from their investments may find this a disadvantage.

Portfolio Analysis

Portfolio analysis can be done via TD Ameritrade website and thinkorswim as well as via Personalized, Selective and Essential Portfolios via TD Ameritrade Portfolios App. Portfolio analysis can be customized. The broker also offers the option to combine holdings from other accounts for reporting and analysis. Realized and unrealized gains/losses, net deposits and withdrawals are all reported in real-time. In real-time, account balance, margin, buying power and buying power data are displayed. Clients can also attach trade notes to orders before or after execution and keep a trading journal.

Capital gains reporting is available on the website monthly. Investors cannot calculate the tax consequences of future trades. TD Ameritrade also offers enterprise integration of GainsKeeper. This third-party tax reporting service helps to determine the tax consequences for trades. GainsKeeper can be integrated into their platform directly for clients without charge regardless of asset or activity.

Education

TD Ameritrade is the best broker in education, with its extensive and deep range of educational resources. Access to learning materials is available via a variety of formats and channels, including desktop, mobile, web, and cloud. You can search the extensive content library at the education center based on your investment goals, investment knowledge, or topic of interest. There are tutorials, podcasts and videos, as well as webinars and investment coaching.

The Immersive curriculum is a free, all-inclusive educational portal that offers clients the best in the business. The lessons break down trading concepts and investment strategies into smaller pieces that allow users to grow and learn at their own pace. The topics include fundamental analysis of stocks, income investing and trading options.

TD Ameritrade seamlessly combines education and technology to improve your learning experience. Based on your financial history and preferences, the site recommends educational material that is tailored to you. The site adapts the recommended material as you gain more knowledge about investing.

PaperMoney(r), a powerful demo account, is an excellent choice for new investors looking to gain hands-on experience. This feature allows users the opportunity to use thinkorswim's flagship platform as an investment simulator. You can gain market knowledge and improve your trading skills without having to invest real money. This tool can be accessed on any device, so it's easy to have this learning resource at hand.

Customer Service

• TD Ameritrade offers a 24/7 telephone support line.

• Clients can access account and trading support via phone, email, website and directly from trading platform.

• Chat support is also available through thinkorswim, where clients can talk live to a support representative without having to leave the app.

• TD Ameritrade clients have the option to speak with a live broker. However, fees may apply. Many of the TD trading desk staff who answer client questions are either ex-professional floor traders or market makers, or were trained by them.

• Clients can speak to TD Ameritrade financial advisers.

• Chatbox is made possible by Apple Business Chat, Meta Messenger and Twitter Direct Messages. In Asia, WeChat is used.

Reliability and Security

• Two-factor authentication can be used by clients for all platforms. It also includes a biometric fingerprint scanner, facial recognition, and biometric fingerprint scanning.

• TD Ameritrade offers $149.5 million in securities protection and $2 million cash protection through supplemental coverage from London insurers.

• TD Ameritrade will pay for any cash or securities that clients have lost due to unauthorized activity.

• TD Ameritrade reported no significant data breaches over the past four years.

• Due to the unprecedented volume of activity, TD Ameritrade encountered login problems across multiple platforms. This has affected some clients' ability log in during 2020.

• TD Ameritrade and several other brokerage firms experienced intermittent downtime on January 27, 2021. Users were unable to log in, view their portfolios or make trades. The downtime was likely caused by Gamestop stock ($GME), which surged in response to market turmoil.

Transparency

TD Ameritrade's pricing structure and fees are transparent. You can find information about fees, pricing and any associated costs in a separate area of the website. Prices such as those for setting margin rates may be updated more often than others, such transfer out fees.

Which type of account should I open at TD Ameritrade

TD Ameritrade has a wide range of accounts that can be used for a variety of investment goals. These are the accounts that you can open:

• Individual Brokerage Accounts

• Joint Brokerage Accounts

• Guardianship and Conservatorship Accounts

• Traditional IRA

• Roth IRA

• Rollover IRA

• SEP IRA

• Solo 401(k)

• SIMPLE IRA

• Pension or Profit

• Trust

• Limited Partnership

• Partnership

• Investment Club

• Limited Liability

• Sole Proprietorship

• Corporate

• Non-Incorporated

• Plans for Small Businesses

• Charitable

• Margin

Final Verdict

TD Ameritrade, a powerful brokerage platform, offers many attractive features. Both novice and experienced investors can access a solid selection of assets, trading tools, and educational content to help them choose the best investment approach. It's easy to find what your looking for with an intuitive design that works across all devices, including desktop, mobile and web. Excellent client support options enhance TD Ameritade’s reputation as a user-focused company.

Thinkorswim is the premier platform for investing. It offers unparalleled screening functionality, research capabilities and analysis. This already extensive experience will be enhanced by TD Ameritrade’s continued integration with Charles Scwhab. However, some investors may need to look for alternative solutions to trade cryptocurrencies directly or to use fractional shares. Nevertheless, TD Ameritrade's comprehensive platform makes it easy for investors to implement their trading strategies.