* TD Ameritrade…Nothing For Nothing!
* TD Ameritrade…Nothing For Nothing!
Recently got this e-mail from reader AFR
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Hey Jeff,
I recently opened a new online brokerage account with discount broker TD Ameritrade. Had to put in $2,500 and got 500 free ($9.99) trades good for 60 days. If I’m figuring this correctly, TD gave me $5,000 worth of trades for free. I’m not a big trader, maybe I trade 2- 3 or times a month (which would be 4- 6 trades buy-sell, total). Seems like a good deal for me and especially for day-traders. Thought you might like to pass this one onto other readers.
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Here’s Jeff Eat’s response.
AFR:
Just had a chance to read your e-mail.
If you are a DAY TRADER “on its face” the deal sounds good.
If you are just a casual trader, just think…assuming 30 days in a month, you have 44 days from the day you open the account to use all of those trades. That means you would have to make on average 11.36 trades per day to use up all of the free trades.
In your case, if you execute 4-6 trades a month the fees would be 40-60 bucks…figure 2- months and TD Ameritrade is giving you the grand total of $80- $120 in free trades. Not bad, but a far cry from the $5,000 that “initially” hits your eye when you see its 500-free trades’ advertisement. By the way, I didn’t check, but I’ll bet you have to keep that original $2,500 in your TD Ameritrade account for a certain period of time.
TD Ameritrade (unless you are a real Day Trader) really isn’t giving you as “big” a deal as it initially appears at first glance.
Just so you know, Jeff Eats has had a TD Ameritrade account for a number of years. Long ago, I negotiated an online commission rate far-far lower than the $9.99 you are paying.
Over the years, TD Ameritrade on the whole-got the job done for Jeff Eats…that said,
I will tell you, that over those same years- many of TD Ameritrade’s phone reps/supervisors gave me WRONG INFORMATION about various ‘things” in my account—so, just a word to the wise, keep a close eye on your account and don’t take what TD Ameritrade tells you as being gospel. Jeff Eats will also tell you, that on more than one occasion TD Ameritrade’s online trading system contained incorrect information/and other times the entire system “crashed” and couldn’t be accessed.
Good luck with your trading…