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ChoiceTrade Review

About ChoiceTrade

Choice Trade is a New Jersey based discount brokerage service provider with primary focus on low cost trading service and state of the art technology. It is registered with the Securities and Exchange Commission, a member of NYSE Arca, the BATS Exchange, National Stock Exchange and the Securities Investor Protection Corporation.

ChoiceTrade’s Offerings

ChoiceTrade enables trade in various asset classes like stocks, options, futures, Forex and in products like mutual funds. It offers the facility of both cash and margin trading; IT also provides direct access to exchange through electronic communication network (ECN). Both web and standalone trading platforms are provided for trading.

Advantages

  • Availability of web based trading platform.
  • Forex trading option is provided with the help of metatrader4 platform.
  • Low commission rates and deposit fees. Both flat fee option and per share plans are provided.
  • No minimum charges required for option trade.
  • No hidden charges as everything is listed under normal and miscellaneous fees. It also does not charge for account maintenance and inactivity.
  • Mobile trading facility.
  • Latest technologies like advanced charts, quote streams in the trading platform.
  • An online investor community is provided to discuss and solve various problems and also helps in investor education

Disadvantages

  • Lack of availability of 24/7 customer care service on phone. It is only available from 9 am to 5 pm.
  • Poor quality of tools used for investing, portfolio management and stock selection.
  • Most advanced trade options are provided only
  • Automatic trading is done through third party tool and is somewhat restricted to a specific set of predefined strategies. In other words an algo development kit is not provided unlike other brokerage service providers.
  • Mutual’s fund trading cost is high considering ChoiceTrade targets discounted market
  • The surcharge for trading during non market hours is a bit on the higher side.
  • High fees charged for the advanced trading platforms.

 

 

Trading Platform

Choice Trade offers both web based and stand alone trading platforms. Two types of standalone platforms are provided, they are ChoiceTrade Direct Pro and the more advanced ChoiceTrade select with esignal.

The web based platform is called Quotestream, it provides tick by tick real time streaming data, with level I and level II data for each tick. A user can create up to 30 portfolios containing upto 300 stocks each and, multiple portfolios can be viewed in the respective portfolio manager windows at the same time. The windows can be resized, toggled and modified.  Similarly, all other windows can be customized.

Historical time and sales data can be viewed, which provides information on historical trade based on the exchange, volume and percent change criteria. The data can be downloaded to a spread sheet. The Level2 data window provides advanced order book information such as for different exchanges like NASDAQ, OTCBB for a given stock.

Integrated charting module displays data in graphical formats like Line, Mountain Bar, Candlestick, OHLC, HLC and Dot. It also provides technical analysis using various simple to complex  indicators like Simple moving averages, Exponential moving averages, MACD, Bollinger % B, Aroon Oscillator etc.

Options related data like option Greeks, implied volatility, in the money, at the money and out of the money options is provided.

A stock screen to select stocks is present, which helps to filter stocks based on parameters like share performance (%gain /loss), volume, analyst estimates and other financial statement indicators. There is a separate company research module as well.

IPO and ETF related information is provided in separate modules.

Forex trade can be done using the Forex module which has separate windows like that stocks. 30 currency prices can be displayed from, about 100 available foreign exchange symbols.

The advanced platforms like DirectPro provide trading using keyboard shortcuts. The ChoiceTrade select using signal enables algo trading using third party algorithms CFSB’s AES (Broker dealer plus) , JP Morgan E.A.S.T. It also facilitates other advanced order types such as pegged, discretionary and reserve types. It also provides trade using ECN.

 

Tools and Education

ChoiceTrade has limited number of tools in its kitty and its economic analysis tool analyses the impact of various macro economic factors and their effects on the stock prices. One such economic indicator is the customer confidence index

Commissions and Fees

Stocks can be traded at a flat fee of $5 per trade. Options can be traded with the same cost except that one has to pay an additional $.55 per contract. Mutual Fund trade is priced at $25 per trade.

Another option of direct access to exchange is also provided and it costs a trader $.005 per share, with a minimum of $1.00 per trade.

Data feeds are charged separately, with Level I quotes being provided for free whereas level 2 quotes and pink sheets are charged. Apart from these there are many other types of miscellaneous fees e.g., outgoing and incoming checks, transfers of securities to other banks/firms (ACAT – Automatic customer account transfer), DTC charges etc.

No minimum deposit is required for cash account where as margin account needs $2000.

Summary

ChoiceTrade like any other discount broker focuses more on the low commission fees rather than customer service. Its fee structure is attractive to active intraday traders who place a lot of orders in a single day. Long term and fundamentals based investors shy off from this brokerage service provider, especially after considering the low quality of research tools available to them. However, Choicetrade is an attractive option for retirement planners owing to is low IRA fees. Even, in the active trader segment, the fees are a bit on the higher side when compared to its peers, e.g. it charges some surcharge on off market trade. There is no separate development kit provided for writing algorithms for rule based trading, making it another drawback. The charting tools and trading platform is on par with other competitors, with some scope to improve in the web based platform. Charging a high fee for mutual funds is another drawback.

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