TradeKing Review - How to Trade Options

Have You Heard About TradeKing?

One of the first features about TradeKing that appealed to me was the low brokerage fees they offer. At only $4.95 per trade plus 65 cents per option contract, it looked a very good deal. This would mean for example, that if you wanted to start options trading with little initial capital, a “one contract” trade would not have its profit potential eaten away by brokerage fees. Trading one contract at the above prices would cost a low $5.60 at entry and exit – unless of course, you were doing multiple positions such as spreads. But even then, at only $11.20 for a two-position spread, it’s still much cheaper than just one position with most other online brokers.

But I wanted to make sure I wasn’t going to trade off price for lack of features. So I investigated further . . .

What I found was most impressive.

TradeKing is focussed on the large US markets and offers powerful scanning and analysis tools, a thriving trading forum. Their trading platform is easy and intuitive to use, so that it is quite simple to place a trade. This includes the NBBO (national best bid or offer) on every trade and is integrated with technology which sweeps the market so that our trades are executed at the best available price.

But I also wanted to know if they could accept advanced option trading positions online at one entry price, without having to ‘leg-in’ to each position at the risk of price movements while doing so. It was also important that they had a technology that allowed “Good Till Cancelled” (GTC) orders on both simple and advanced trades. This gives you peace of mind because once you’ve entered your position you want to be able to immediately preset the exit price and forget it.

TradeKing offers all of the above. You can trade complex, multi-leg strategies all in one order and for one ‘net price’ using their specialized trading screens. You can even select from option chains and then it will pre-populate into the trading screen. Looks pretty cool.

If you are happy to entrust your funds to stock and options advisory groups, they also allow you to set up your account to place automatic trades based on the recommendations these services deliver.

TradeKing also gives you the opportunity to analyze your options positions with risk graphs and probability calculations using historical and implied volatility statistics.

And of course, what would any good broker be, without a good technical analysis charting system. TradeKing has a very user-friendly charting service that provides you live charts, together with all the usual indicators and line drawing features. You can even set up alerts to inform you of the pattern formations that you’re interested in. You can also use their scanner to identify companies that meet your criteria for interest.

TradeKing is good on options education and fundamental analysis and reporting for companies as well. Combine this with the ability to connect with other traders in the forum where you can share ideas and find out what other members are trading and thinking – and you have a good all-round service that should appeal to just about anyone wanting to make a career out of trading.

This broker comes highly recommended – in fact, one of the best I’ve seen yet.