Barrons 2015 Ranking of Online Brokers - Barron's

8/14/15 10:39 PM

Dow Jones Reprints: This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any
article or visit www.djreprints.com
See a sample reprint in PDF
format.

Order a reprint of this article now

FEATURE

Barrons 2015 Best Online Broker Ranking

SPECIAL REPORT: Interactive Brokers, OptionsHouse, and TD Ameritrade are Barrons top brokers.
By THERESA W. CAREY
March 7, 2015

Methodology: How We Ranked Our Best Online Brokers

Tables: How the Brokers Stack Up
The Nasdaq Composite cracked 5000 last Monday for the first time since March of 2000, stoking reminiscences about sock puppets, Internet
follies, and 20-something day traders trying to get rich in their parents basements. Thankfully, these memories have mostly faded in the last 15
years. Unmentioned were fears about the Y2K computer glitch that was supposed to empty brokerage accounts and grab airplanes out of the
sky. It never came to pass, but the issue of computer security hasnt gone away.
Data breaches reached a record high of 783 in the U.S. during 2014, according to the Identity Theft Research Center, which tracks the figures. In
the highest profile case, hackers got access to personal information on 76 million households from JPMorgan Chase computers. There were
other attempts to steal data about customers of E*Trade Financial (ticker: ETFC), Citigroups Citibank (C), and TD Ameritrade (AMTD), among
other banks and brokers.

Ilustration: Scott Pollack for Barron's

In our preparation for the 20th anniversary of Barrons Annual Broker Survey, we still were a little surprised to see how high concerns about both
their accounts and their brokers data had risen on investors worry list in the last year. Although financial institutions are just a small target for
computer hackers generally, some respondents said theyre constantly worried that data such as Social Security numbers could be pilfered
outside the financial system and then used to steal their money from a bank or brokerage.
Barrons top online brokers of 2015 are trying to respond to these threats. Many devote space on their Websites to security issues. Charles
Schwab (SCHW) has launched a Security Guarantee for clients that promises to cover 100% of any losses in a Schwab account that occur due
to unauthorized activity. Firstrade Securities CEO John Liu says hes trying to weave security consciousness into his firms culture: We are
training all of our employees to be security aware, and that attacks can come from anywhere at any time. Liu notes that the highest-profile data
breaches are almost always the result of a lack of security-focused discipline in the corporate culture

http://online.barrons.com/articles/SB51367578116875004693704580502703510707706#printMode

Page 1 of 8

Barrons 2015 Ranking of Online Brokers - Barron's

8/14/15 10:39 PM

Among the initiatives the brokers and the Securities and Exchange Commission are pushing is the use of two-step verification, something half of
the brokers in this years review offer (for all the encryption and authorization features available, such as secure HTTP sites and extended
validation, see our How the Brokers Stack Up tables). In two-factor authentication, a customer receives a random number available for just a
minute or two that he or she has to enter, along with user ID and password, to log in. RSA Security, the company that makes most of the twofactor authentication devices in use, last year introduced SecurID Software Tokens that work with an increasingly popular trading venue, mobile
devices.
Brokers are putting new systems in place that monitor customers accounts for unusual behavior, or
for logins from suspect geographical areas. EOptions COO, Shawn Herrin, tells of a customer who
logged into his account from a library in Budapest while traveling. His user ID and password were
picked up by a bad guy using a packet sniffer that can detect unencrypted messages across a
network. The firms monitoring software was able to intervene and cancel a transaction before it
settled, but the incident prompted eOption to hire an outside firm to run a stress test on its entire
operation. They reported back to us on our vulnerabilities, and we fixed them, says Herrin.
Key to maintaining the privacy of your financial and personal data is your own behavior.
Scottrade is one of several firms that are providing more security information to clients. The basic idea, says Erik Merkau, senior vice president
of brokerage strategy and products, is to educate investors about remaining vigilant and checking their account statements regularly as well as
taking advantage of available resources, such as the ability to receive one free credit report annually from credit bureaus that can alert them to
problems.
Another possibility is limiting access to your brokerage account to just one device at a time, an option that Capital One ShareBuilder and
Interactive Brokers now offer. Thats one way to prevent outsiders from stealing your personal data.
ShareBuilder and Interactive Brokers also are among the brokers that will give you a read-only password, an idea supported by a Barrons
reader we contacted. These are helpful when youre using Websites such as SigFig or apps like Mint, which evaluate portfolio holdings and
transactions and try to provide you with financial advice and reports. Read-only passwords, which allow either an app or an advisor to look at
your account but not to make any changes, are still pretty rare for brokerage accounts. But if you think one might be useful, ask your broker to
add this service; squeaky wheels do get greased.
In a missive issued a month ago, the SEC put forth some common-sense recommendations: Use a strong password, create different passwords
for your various accounts, avoid public computers, and be careful with wireless connectionsincluding a wireless home network.
Some of the latest trends in online brokerage put even more stress on personal and brokerage securities systems. As noted last year (When All
Screens Lead to the Bull, March 17, 2014), mobile applications have proliferated so that you can connect with virtually any broker via your
iPhone, or an Android or Windows-powered smartphone as well as their related tablets. Late last week Apple (AAPL) disclosed that it new
mobile-payment system, Apple Pay, had been hit by a number of fraudulent transaction using credit-card data stolen from big retail chains such
as Home Depot (HD) and Target (TGT).
Brokers expect mobile to continue to grow, both in terms of trading activity and platform capabilities.
Increased adoption by consumers of more-powerful mobile devices, both phones and tablets,
means consumers will want more enhanced features and powerful trading tools only recently
available on the desktop, says Steve Claussen, chief investment strategist at OptionsHouse.
Charles Schwabs Kelli Keough, senior vice president of trading services, says, We expect to see
more firms providing traders with visual, synthesized information and a simple, easy-to-use work
flow with a consistent experience whether they are using a mobile app, downloadable software, or a
Web application.
We saw several excellent examples of responsive Web design this year. The intent is to adapt your
view to the size of your current device, whether youve got three monitors blazing away on your
desktop or youre peering at your account data on your smartphone. TradeKing, which is taking a
mobile-first approach to its site redesign, wants to create a similar experience with its services, no
matter which device youre using.
Investors continue to gain more confidence in Nasdaqs newest darlings, social-media companies. It has become an integral part of day-to-day
life for many of our clients, not just as a community for investors, but also as a way to share information and uncover useful investing insights,
says Steve Quirk, senior vice president of TD Ameritrades Trader Group. The broker giant has integrated Twitter into its platform, which tracks
social-media sentiment and tries to capitalize on its ability to share information via its thinkorswim unit. We believe these innovations can help
our clients become better informed investors and we will continue to leverage the power of social media as we develop new features and tools,

http://online.barrons.com/articles/SB51367578116875004693704580502703510707706#printMode

Page 2 of 8

Barrons 2015 Ranking of Online Brokers - Barron's

8/14/15 10:39 PM

says Quirk.
To pinpoint 2015s top brokers, we analyzed not just their security, mobility, and social media features but the depth of their investment tools
and their trading capabilities. Our primary consideration in judging these 18 firms is how they work for our readers, who are high-net-worth active
investors. Customization, especially of reports, is a particular focus, as is the ability to move smoothly from idea generation to a trade ticket. We
think its important for investors and traders to understand which of their strategies workand which need a little more work.
Consolidation continues to whittle away at the number of online brokers. Last years No. 2, tradeMonster, is now running successfully under the
banner of OptionsHouse (OptionsHouse Rebuilt, Feb. 2). Were happy to report that a former participant, Firstrade, which took last year off from
our review, has returned.
We decided not to include any of the 100 or so firms that utilize the Interactive Brokers platform as-is, a practice known as white labeling, which
meant we had to say goodbye to Place Trade and could not include newcomer ZacksTrade.
Still, a dozen-and-a-half online brokers make for a very competitive marketplace. The recent launch of zero-commission mobile app trading by
Robinhood Markets has sparked a lot of conversations, but no followers as yet. Theres no such thing as a free lunch, says Catherine Clay,
CEO of Livevol. She adds, Youll not find a nonprofit brokerage company. They will make their money one way or another.
Ram Subramaniam, president of Fidelitys retail brokerage business, says his firm looks at more than commission rates in its appeal to retail
investors. It also wants to offer customers price improvement on their trades so they are getting a better deal when they buy or sell securities. In
a recent study by Barrons (The Little Guy Wins, March 2), Fidelity ranked No. 1 by this measure. The firms retail customers saved $8.40 in
price improvement on average for a 1,000-share marketable order, which essentially makes their commissions net-negative. A free trade could
cost quite a bit if the broker is relying on payment for order flow rather than trying to create price improvement opportunities.
Regardless of their approach, online brokers do seem to be winning more business. Of the brokers who report customer activity, the number of
retail accounts grew by 5.1% between December 2013 and December 2014. Reflecting the overall market rise as well as account growth, assets
held at these brokers grew 17.8%. Total retail trades increased 9.4% across all asset classes for our group of brokers, showing healthy activity.
Mobile trades, which comprised 5.5% of all retail trades placed during December 2013, exceeded 7% in December 2014, a gain of 43.7%. With
Nasdaq and other exchanges all near or at record highs, the more innovative brokers in our list are enjoying more activity.
But lets see which brokers are doing the best job to deserve all this business. Three of them received 4 stars (out of 5) and sit atop this
years ranking. Interactive Brokers, No. 1 for the fourth year in a row, edged out newly launched OptionsHouse, in second, and TD Ameritrade,
third. These three firms offer very different online experiences and are meant to appeal to different types of investors and traders.
Recognizing the breadth of these styles, Barrons also identifies top online brokers in six categoriesfrequent trading, in-person service,
international investing, long-term investing, services for novices, and options tradingto help you decide where you should open (or transfer) an
account. We show the brokers that were at the extremes when we calculated the monthly cost of trading for infrequent traders, as well as for
those who trade multiple times per day. (Read about our methodology in How We Ranked Our Best Online Brokers, and review the seven
categories that informed our analysis in the tables: Barrons Online Broker Survey 2015: How They Stack Up.)
We have expanded our descriptions of each broker. These side-by-side comparisons allow you to see how numerical totals were arrived at and
stars awarded. You can see not only our firm grading for, say mobile offerings, but a breakdown of what specific mobile platforms an individual
online broker supports or whether the platform allows trading of foreign stocks, for instance. We start with our top, 4-star brokers and then
proceed to the rest, each grouped by its ranking.
Interactive Brokers, our leader, just launched its latest upgrade, Investors Marketplace. This new feature lets customers find advisors and thirdparty software thats connected to its platform. Current clients and the broader investment community can search the marketplace and easily
find a service provider to match their needs, while partner-service providers find the marketplace a more efficient way to advertise and reach
individual and institutional users worldwide, explains Steve Sanders, an executive vice president. Although the technology for registered
investment advisors is beyond our purview, Interactives is among the most complete and flexible for management of multiple accounts.
On the mobile front, Interactive redesigned its order-entry system, making it easier to place complex orders on a smartphone or tablet. It added a
suite of fundamental data and research reports, linked to trade tickets should a stock strike your fancy. Sanders estimates that mobile
transactions account for about 10% of retail orders, so the firm continues to look for enhancements.
For many years, Interactive was best known as a broker for international portfolios. More recently its pushed into new areas. In the past year,
Interactive expanded its mutual-fund product line, giving it more appeal for high-net-worth investors. If you have $100,000 or more in your
accounts at Interactive, the $10-per-month minimum commission charge is waived.
The firm also was among the first retail brokers to allow customers to direct orders to IEX, a new exchange designed to thwart predatory traders.

http://online.barrons.com/articles/SB51367578116875004693704580502703510707706#printMode

Page 3 of 8

Barrons 2015 Ranking of Online Brokers - Barron's

8/14/15 10:39 PM

Interactive has incorporated the bourse, lauded in Michael Lewis best-seller Flash Boys, into its smart-order router (How To Slow Flash Boys,
April 14, 2014). Its even connected to the Shanghai Stock Exchange in advance of U.S.-based trading there. Displaying its flexibility, Interactive
added a read-only password capability about two weeks after we mentioned it as a priority of readers.
New clients are introduced to the platforms capabilities in an extensive welcoming process, and are
encouraged to use the many videos on file in the Education Center. Interactive has added an Ask
the Experts Q&A Webinar series on topics such as its Option Strategy Lab and Volatility Lab, which
take place in a Google+ chat room. Customers submit questions in advance, which are answered
by senior management during the session.
Low costs are a key component of trading, and Interactives price-improvement statistics are
impressive. It also boasts the lowest margin fees in Barrons survey. We believe this is an
appropriate brokerage experience for intermediate to advanced investors and traders who want to
stay engaged in the markets.
Second-place OptionsHouse, also with 4 stars but a slightly lower score, boasts a platform that offers the sophisticated technology of its
recent merger partner, tradeMonster, at low commission rates. One feature, Trade Journal, is best in class. When you place a trade, you can
capture the market statistics and a variety of graphs, plus the type of options spread (if applicable) back to the journal in case you want to review
your underlying assumptions later on. This is a great idea for helping a trader figure out which strategies and market conditions work in ones
favor, and which ones need additional attention (or perhaps abandonment).
OptionsHouse also has a terrific alert system. New this year are Follow Alerts, which bring you news about companies in your portfolio or on your
watch list, delivered according to your specified methodpopup, mobile, or e-mail, among others. You can choose what type of news to receive,
say insider trades and earnings announcements, while filtering out those youd rather not see. Order-management tools allow you to nest
conditional orders to be triggered when pre-selected market factors are in play, such as a certain price relationship. They can also be triggered
when another order is filled.
The firms risk profiles, which help you understand the potential impact of a trade, have been enhanced with added choices for customization.
The OptionsHouse Website also lets you configure the appearance of up and down ticks throughout the platform. Do you want them to flash or
display in different colors? Its your call. A charting feature includes many new calculations, including some esoteric ones like Ichimoku clouds
(which can forecast price action) and Keltner channels (to determine whether prices are ranging outside of resistance and support relative to a
moving average).
OptionsHouse has adapted several features previously available only on its Web platform to be used on the go. The adjustTrade tool gives
clients the ability to adjust or close a position quickly, which is a remarkably easy way to roll a spread, or just close out a long or short position.
Through the Bid Ask Trading feature, mobile traders can quickly set up a spread just by tapping on any bid or ask price in an option chain.
Also meriting 4 stars is TD Ameritrade, for which we evaluated only its standard Website and its sophisticated thinkorswim platform.
Following its acquisition by TD Ameritrade, thinkorswim last year was relaunched with added charting tools and pattern-recognition capabilities. It
provides more opportunities for investors to share capabilities and experiences with others. You can send charts, scans, studies, or watch lists to
a fellow thinkorswim user.
TD Ameritrades Mobile Trader can find advanced orders (one-triggers-another, among many others) for clients as well as additional options
statistics. The charting tools were overhauled last year, and its tablet apps rival those of a desktop platform. Option scanning and trading tools
are also well designed and almost as powerful as the thinkorswim platform.
Our ongoing goal is to make it easier for investors to effectively manage their financial lives in the palm of their hands, says TD Ameritrades
Quirk. Included are mobile videos from CNBC and Thomson Reuters, and many custom filtering capabilities, as well as related news and
calendar events.
TD Ameritrades pricing is on the high end of the current range, but commissions are straightforward and without gimmick. In return, youll get
access to streaming data and analyst research that youre likely to be charged for elsewhere. Says Quirk, This simple and easy-to-understand
structure helps us fund the significant investment required to build and maintain a comprehensive offering for our clients that includes, among
other things, access to all of our trading platforms and mobile apps, multiple charting packages, third-party research reports, and valuable data
such as options time and sales and options statistics. Apparently this approach is working. TD Ameritrade set new records for daily average
revenue trades, total client assets, and net new client assets in 2014.
The following group of eight brokers each earns four stars. Their particular strengths vary a good deal, and one of them could be the right choice
for you.

http://online.barrons.com/articles/SB51367578116875004693704580502703510707706#printMode

Page 4 of 8

Barrons 2015 Ranking of Online Brokers - Barron's

8/14/15 10:39 PM

TradeStation serves the active trader market in a number of admirable ways. Clients trade, on average, 46 times per month and hold a large
chunk of investable assets with the firm. The $99.95 platform fee is waived for those with over $100,000 in household assets; there are also
trading minimums that give you access to the platform for free. With the support of parent Monex, TradeStation introduced three major version
upgrades and 19 updates to its downloadable platform, as well as 25 new releases for the Web trading and mobile trading apps.
The firm also has three pricing plans, aimed at different styles of trading; the most active traders migrate to the unbundled plan, with its pershare pricing. Those who understand market structure, and know whether they are makers or takers for a particular trade, can lower their
trading fees significantly. But the unbundled plan is not for amateurs.
When it comes to trading tools, the sky is the limit at TradeStation. Not only is the platform incredibly powerful, with numerous scanning and
analysis tools, but the TradingApp store allows customers to subscribe to over 800 products. TradeStation offers terrific tools to those who want
to develop a trading strategy based on technical and/or fundamental data, plus the ability to backtest it and improve it.
TradeStations reporting features, helping you learn which strategies are working and under what market conditions, are especially educational,
and help you improve your strategies. The Strategy Hound lets you run multiple strategies across a large number of stocks, returning a table that
details whether a strategy is successful or not. Strategy Hound is currently available for free.
You still cant use the mobile apps, which are now developed in-house, to design a trading system, but the firm is building one. All of the firms
education offerings are available outside the login, so non-customers can get a taste of the power of the platform.
Fidelity offers a powerful suite of tools that is designed to appeal to all levels of investors, and includes cash management and a wealth of
screening tools and third-party research. Its trade-routing engine seeks out price improvement for customers, and the firm tells us that an
average 1,000-share market order receives $8.40 in price improvement, paying back the $7.95 commission and some change.
A particular strength of the research available on the Web is the ETF Center, which gives you deep insight into a funds underlying holdings,
expenses, fees, and performance. Most ETF research lets you check out a funds top 10 holdings, but the Fidelity ETF Center offers a complete
list of all underlying securities for most U.S.-based ETFs. Theres an ETF Portfolio Builder, and a market tracker tool that displays trends by
sector and location in a colorful heat map.
Fidelitys Learning Center offers top-notch education and tools. Active traders can take advantage of the Trading Strategy Desk, which offers
coaching sessions on a variety of subjects with small groups of customers. You can find Webinars devoted to technical and fundamental
analysis, complex options strategies, and planning tools. The Portfolio Review tool helps define goals and portfolio rebalancing guidance, and
there are a variety of retirement and college planning capabilities. Premium services are available to those with over $250,000 in combined
assets, or who trade frequently. These allow customers to develop a one-on-one relationship with an account executive, as well as a personal
rate of return report. Premium customers using a Fidelity debit card have their ATM fees reimbursed.
New active trading customers can take advantage of the Onboarding Wizard, which helps set up a default trading layout and gets you over that
first hurdle. Trade Armor helps you set an exit strategy, similar to OptionsHouses tradeCycle, which is a great feature. Fidelity is a good allaround broker that can grow with most investors and active traders.
Merrill Edge is in its third year of investing in its platforms and in personal service, adding personnel to parent Bank of Americas branches. They
have a terrific suite of research tools free to customers, including Bank of America/Merrill Lynch reports. Customers who also bank with BofA will
see a more consistent look and feel across the two platforms.
The firm reworked the sites navigation features over the last year, making it much easier to move from one place to another. There is a pulldown
menu choice labeled, I want to that lets customers quickly find the more frequently used parts of the platform, eliminating quite a few mouse
clicks. The portfolio page can now be extensively customized, and you can generate a report every day that looks like a monthly statement, with
gains, losses, and balances displayed clearly.
The MarketPro tool has Recognia and OptionsPlay built in; you can trade directly from an OptionsPlay analysis screen. When viewing market
research for a particular stock, youll get a lot of information on a single page, including proprietary and third-party research, and real-time news.
Novice investors can take advantage of a variety of planning tools and education, including content from Kahn Academy.
Youll find streaming quotes on all platforms, including mobile. The tablet platform has a particular focus on retirement planning, including the
Face Retirement feature, which can be used outside the login. Try this one out if youre not afraid to see what you might look like in a few
decades.
OptionsXpress has added its Walk Limit order feature to the mobile platform, which lets you set up a spread trade at a particular limit price,
taking gradual steps toward a price that will execute. This is an incredibly popular feature both on the Web and on mobile, with usage nearly
doubling from year to year; the firms says that 85% of Walk Limit trade volume is now from repeat users.

http://online.barrons.com/articles/SB51367578116875004693704580502703510707706#printMode

Page 5 of 8

Barrons 2015 Ranking of Online Brokers - Barron's

8/14/15 10:39 PM

The broker has also added the Idea Hub to its mobile platform, letting you check out covered call, income generation, and futures trading ideas.
The All-in-One Trade Ticket, one of the easier ways to trade on any Web or mobile platform, also lets you set up advanced and contingent
orders.
OptionsXpress hosts a huge number of Webinars; last year it had over 15,000 attendees for over 240 events. Futures and futures options trading
has grown significantlythese two asset classes now comprise 20% of transactions for optionsXpressso youll also find a lot of education
features intended to guide you into that fold. Its possible that this is the last year well have optionsXpress as a separate brokerage for this story,
as features continue to migrate over to parent Charles Schwabs Website. We shall see.
E*Trade overhauled its Website and mobile apps, vastly reducing the number of clicks it takes to get from one spot to another. Both Website and
mobile experiences are among the more customizable setups we saw this year, a most welcome change. Kunal Vaed, an E*Trade vice
president, says, Our guiding principles for the redesign were: intuitive, hassle free, helpful, trusted (touch ID on smartphone), engaging,
insightful, personalized, and seamless.
E*Trade offers an account application that you can start on mobile, and finish on a Website (or vice versa) as the data is stored on its servers.
New customers are invited to attend in-person events in New York, San Francisco, or Chicago, or check out the New to Trading track on the
education page.
The Pro platform added streaming options Greeks, and when setting up a trade, the midpoint between bid and ask is preloaded as a limit price.
Youll also find a strategy risk analyzer and a great options screener. The trade ticket lets you pull in a canned strategy, such as a butterfly, or
create your own. As you add a leg to the ticket, the risk graph is updated with streaming data to let you analyze the potential trade.
Those who are not yet E*Trade customers can check out a lot of the tools and education content; quotes are delayed, but you can get a feel for
what is possible. Its great to see E*Trade rethink its entire navigation scheme, both on the desktop and on mobile. In the past, it often felt as
though new features were just tacked on. Its a much smoother experience now.
E*Trade continues to cling to a tiered commission structure, however, and it is among the highest cost brokers in the review.
Livevol is a fascinating platform for the very active options trader. Skip to the next broker description if thats not your game.
The firm added futures and futures options trading last year, and built new risk charts for single positions and for total portfolio risk. Youll find
measurements of volatility, sliced and diced from a dizzying array of views. Orders can be staged, and a basket of orders can be launched all at
once.
The extremely customizable options strategy scanners are the heart of this platform. There is a covered call scan that shows the top four by
sector based on yield and call-away return, which includes dividends.
This is a very agile development company. CEO Clay says that 40% of LiveVol employees are engineers, who are constantly creating new
products that are rigorously tested before theyre released. Costs are relatively low and are executed and cleared through Interactive Brokers.
TradeKing also earns four stars. Its new platform, launched in November and still being rolled out across the customer base, was developed
with mobile in mind. Active traders can fully customize the experience to fit their needs, using various widgets and placing them where they
work best. Customizations are stored on TradeKings servers, so you get the same experience no matter which device you use to log in. The
responsive design quickly resizes your view depending on the size of your monitor or device.
Anywhere you go on the Website or app, you can easily pop open a trade ticket, which rolls out across the right side of the screen. Options
traders can set up the desired strike range and expiration dates using a slider bar on the top of the quote screen. Pretty slick.
There are quite a few connections to social media throughout the platform as well. A Twitter feed built off TradeKing customers so-called
cashtags are built into the news feed. TradeKing recently acquired Trader|OS which is now operating under its TradeKing Media subsidiary,
which will generate trading ideas on curated TradeKing channels. Options guru Brian Overby will have his own channel. Don Montanaro,
TradeKings CEO, explains: The idea is to instantly collaborate with people on that channel. Share live charts and news items, engage in live
chats, and share watch lists among the community. Theres even a live order ticket capability.
Charles Schwab rounds out our list of four-star brokers. Tools from its acquisition, optionsXpress, continue to make their way over, including the
excellent All-in-One Trade Ticket and Idea Hub on the Website. The active trader platform, StreetSmart Edge, is extremely customizable, while
mobile usage is growing rapidly. The firm says its seeing more trading activity from those who use mobile their trade activity increases by
about 20% once they are engaged.
Schwab continues to offer in-branch workshops; regional managers hosted more than 2,600 events and conducted more than 3,000 one-on-one,
in-person consultations in the last year. The Schwab Trading Services Live Online Webinars, 464 in number, reached 12,000 live attendees and

http://online.barrons.com/articles/SB51367578116875004693704580502703510707706#printMode

Page 6 of 8

Barrons 2015 Ranking of Online Brokers - Barron's

8/14/15 10:39 PM

have been popular as playbacks as well.

Commission-free ETFs now total 198, and the entire universe of mutual funds is available for trading. Schwab is also continuing to build out its
multi-leg options capabilities in advance of the eventual folding in of optionsXpress; you can now trade four-legged options on the Web platform
and in StreetSmart Edge. As Schwab builds out its options capability, the firm enhanced trade and probability calculators, and launched a new
daily market commentary series that focuses on options.
We dont have any 3 star brokers this year, but we did find three brokers who merit three stars.
Scottrade worked over the last year to expand its online capabilities, and enhanced its equity, ETF and mutual fund screeners. The Portfolio
Review Tool was beefed up, and can be used independently or in conjunction with an investment consultant in a branch office. Active traders
can access the ScottradeELITE platform, which allows basic (single leg) options strategies.
The Elite platform was updated with more customization possibilities and a streamlined order-entry system. You can add notes on watch lists,
and options analytic tools were added to help traders play with potential scenarios.
We remain confused by Scottrades approach to complex options trading, however. For the last few years, those who wanted to trade multi-leg
strategies had to use a separate platform powered by OptionsHouse. That deal is being phased out in favor of a white-label implementation of
the Interactive Brokers platform. We have not seen this live yet, but find it a little strange to require a separate account for multi-leg options
trades.
Lightspeed Trading is aimed at extremely active traders, hedge funds, and institutions. These peripatetic traders can use the proprietary
platform to trade equities, complex options, and futures from a single screen. All quotes are streaming, and customers can automate a trading
strategy. Traders also control the order-routing logic, and direct orders to multiple market centers for better execution. They can also take
advantage of Lightspeeds newly introduced smart route, which offers lower execution costs.
Our wide-ranging ranking criteria are not geared toward such a focused offering, especially since the firms mobile app was not yet available
when we were wrapping up the calculations. I suspect Lightspeed will move up in the rankings once we can get our hands on the mobile app.
Sogotrade integrated OptionsPlay into its platform, including a way to open a pre-filled trade ticket from the ideas generated. Multi-leg options
traders will appreciate the single charge plus per-contract charges; most brokers apply a base charge per leg to complex options trades, which
can make them more expensive.
Investment support was a focus for the firms development over the last year. Customers can elect to receive the firms Morning Call report,
which is based on institutional grade research using technical indicators. It gives customers both trading ideas as well as education on the
various indicators used. There is a Stock Analyzer on the Website that displays rating reports and a variety of fundamentals, plus a look at the
shares industry sector. This feature would be much improved by an ability to automatically add a stock to a watch list; at present, customers
must do that manually.
Another little issue is that watch lists are all stored locally, so if you set one up on your desktop, you wont be able to see that same watch list on
your mobile device unless you go through the trouble of recreating it there.
Our final group earns 2 stars. These are brokers with particular niches; one might fit your style.
TradingBlock took on the full-service brokers released by tradeMonster following its merger with OptionsHouse, integrating them into its
MoneyBlock platform. Individuals can use their TradeBuilder strategy scanner, which takes an investors most basic outlook for an equity or ETF
and ranks the top 40 options strategies by potential profit or loss, and the strategys probability of breaking even or better. Investors can compare
strategies to buying the stock long or selling it short. The Trade Analyzer feature graphs a strategys P&L over a range of prices, dates, Greeks,
and volatilities.
Another feature, Portfolio Hedger, scans for collar strategies to protect existing stock or ETF positions. Investors can also enter underlying
symbols to model possible collar strategies on theoretical or held-away or positions, and rank them by cost or upside potential. For an additional
fee of $199/month, customers can make use of EdgeFinder, which is a real time customizable strategy scanner. Most of what is possible with
EdgeFinder can be found on other brokers Websites for no additional charge, but the intriguing component here is the ability to find mispriced
contracts, which can result in more profitable trades.
The site itself is fairly basic, and portfolio analysis is limited.
Firstrade returns to the survey this year after taking a year off for a site rebuild. New to the suite of services is a mobile app, which was
developed in-house and features streaming quotes. There are basic charting capabilities; a pending update will add 70 or more technical studies,
but it was not available for the survey.

http://online.barrons.com/articles/SB51367578116875004693704580502703510707706#printMode

Page 7 of 8

Barrons 2015 Ranking of Online Brokers - Barron's

8/14/15 10:39 PM

On the Website, much of the development effort went to options trading. While looking at an options quote screen, clicking on a bid or ask
populates a trade ticket and builds your strategy. The order status display has an interesting meter feature that shows the status of the order fill
graphically. Another feature added this year is the ability to edit an open order rather than having to cancel it and replace it with a new order.
The stock screener is easy to use; you can choose from a predefined screener or create your own. Most stock screeners show how many stocks
fit your current criteria, but the Firstrade screener displays the top results as you go. Clicking on a symbol brings you to a page where you can
get additional fundamental details, or place a trade.
This is a much better implementation of the Website, which can be translated to Chinese with a click. Fees are reasonable though the
experience is still pretty basic compared to competitors further up the list.
Capital One Sharebuilder, a unit of the big bank Capital One, has added features that help you understand your portfolio allocation. This is a
nicely designed, very secure Website with reasonable mobile planning tools that is hurt in our ratings scheme by the limited range of assets you
can trade online.
This broker was built on the idea of automatic investing. Set up dollar-based investments, say $100 per week of Google stock (GOOG), and it
executes on a weekly schedule. When you exit the position, you can place a regular limit order. The Portfolio Builder tool is one of the original
robo advisors, and walks you through a quiz to determine your ideal asset allocation. Then you can choose from a variety of ETFs that fall
within each asset type.
One of the most helpful features is True Value, which can show you concentrations of stocks and sectors in your ETF and mutual fund holdings.
You may think youre diversified by holding a portfolio of ETFs, but its possible youre not. The IPO Center lets you queue limit orders the day an
initial public offering is priced, so you can get in on the secondary action quickly.
Sharebuilders mobile tools are nicely laid out and easy to use, which has paid off with a large uptick in mobile-originated trades. It doesnt offer
streaming quotes, though; youll have to refresh the screen to get updated prices.
eOption rounds out our list this year. Its Web platform is white-labeled by Scivantage and very basic. The firm has, however, recently integrated
the OptionsPlay tools into the platform, and vice president Herrin says, Our clients are using OptionsPlay, and were very excited to offer it.
Their newly launched mobile offering, also by Scivantage, displays your watchlist before you log in so you can get quotes on the fly. Those
quotes are delayed, however; youll have to log in to get real-time quotes.
This broker offers low commissions that make frequent option trading more cost-effective. Herrin says eOption is working to enhance the front
end of its platform; we look forward to seeing how those efforts pan out.
Before you log in to any of these sites, you might want to change your brokerage password first, just to be safe.
E-mail: theresa@twcarey.com
Copyright 2014 Dow Jones & Company, Inc. All Rights Reserved
This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please
contact Dow Jones Reprints at 1-800-843-0008 or visit
www.djreprints.com

http://online.barrons.com/articles/SB51367578116875004693704580502703510707706#printMode

Page 8 of 8