Hi, I want to roll over my old 401K account in to an IRA. I plan to do some frequent trading and some long term investment. Who do you recommend as a good broker for that? I currently have TDAM/TOS as my regular broker. TOS has a great platform for stocks and options but their high commissions are not really good for frequent trading. I am looking at IB for the IRA but am open for other suggestions. IB requires a minimum of $10 fees per month which appears to be one negative for it. I have not tried any other broker so far other than TDAM. Appreciate your suggestions. Thanks G.
Geek: First off I am a long-term IB customer. That said: I think TDAmeritrade charges $9.95 per order and TOS about $0.015 per share with a $5.00 minimum for stock trades and do not iunclude the SEC fee. IB charges $0.005 with a $1.00 minimum and includes the SEC fee. Neither TD or TOS charges for normal stock data feeds as best I recall. IB charges $10 per month for its stock feed and limits you to 100 simultaneous symbols including indexes like the Dow. Neither TD or TOS has inactivity fees. IB has a $10/month minimum activity fee. IB waives the data fee if you do $30 in commissions in a calendar month. The minimum activity fee goes away if you do $10 in commissions. Without getting into what you can make on available cash in your account which can get compicated ..... Estimate the number of trades per year you anticipate. Let's say you plan to trade 200 shares or less per trade and will trade in and out of three stocks per month. TD TOS = 3 stocks x 2 trades x $5 = $30 (+ SEC fees) = $30.xx IB = 3 stocks x 2 trades x $1 = $6 (+ $10 Inactivity + $10 data) = $26. TOS @ 5 stocks x 2 trades x $5 = $50 + SEC IB = @ 5 stocks x 2 trades x $1 = $10 + $10 data fee = $20 I'd do a yearly estimate as your activity will vary. If you plan on trading large size (number of shares per trade) then TD/TOS will look better but remember that IB is a direct access broker and I don't believe either TOS or TD are. Look up "payment for order flow." TOS customer service - Super by all accounts. ID customer service = Getting better but not known as IB's best point. Jack
Jack, Thanks for your detailed explanation. I am planning to trade options as well as stocks using about 40% of my account and the rest 60% for long term investment. Having said that there could be a month or two where there may not be any activity in my account. In such cases the worst case charge with IB I should look at is $20 ($10 inactivity fee + $10 market data fee). Is that correct? Or will the market data cost me more because I want to trade options as well? One of the major problem I saw with day trading at TD is you can't build and exit your positions in small lots with out having to pay huge commissions. (I was paying $7 for stocks and $0.75c for options). At IB it probably wont cost me so much but I have no experience with IB platform at all. I really like the TD/TOS platform for options trading. Appreciate your comments about the minimum costs and what basic market data I might need for options and stocks. Thanks G.
Geek: The IB data you want is called the US Securities and Commodities Bundle Non-professional Level 1. It includes market data for stock, options, futures and bond products on: AMEX, CBOT, NYSE, NASDAQ and OPRA. This is the $10 bundle. See https://www.interactivebrokers.com/en/p.php?f=marketData. You are correct about the charges. IB's fee for an option is $0.70 with a $1 minimum. Also read their policy on fees for cancellations and changes to option orders. I rarely trade options but I am familar with the TOS platform as a friend of mine uses it extensively. Much better for options than IB, at least that was true a few years back and I haven't looked at new features they've added since then. You might ask about IB's option capabilities in the Options thread here in ET. I'd suggest you download and play with the IB Demo http://www.interactivebrokers.com/en/p.php?f=tws&p=d&ib_entity=llc. It will get you acquainted with the TWS. Be aware that the demo uses canned data, not realtime or delayed realtime. TWS is a very large, feature-laden package, with many options. Read the Help and use Search. Some features are on by default and others must be activated so the help may say click on such and such and you cannot find it. If so, it is probably part of a feature you haven't turned on. If you do decide to open an IB account and do it via an ACAT transfer ensure that you do not trade in your old account for four days prior to your ACAT request. Having unsettled trades in the old account screws things up (or they did 5+ years ago when I moved mine to IB). I'd plan the transfer to take effect near the start of a month. All IB fees are based on calendar months, so starting an account and activating your data on the 30th would cost you $10+$10 for one or two days. I don't believe IB starts the account clock until an ACAT has been completed or money is received. Also be fairly certain that you won't need to close or open a trade during the week or so transfer period. ACAT normally works smoothly but no sense tempting fate. Finally, once you open your IB account, immediately open a paper trading account. It is realtime data and, except for executions which must be simulated, is very like your real money account. Its a better learning tool than the Demo. Jack
Fidelity had one of the original "easy" rollovers. I've used them several times to rollover 401ks when I moved jobs. Works great. Money management tools are much better than IB. If u are an active trader, IB has better rates but for casual clients, Fidelity has the better site.
Jack - I am trying to move my old 401K account into a Rollover IRA so I can manage it myself. Hopefully the transfer will be easier. Thanks for the advise on playing with paper money to get familiar with the platform. lwlee - I agree IB is not a place for casual trader. But i think IRA accounts typically have less to moderate trading activity and IB needs to accommodate that.
Geek: I think what you want is a "direct rollover." I've never done one. I'd call IB and ask for new accounts or funds and banking and talk to them. I agree with lwlee about Fidelity's money management stuff like checks, etc., but as you pointed out you are doing an IRA. Hopefully you will not need to touch it until you are retired. Jack