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tradeMONSTER Review

by Darwin on April 22, 2012

The online discount broker tradeMONSTER is a newcomer, but its founders are anything but. The duo responsible for tradeMONSTER is made up of the same people behind optionsMONSTER, a media and reporting company that reports unusual options activity during the trading day.

Let’s review what tradeMONSTER has to offer to compare it to other online discount brokers.

Commissions

tradeMONSTER is right in the middle for commission pricing. The company charges a flat rate of $7.50 for stock trades. Stocks priced at less than $1 are met with an additional surcharge of .0005, or 1/20th of a cent per share. After-hours trades are also charged a 1.5 cent surcharge per share.

Options trades are charged a commission of $12.50, or $.50 per contract, whichever favors the trader. Options trading commissions at tradeMONSTER are lower than other brokers, especially in the range of 25-100 lots, trading sizes that are often hit with high flat-rate charges plus a per-lot charge at other online discount brokers.

Options commissions scale with the number of contracts traded per month. The company charges $.50 per contract up to 10,000 contracts per month; $.40 per contract from 10,001 to 50,000 contracts; $.20 per contract for 50,001 to 100,000 contracts; and $.10 per contract when monthly trading volumes exceed 100,001 option contracts.

Finally, tradeMONSTER offers futures trades to individual investors, charging $1.50 per contract, per trade. Other fees apply, depending on volume, but these fees are consistent from broker to broker. The NFA requires other trading fees to be assessed outside of the commission structure.


Margin Rates

Investors with strategies favoring leverage will appreciate tradeMONSTER’s low margin rates. The company charges the Fed funds rate plus:

3.25% for balances less than $50,000
2.50% for balances of $50,000-$99,999
1.75% for balances of $250,000-$999,999
1.00% for balances of $1,000,000 and more

tradeMONSTER Trading Platform

This broker absolutely excels when it comes to trading platforms. The proprietary tradeMONSTER platform is browser based, meaning that investors can make trades on whatever device they wish by logging into their account by phone or computer.

You will quickly find tradeMONSTER’s attention to detail to be very different from that of other brokers. The founders of the firm routinely appear on CNBC, a financial news network that encourages active trading. With each trade, the platform creates a risk-model, offering up easy to see graphs of profit and loss potential, as well as “if, then” modeling for various fundamental events.

The company also offers a service known as StrategySEEK, whereby traders can identify what interests them about a particular trade so that the software can come up with the best possible strategy. If a trader were interested in volatility on a particular stock ahead of earnings, for example, the StrategySEEK might recommend a straddle options trade. The tool is sophisticated enough to reconsider the same trade at a later time to offer new suggestions for hedging previously unseen risks or upside potential as the trader’s investment evolves over time.

Streaming News

Perhaps the best part about tradeMONSTER is that it is fed data from optionMONSTER’s database. As mentioned previously, optionMONSTER is an option research and media company that seeks out unusual options volume to find where the so-called “smart money” is making big wagers. These trades are outlined in real time directly on tradeMONSTER’s trading platform.

Social media fiends can also plug-in their favorite twitter users for live streaming tweets as they come out. As more news breaks first on Twitter, and traders become more active in using social media for a trading edge, this feature may become more and more valuable.

Bottomline on tradeMONSTER

Let’s conclude this tradeMONSTER review by weighing the pros and cons from a high level. The browser-based platform is executed amazingly well for a company like tradeMONSTER, which has a very low minimum deposit of only $2,000. Commissions, fees, and margin are well in line with competitors, and its platform really differentiates the company in the retail brokerage space.

Downsides include only the stock trading commissions, which, although reasonably priced, are beaten marginally by less expensive brokers. However, tradeMONSTER does not hide its obvious bias toward options traders, having developed a line of trading tools in its own platform for options transactions that go above and beyond most retail brokers. The platform’s vast trading tools are just another reason why tradeMONSTER was named as the best broker for options traders three years in a row by Barron’s.

Check out tradeMONSTER’s platforms, commissions and more here.

{ 2 comments… read them below or add one }

Robinsh August 8, 2012 at 7:44 pm

Seems tradeMonster is worth giving a try, thanks for this wonderful and detailed review about this amazing service and hope it will give a smile on face during checking in reality.

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Darwin August 8, 2012 at 9:37 pm

Realistically most people can’t. I shouldn’t be able to statistically speaking. Given the strategy I’m using, I’m hoping I can at least keep up or exceed. 7 years is a decent track record, but anything can happen!

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