Thinkorswim Online Discount Broker Review

A long-standing industry leader in software solutions for options traders, thinkorswim took Barron’s #1 rank among online discount brokers this year. Thinkorswim (now a subsidiary of TD Ameritrade) comes with a comprehensive array of services, from all manner of market orders, to mutual funds, and even currency trading. Trading with thinkorswim’s A+ technology comes with middling fees but for frequent traders, and particularly options traders, the industry middle fees could be a bargain for lightning fast trading technology.

Types of Accounts

Thinkorswim offers individual, joint, corporate, and trust and custodial accounts. In addition, they offer a full range of retirement accounts, including Traditional and Roth IRA and 401k accounts.

Commission Structure

Thinkorswim offers share trading at $.015 per share ($5.00 minimum) or a flat fee  of $9.95 per trade for market or limit orders with a maximum of 5,000 shares. Using thinkorswim software and web-based trading tools, users can set a default commission selection, or change the rate for a particular trade. (Any trades below $9.95 are automatically charged the lowest rate possible.) Mutual fund trades are a great low-cost choice at thinkorswim if kept to low quantities. Thinkorswim offers three free mutual fund trades in any calendar month. Additional mutual fund trades cost traders $15. For futures traders, thinkorswim trades futures at $3.50 per contract. Options on futures trade at $3.00 per contract. (Both prices include exchange fees.)

Trade Execution

As our readers know, execution speed can have a major effect on the success of trading. Thinkorswim execution, with the exception of options trading, is all electronic. For listed stocks, trades are executed using the New York Stock Exchange SuperDot system. NASDAQ orders are routed to the electronic network with the best market, and options trades likewise go to the exchange with the best market. Barring extreme market conditions or exchange technology issues, transactions and confirmations take less than a second.

Customer Service

In weighing online brokers, customer service is of paramount importance, particularly for new investors, or even old hats new to online trading. Thankfully for those considering thinkorswim, shifting your account there doesn’t come with a compromise in service. Customer service at thinkorswim was recognized by Barron’s with a 4.8 rating, #1 among online discount brokers. Users of thinkorswim agree that the broker’s telephone support is easily accessible, and that thinkorswim frequently listens to customer feedback and implements desired changes.

Other Reasons to Consider thinkorswim

First, a transfer from your current broker won’t cost you a penny. Thinkorswim will cover up to $100 of your current broker’s transfer fees, and then give you 30 days to test their product and transfer back if unsatisfied, free of charge. Frequent traders get another reason: thinkorswim will rebate the cost of your high-speed internet (up to $39.95 monthly) if you make 40 or more trades in a month.

If short selling is a part of your investment strategy, you should give a thinkorswim a close look. If you buy to close a short individual or single leg option for .05 or less, thinkorswim won’t charge a commission. Options traders likewise take note: option trades bear no minimum orders.

Regardless of your investment strategy, thinkorswim offers some services you just can’t ignore: calling the trade desk carries no additional fee; every client receives all software and live data free of charge; and, thinkorswim IRA accounts come with no annual fees. Finally, if you want to stay connected and be able to place mobile trades, you’re in luck. If you use a Blackberry, iPhone (seen below), or device with Windows Mobile, thinkorswim’s technology will follow you on the go.

Overall, thinkorswim competes well with other discount brokers in the industry for the standard user. However, their fee schedule and technology might edge them past the pack if you’re an options trader, or a mutual fund investor who makes minimal transactions.

Published or Updated: February 27, 2012
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. hope Eno says:

    Can I trade from Africa or Nigeria? thank you.

  2. Jeffrey Lin says:

    We just did a quick video demo of the thinkorswim mobile APP for Android for those who don’t have an Android phone but curious. http://marketheist.com/?p=3121

    It’s pretty much like the iPhone thinkorswim app but the options chains and charting functions are a bit better. Hope your readers who are interested in the Android or who are thinkorswim clients can get something out of this!

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