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TD Ameritrade Review

Published by Usman Ahmed, MBA (Researcher)

Reviewed by Bowen Khong, ACCA

Opening 

TD Ameritrade is an online forex broker that offers margin based trading services in currencies, metals, stocks, cryptos and indices. The broker is famous for its funds security, a broad range of assets offered, and competitive pricing.  This article reviews the services of TD Ameritrade and why it is a top choice broker for around one million traders and investors. The broker has more than 6000 registered investment advisors. A company of this caliber has a lot to offer traders. You will get to see some of these features in this article and its little downsides, which are not so much of a big deal. 

Overview 

TD Ameritrade (TDA) is a company that offers an electronic trading platform where traders can trade financial assets including stocks, Exchange Traded Funds, forex, options, cryptocurrency, mutual funds, cash management, margin lending, and more. The company, founded by Joe Ricketts in 1971 (50 years ago), has its headquarters in Westlake, Texas, United States. It acquired the US operations of TD Waterhouse from Toronto-Dominion Bank in 2006 and was renamed TD Ameritrade. Charles Schwab Corporation acquired the company in 2020.[1]

TD Ameritrade is a publicly-traded company (AMTD on Nasdaq). Many shareholders own it, and anyone could be an owner. The biggest shareholder is Toronto-Dominion Bank (holding about 43% of the shares), and it is from the Bank name that the broker’s name is derived.

In 1998, TDA introduced touch-tone trading (being among the first brokers to do that); in 1994, it was one of the first to pioneer online trading; it introduced online options order entry and electronic trade confirmations in the late 1990s. The company grew to become the first to guarantee trade execution of 10 seconds and introduced paperless account creation in the 2000s. TD Ameritrade has continuously made headlines for its services and innovative solutions. 

The broker makes its money from margin balances, trade commissions, and payment for order flow. 

ProsCons
More than 50 years of trusted services  
Wide variety of assets 
$0 minimum deposit
Free trading fees (stock and ETF)
Charges high for some stocks 
Mostly limited to US residents
Expensive robo-advice and managed portfolio 

Who is TD Ameritrade for? 

The platform is for traders of all levels. The platform is easy to use, making it work well for beginners, but it also has comprehensive educational offerings, live events, and intuitive platforms. Its thinkorswim platform makes TD Ameritrade a good option for more experienced investors who want to take an active approach in investing. The managed portfolio also gives all those investors the chance to make money in the long term. 

Rating: 4.5/5

Is TD Ameritrade Safe?

Multiple government agencies oversee the broker. It is regulated by the Securities Exchange Commission (SEC) with the registration numbers 80160469 and 8-23395. It is also registered with the government watchdog in all 50 US States, the Virgin Islands, the District of Columbia, and Puerto Rico. 

The broker is a member of the Financial Industry Regulatory Authority (FINRA), a regulatory body that ensures brokerage firms and exchanges follow the rules for the securities industry. TD Ameritrade FINRA ID is 7870.[2]

Securities Investor Protection Corporation (SIPC) protects all brokerage accounts with TD Ameritrade. The US government established the SIPC, but it is now a private enterprise funded by member brokerage firms.

Rating: 4/5

Year founded:1971
Publicly traded: Yes
Licenses: SEC
Backlist: No

Offering of Investments

The broker offers different investment products like Stocks, Options, ETFs, Mutual Funds, Futures, Forex. 

Managed Portfolios: the broker provides professionally managed portfolios designed to help investors pursue financial needs as they grow and change. The managed portfolio is designed to save time and help you stay invested for the long term.

Cash Management: you can also use the flexible cash management option, which provides you the freedom to access, spend and manage your money as you want. You can do this with a debit card, free ATM withdrawal, free check writing, and free online bill pay. 

Bonds and Fixed Income 

IPOs: Initial Public Offering is made available. This provision allows investors to invest in companies when they are newly going public. 

There are many other assets that traders can exploit on the trading platform. The broker also educates investors on what it involves to trade these assets. The different array of assets allows investors to choose and build many different portfolios.

Cryptocurrencies: the brokerage platform does not have a provision for cryptocurrency traders. It neither offers crypto traders nor makes it available as deposit and withdrawal.

Rating: 4.25/5

Forex: Spot TradingYes
Currency Pairs (Total Forex pairs)70+
Social Trading / Copy-TradingNo
CFDs instrumentsforex, stocks, ETF, options, bonds, 

Commissions & Fees

The broker offers straightforward pricing, and there are no hidden fees or complicated pricing structures. It at the same time does not charge platform fees, data fees, commissions, and it also does not have trade minimums for US exchange-listed stocks, ETFs, and options. It charges $0.65 per contract fee for options trades. A $6.95 commission applies to online trades of over-the-counter stocks not listed on a US exchange.

The pricing is straightforward, but the broker does not score well in its margin rates and commission. The commission of $6.95 per trade for other stocks and ETFs (asides from US stocks) is higher than the industry average and is twice as expensive as some other brokers.

Rating: 3.5/5

Minimum Initial Deposit$0
Average Spread EUR/USD – Standard1pip
All-in Cost EUR/USD – Active1pip

Platforms & Tools 

The broker provides powerful trading platforms and tools. It has the: 

Web platforms: it has tools suitable for all levels of investors and has access to educational resources, and planning tools.

Thinkorswim desktop: A professional-level for advanced traders platform, it is fully customizable and has downloadable software.

Thinkorswim web: this is an intuitive interface that puts critical tools all over it. It allows pre-configured strategies that allow setting up trades in just a click.

 Although the broker offers various platforms with various features, it is not rich in special trading tools. It also does not have MT4 and MT5 for those who prefer to trade with them.

Rating: 3.5/5

Virtual Trading (Demo)Yes
Proprietary PlatformYes
Desktop Platform (Windows)Yes
Web PlatformYds
MetaTrader 4 (MT4)No
MetaTrader 5 (MT5)No
Charting – Indicators / Studies (Total)300+
Charting – Drawing Tools (Total)21
Charting – Trade From ChartYes
Order Type – Trailing StopYes

Research  

The research provision is wide and made so that you can analyze investment performance to see how viable your investment ideas are. 

Markets Edge offers information and technical analysis with reports that are given on traders quantitative and technical reports plus technical market commentary that can help you evaluate your trading strategies for different market conditions.

Stock overview and chart: the overviews are tailored to your position and help traders find stocks of interest with potential trade ideas. The stock overview can be used to monitor volume, daily highs and lows, and which stocks and sectors are on the move. By simply selecting securities or indexes and setting your parameters for charts that have needful information, you will be able to spot trends and potential opportunities that may fit your investment strategies. 

There are other useful research tools too. The tools are useful for beginners or advanced traders and can be a good addition to profitable trading. 

Rating: 4/5

Education  

The broker offers an education that is tailored at making its investors smarter. The education includes market news and analysis, timely articles, webcast, and immersive curriculums to guide you on the path of becoming a skillful investor.

The market news shows what is happening and gives insiders views on some economic indicators, earnings, trends, and more. 

The immersive curriculum engages real coaches with years of experience to engage you to invest in various assets, making you a more informed investor. 

Articles and Videos: the broker has more than 200 instructional videos, tutorials, and investing publications for investors to learn from.

The education also includes informative webcasts from a variety of education onboarding. You can also grow as an investor and meet other investors through the broker’s in-person events. These in-person events are currently virtual events. 

The broker provides different educational resources that would help its clients in achieving their goals. As wide as the resources are, they are not enough to be referred to as one of the best that brokers provide in the industry, but it beats the provisions of some other brokers. 

Rating: 4/5

Mobile Trading

TD Ameritrade has powerful mobile offerings for its investors. The mobile trading app is available on device-optimized mobile apps, which includes apple watch. 

Through the mobile app, you can manage investments, seize opportunities from anywhere you are and across all your smart devices.

There are two different mobile apps, TD Ameritrade Mobile App and thinkorswim mobile. 

Through the TD Ameritrade charts, you can:

  • Trade stocks, ETFs, and options with easy order entry and editing.
  • Access different indicators, set up price alerts, get real-time quotes, and real-time access to watchlists. 
  • You can also get access to market news, view third-party analysts’ reports and research.

Thinkorswim mobile makes the clients explore the power of its advanced trading platform. Through the mobile app, you can:

  • Access multi-leg options, stocks futures, and forex 
  • Create customizable, multi-touch charts and hundreds of technical indicators and drawings.
  • Live texts and screen sharing with trade specialists that aid on-the-spot help.

The mobile apps have features that many brokers do not have. Rarely can you find any broker that has many technical indicators and some other features on its mobile app.

4.5/5

Mobile devices apple, android, ipad
Featuresallow making trade, watchlist, charting, alert, etc.

Final Thoughts

Despite the high price of some stocks, TD Ameritrade is a winner for all levels of traders who desire to make money from different financial markets. It scores very high in its ease of use, security of funds, offering of an investment, platform, research, and education. It is one of the few brokers to have provided consistent and trustworthy services for decades. To check out its services, kindly click here.

Overall rating: 4.25/5

Frequently Asked Questions 

Can I buy less than 100 shares on TD Ameritrade?

When buying stock on the open market, you should open a brokerage account with a financial institution like Charles Schwab or TD Ameritrade. Stocks that trade in multiples of 100 are known as a round lot. Odd lots are fewer than 100 shares.

Is there a fee to withdraw money from TD Ameritrade? 

The broker does not charge a withdrawal fee even if you use ACH transfer. Withdrawal via wire transfer costs $25, and it is the only option available to non-US clients. 

How long after selling stock can you withdraw from TD Ameritrade?

You will have to wait until the settlement of the trade (which is two business days from the sale date) to withdraw the proceeds of a sale from your account.

Does TD Ameritrade charge for stock splits? 

A stock split happens automatically in your account; you do not have to do anything. TD Ameritrade also does not charge any fee for this type of stock split. 

Why does TD Ameritrade need my employer info?

The company asks for your employer’s information because they must do so by FINRA and SEC regulation. FINRA requires it because the broker (TD Ameritrade) could make investment recommendations to you. SEC requires to make sure that new customers are not laundering money and using them to invest.

Is TD Ameritrade better than Vanguard?

TD AmeritradeAmeritrade clients have the opportunity of trading a wide variety of asset classes like forex, stocks, futures, sophisticated options strategies. Going by our reviews, TD Ameritrade scores higher than Vanguard in all categories, except that Vanguard takes more international clients.

What is level 2 TD Ameritrade?

This thinkorswim gadget shows ask and bid price for the exchanges making a market in stocks, options, and futures. It is a real-time list of best bids and an underlying asset asking for instant order execution.

Usman Ahmed, MBA (Researcher)
Usman Ahmed, MBA (Researcher)
Usman Ahmed is a currency trader and financial market analyst with more than 7 years of active trading experience. Besides holding a Masters degree in Business Administration, he has worked for some of the most renewed companies in the forex industry including FXCM, IQOption, MetaQuotes, Alpari, FXStreet, DailyFX and several others. Usman possesses strong technical analytical skills and is famous for his very own, informative and entertaining, writing style. He believes in naked chart trading analysis that is commonly known as price action trading. He follows global financial news and macro-economic events very closely.
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