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I looked at a few sites, particularly at Gomez's top 10 brokerages ranked by
overall cost. Ameritrade seems to be a better place lately, so the advantage
of moving may be somewhat diminished. In addition to American Express, I
thought Financial Cafe, and R. J. Thompson Securities seemed like strong
possibilities for us as well.
One reason was the price of limit orders. Placing limit orders is not
something we've done a lot of, but could be important. Here's an example:
We decide to buy 10 sh of eWidget Corp.. The going price is about $100. We
have $2000 in our brokerage account. If we place a "market order" for 10
shares, that means we'll buy those shares at whatever the market happens to
be at the instant of execution. The price of a volatile stock could spike up
10% to $110 - for just a few seconds, and we'll pay and extra hundred bucks.
If we set a limit order, we can state the price: buy 10 shares at $100 (or
less). This could mean a lot more than the difference in price of
commissions. Note: often, we're spending all the cash we have in the
account, in which case we could sort-of fake a limit order (in the above
example, but only $1000 in the account, if we place an order to buy 10
shares, the order could not go through until or unless the share price was
less or equal to $100).
Limit orders have benefited HPD already: Our original purchase of CHKP was
for 13 shares. The (pre-split) price at the time was ~165ish. We had in the
account enough to buy maybe 12 15/16ths shares. I placed a limit order at a
price that would get us that 13th share, and waited for the market
volatility to come to our price. It did within an hour or so, and that extra
share has split 2:1 and returned over 100% in 6 ˝ months.
Here are some data for Ameritrade and other brokers (market and limit
commissions; reported web speed; and comments - all per Gomez.com, and all
as they apply to HPD's portfolio size and buying patterns):
Ameritrade: mkt: $8; limit:$13 (? thought it was 8 when I did it); speed
good; comments: okay to good
American Express: mkt: $0; limit:$19.95 speed ok to good; comments ok to bad
- mostly angry at new fees
Datek: mkt: $9.99; limit:$9.99; speed good; comments ok to poor (bad ones
mostly one spammer, tho)
Firstrade mkt: $6.95; limit:$ 9.95; speed fair to poor; comments mostly good
Financial Café mkt: $0; limit:$14.75; speed not posted; comments good (but
no overall rating)
RJ Thompson mkt: $5; limit:$5, speed:ok; comments: good to excellent (but
based on 3 ratings)
Another consideration is stablilty. We all know AmX, and have few concerns
about them being around in a few years. Financial Café looks great, but it's
a relative newcomer.
One last thing: some of these brokerages offer "tax-lot accounting" Joe - is
this anything we need? I'm guessing no, it seems to be for hyperactive day
Just stuff to consider; things that make you go 'yaaaawn'
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