TD Ameritrade Review
  • Commissions
  • Trading Platforms
  • Mobile Trading Platforms
  • Education and Research
  • Executions and Routes
  • Ease of Use
  • Customer Service
4.3

Summary

TD Ameritrade is one of the most popular discount brokerage firms in the United States, falling on the pricier side in regard to commissions. While it is easy for a trader to commoditize brokers and choose the cheapest option, there is merit to Ameritrade’s high commission fees at $6.95 per equity trade.

About TD Ameritrade

TD Ameritrade is a publicly traded brokerage firm trading under the ticker symbol AMTD. In the trading world, Ameritrade is best known for their acquisition of the coveted ThinkOrSwim trading platform. The platform is one of Ameritrade’s main selling points for its higher fees relative to the industry.

Founded in 1971, the firm slowly grew into the behemoth it is today, playing a role in many key innovations in trading history. They were the first company to offer trading over the phone, and among the first brokers to offer online trading. Along the way they acquired various fintech and brokerage firms to help solidify their standing as a dominant force in the brokerage industry.

The Financials

Account Minimums

At this time there are no minimums for opening a cash account. Margin and options trading accounts require a $2,000 minimum deposit.

They offer bonuses for funding your accounts at higher levels, usually in the form of free commissions. The bonuses for brokers are constantly changing, but here are the current bonus offerings by Ameritrade:

TD Ameritrade Special Offer

Commissions

Here is the commission structure for TD Ameritrade

Equities

$6.95 per trade

Options

$6.95 + $0.75 per contract

Futures

$2.25 per contract

Forex

$0.10 per 1,000 units

Margin Interest Rates

Base Rate: 8.25%

Dollar Range

Above/Below Base Rate

Above $999,999

-1.50%

$250,000 – $999,999

-0.75%

$100,000 – $249,999

-0.50%

$50,000 – $99,999

-0.25%

$25,000 – $49,999

+0.75%

$10,000 = $24,999

+1.00%

Under $10,000

+1.25%

Additional Fees

TD Ameritrade charges no fees outside of their commissions and margin interest. They do not charge for the use of their trading platforms, market data, quotes, news, or anything else. The lack of software/data fees is a huge selling point for Ameritrade as they offer one of the best software packages in the industry.

Trading Platforms        

Offerings

TD Ameritrade has a suite of trading platform offerings open to their clients. They are:

  • TD Ameritrade Web Platform
  • Trade Architect
  • ThinkOrSwim
  • TD Ameritrade Mobile App
  • ThinkOrSwim Mobile App

TD Ameritrade Web Platform

The TD Ameritrade Web Platform is surprisingly versatile and offers a lot for an average broker web client. That being said, it’s a nightmare for active traders and clearly is for casual investors or quick orders when ThinkOrSwim just crashed.

Here is a layout of the homepage

Ameritrade Homepage

I like how easy it is digest a wealth of information at once with the web platform, Ameritrade uses the real estate of one page very effectively, making it almost never necessary to click off the front page.

In one glance, you can see how your positions are doing, compared to what the market is doing (allowing you to immediately gauge how much of your returns are beta or alpha), as well as an economic calendar and news wire. This page allows for the swing trader or investor with a 9-5 to quickly spend under five minutes in their broker dashboard to see what their positions and the marke has done.

Trade Architect

Trade Architect is Ameritrade’s slightly more sophisticated web platform. It runs on Adobe Flash and features a number of impressive features for a web platform. It’s ticker analysis box includes a modest charting package which allows you to trade from the chart, streamlined analyst consensus, headlines, an option chain, and my favorite: level 2 quotes with time & sales, allowing you to see market depth from your browser.

In addition to researching individual stocks, the platform offers live CNBC programming, stock & options screeners, watch lists, and account summaries.

Trade Architect

ThinkOrSwim

It’s hard to do such a legendary platform justice. Co-founded by Tastytrade’s Tom Sosnoff and acquired by Ameritrade in 2009, ThinkOrSwim has risen the standards of trading platforms across the industry. Sosnoff talks about the importance of presenting a lot of complex data in easy to interpret, visual form. He’s expressed that the lack of condensing and simplifying complex data is one of the main hindrances on individual traders against institutions.

ThinkOrSwim, at an annual price point of $0.00, offers an elite suite of research tools for traders and investors. Just about everything you need when trading is located within ThinkOrSwim, and a whole lot more.

TD Ameritrade has teamed up with a multitude of fintech companies to integrate their tools within TOS, the main point being simple visualizations, like the above. This is the true beauty of TOS, it allows you to get a picture of a company in under a minute. Having a casual conversation with another finance friend about a company you both like? It will take under a minute to pull this screen up, so long as TOS is running on your computer.

ThinkOrSwim is one of the few platforms that has their own proprietary scripting language, thinkScript, for the charting package. You can program your own indicators and strategies within this simplified programming language.

Some of the strongest features within TOS are

  • Stock Hacker stock screener: One of the most advanced stock screeners on the market. It’s extremely customizable, scratching the itch of many traders looking for a screener that does a very specific scan.
  • Fundamentals ProfileThis chart gives a simple, clean rundown of the fundamentals of a stock.
  • Active TraderThis screen allows you to quickly send and edit orders, interact with the market depth, and quickly manage your exposure with “Reverse” and “Flatten” buttons, allowing you to quickly take the other side of a trade, or sell all of your positions.
  • Flexible GridSimple charting feature allowing you to grid charts in whichever order you like
Think or Swim Stock Driver

“What Drives The Stock” screen within Analyze > Fundamentals

ThinkOrSwim Active Trader

Active Trader screen with Heiken Ashi and Market Depth

TOS Flexible Grid

Flexible Grid screen with market internals

Stock Hacker

90078eba26c751a0cdb94d395b155dcb.png
Stock Hacker screening for stocks

Thinkorswim Mobile App

In addition to the desktop platform, Ameritrade offers a ThinkOrSwim mobile app. They’ve managed to retain the same feel of the desktop platform, featuring many of the same functions.

The ticker analysis screen features five tabs on the iOS version, and four for the Android version:

  • Chart: An easily interactable chart, allowing for countless indicators and oscillators. Very impressive for a mobile charting package.
  • News: Standard curated headlines
  • Options: Full option chain with volatility information 
  • Depth (unavailable on Android): Level 2 data with visual bid/ask sizes
  • Profile: Only visible for larger stocks, shows visualized fundamental data like revenue by product.

Think Thinkorswim app is virtually everything you need for placing a trade on the go.

ThinkOrSwim Mobile

TD Ameritrade Mobile

The TD Ameritrade Mobile app is much simpler than the thinkorswim app, featuring three tabs: Quotes, Research, and Accounts.

Quotes

The Quotes screen features a watchlist, charts, news, options, and ETFs relevant to the stock.

Research

The Research tab is impressive at utilizing the real estate of a smartphone screen. Within 1.5 pages of scrolling space, it includes

  • Top headlines of day
  • Indicie quotes
  • Technical overview of indices
  • Economic events of the day (Earnings, dividends, splits, IPOs)
  • Top & bottom sectors of the day
  • Six buttons featuring:
    • News
    • Calendar
    • Sectors
    • Indices
    • Movers
    • Videos

Accounts

This screen shows an overview of your brokerage account balances, positions, orders, history and documents.

Research Tools

Investor Movement Index

The IMI is Ameritrade’s proprietary investor behavior indicator designed to estimate the sentiment of retail traders/investors. Ameritrade mines the data of their 6 million funded accounts to find trends and tendencies in holdings, trading activity, and other data. In attempt to reduce bias, they only include accounts that have traded recently and treat accounts equally, regardless of their capital.

Investor Movement Index

Trade Ideas

Ameritrade curates various newsletters and model portfolios by firms like CFRA, ARGUS, Market Edge, and Predict Wall Street, for all of their clients.

ARGUS – Market Movers

Market Movers is a daily newsletter written by ARGUS about the short term technicals and sentiment of the market, attempting to explain recent moves.

PredictWallStreet

PredictWallStreet is a community sentiment indicator. Investors share their opinion about a stock and the data is used to provide sentiment and forecasts about a stock.

Predict Wall Street

Market Edge

Market Edge provides a number of indicators and research including their On The Edge newsletter, Idea Generator, and Second Opinion Weekly.

The Second Opinion allows you to type in a ticker and receive a wealth of technical information like an algorithmically-produced written summary of the technicals, estimated support & resistance levels, and a suggest stop loss.

Market Edge

CFRA

CFRA offers a multitude of model portfolios and newsletters. Some of their portfolios include Fair Value, a value investment portfolio, and STARS, a portfolio based on their proprietary stock ranking algorithm. Newsletter wise, they offer Technical Market Insight, Word on the Street, and Market Movers.

Analyst Reports

In addition to the subscription data, they offer access to analyst research reports. They include reports from the following firms:

  • TheStreet.com
  • ResearchTeam
  • Ford Equity Research
  • Vickers
  • Market Edge
  • CFRA
  • Credit Suisse

ameritrade analyst reports

Order Execution

Selling of Order Flow

Like most discount brokers nowadays, Ameritrade sells their clients’ order flow to market maker firms, so that the market makers can get first access to that liquidity. This provides no value to the client and many call it a break of the broker’s fiduciary duty to their clients.

Direct Routing

Ameritrade offers their clients the choice to select the route to send your order, giving you the ability to send direct orders to the market makers/ECNs that allow for it.

Lack of Direct Market Access

Ameritrade is not a direct market access broker. Your order is sent through the internet to Ameritrade. Direct access brokers (such as SpeedTrader) allow traders to route the orders directly to the market, which can improve execution speed and fills. That said, this type of feature will be overkill for beginner/intermediate traders.

Borrowing and Locating Shares for Shorting

It is easy to borrow most large and mega cap stocks at Ameritrade but they offer no significant advantage in locating shares. It’s rare that the trending penny stock of the day/week will be available to borrow. When a stock’s shares are hard to borrow, you often have to call Ameritrade and ask them to locate you the shares, which can be hit or miss.

Customer Service

TD Ameritrade has garnered a reputation for excellent customer service. They offer 24 hour email or phone customer service. Anytime I have experienced an issue, a simple live chat or phone call cleared the issue up in minutes.

What Type of Trader is TD Ameritrade Ideal For?

TD Ameritrade stands out as one of the top discount brokers for traders of a wide range of skill levels. The company rivals ETRADE for the spot of #1 discount broker and is much preferred over Scottrade.

TD Ameritrade has a great suite of trading tools and ThinkOrSwim is one of the top trading platforms for technical traders. This is a great broker for traders of all skill levels and styles.

Pros & Cons

Pros

  • Probably the best and easiest to use retail trading platform on the market
  • Diversity of services offered. You can do almost everything through Ameritrade
  • 24 hour customer service
  • Overwhelming research offerings

Cons

  • High commissions relative to their industry
  • They receive payment for order flow
  • Offer no advantage over other brokers in borrowing shares to short

Summary

TD Ameritrade is an excellent, all-in-one, big-box broker offering just about all types of securities for trade, and a great set of tools in the form of platforms and research. Most traders and investors would be served well using Ameritrade for most of their trading.

Ameritrade is like the Amazon of stock brokers, they offer almost everything in one place, in an easy to navigate and easy to execute fashion. However, due to the nature of their broad approach, there are lots of niche operations doing specific affairs better than them.

If you’re a day trader, algorithmic trader, short seller, or under-capitalized trader, there are better brokers out there for you. These are not the areas that Ameritrade exceeds in.