Founded by trader Guy Gentile in 1999, it is SpeedTrader’s mission to provide electronic trading and direct market access at the cheapest possible cost to the active trader. The company started out offering trading in stocks, and added futures in 2003 and Forex in 2005. The company now offers electronic and over-the-phone trading in equities, futures, and options.
A range of platforms, but at a cost
SpeedTrader offers 3 trading platforms. The entry level platform is the SpeedTrader 2.0, a browser based platform with direct access trading.
Next up the scale is SpeedTrader PRO, with Level 1 data feeds and a free training account. The cost of this is $49 per month, though for traders who execute orders that generate commission greater than this then the charge is waived.
Finally, there is the Sterling Trader PRO platform. This desktop based platform costs $250 per month, but gives the account holder a lot more trading tools. These include execution and management tools, real time data, and the full suite of trading tools.
One feature that appeals to active traders is the point and click trading facility, making trading just that little bit faster. Top this with alerts that flash at you and sound at you, as well as the ability to set automatic buy and sell orders upon these alerts, and the platform begins to have power for the professional trader.
For prospective clients, a test platform is offered for up to 14 days. This simulator uses real time quotes and full system functionality, which is a good way of learning to trade via SpeedTrader. It also offers the charting package, though this lags behind the functionality of others like Etrade and Schwab. Once the 14 day period is up, the user will be contacted by a SpeedTrader rep. If you then sign up to take the package, you can request use of the simulator again to enable you to back continue testing trading ideas and strategies.
Low commissions, or are they?
Customers get a choice of two commission structures. The first is a per share charge of $0.0039, with a $0.99 minimum, coming in below most of its competitors, and the second is a flat fee structure of $6.95 per trade, again a very competitive number, but still nearly 50% higher than Zecco.
If you need the assistance of a broker, then a telephone trade will cost $30. This is not the highest, Etrade charge around $45 plus standard commission, though Tradeking charge just the normal fee of $4.95.
Basic Educational Package
Though the company offers a range of educational and training webinars and seminars, these are far less comprehensive than its competitors. It does, however, have a number of order entry videos on its site that teach the new user how to enter a buy order, a sell order, a buy stop order, and a sell stop order. To be honest, these are very basic videos, with no sound, and not a good advert for the technology the company uses in its systems.
A limited offering
SpeedTrader is good at what it does best: offering direct access to markets with high speed trading functionality through its platforms. But for those investors that want the ability to hold all their investments in one place, then SpeedTrader is not for them. There is no facility to trade Mutual funds, or house an IRA account.
Maybe not as cheap as claimed
The commissions may be low, but the other fees are on the high side for a platform that is lacking in charting capability. The fees for the higher specification platforms wipe out much of the value of its low commission structure, even given that these fees are rebated by commissions charged.
Even the marketing blurb of SpeedTrader notes that the platform is best used by professional traders who strike 50 trades a day, emphasizing that this is not an online trading platform for more general use. For these, the real appeal then becomes cost. A trader who does trade to this extent will see his trading margins increase if switching from other brokerages, without a doubt. But he may lose some functionality, and will need to get used to the more basic charting options.
All in all, there are better platforms available for the professional trader though the fast one click execution and possibility to automate strategy trading will appeal to those who trade tens of times a day.
For those that do decide to give SpeedTrader a trial, opening an account is easy, and funding can be made immediately.