Updated January 19, 2015

TradeMonster Review: Not All Monsters are Scary

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With its smiling monster logo greeting you on the homepage, TradeMonster is both appealing and non-threatening at the same time. It serves as a warning that investing on your own (away from the safety of FDIC-insured savings accounts) can bite you if you're not careful, but it also lets you know that investing can be fun too. TradeMonster's tools continue that sense of fun with an easy-to-use website and a full-service, self-directed investing experience.

8/11/2017 Update: TradeMonster is no longer available on CreditDonkey. This offer may have been discontinued or may no longer be available to new customers.

Overall Score

4.0

Stock Trading

5.0

Options Trading

3.0

Mobile App

4.0

Trading Platform

4.0
5-point scale (the higher, the better)

Pros and Cons

  • Low commissions
  • Easy to navigate website
  • Extensive resource tools and videos
  • No forex trading

Bottom Line

Well-designed online broker for investors who want to save money on trade fees

TradeMonster, which recently merged with Options House, another popular online brokerage, was given four and a half stars in the 2014 Best Online Brokerage rankings by Barron's, which gave such a high rating to only four online brokerages. Gaining more fans by the trading moment, TradeMonster deserves a deeper look by CreditDonkey. Here is what this online brokerage has to offer.

TradeMonster for Beginners

Like OptionsXpress, TradeMonster specializes in options trading and is very video-centric and Gen-Z friendly — although most of that generation is probably still a bit young to invest on their own. The point is, it offers a wide array of videos to help you with your market education, as opposed to just reading articles and static information. Also similar to OptionsXpress are free webinars for beginners.

Opening an account is straightforward and requires no minimum balance for the general brokerage account. If you want to trade on margin, though, a federally regulated $2,000 minimum deposit is required. However, if you're looking to trade in futures, you'll have to open a separate account that requires a minimum deposit of $10,000.

FEES

For both novice and seasoned investors, TradeMonster offers an attractive fee structure, which is one of the lowest in the online brokerage universe:

  • Stocks, ETFs: $4.95 per trade; additional 1.5 cents per share for afterhours trades
  • Options: $12.50 minimum, 50 cents per contract for up to 10,000 trades per month; fee goes down on a tiered-basis the more you trade
  • Futures: $1.50 per contract, per side
  • Bonds: $15 plus $1 per bond
  • Mutual Funds: $20 per buy only; no fee to sell

While TradeMonster does charge $15 for broker-assisted trades, that is a relatively low dollar amount compared to other online brokerages. Also, if you're a more seasoned investor and you're looking to make a switch to save yourself some cash, you can transfer your entire account to TradeMonster and it will refund any fees your former broker charged for the transaction, up to $250.

FUTURES

Unlike many online brokerages, TradeMonster requires you to open a separate futures account, rather than just opening one main account and accessing all your trades there. Because of this, there's a $10,000 minimum deposit you're going to have to slap down before you do a cent of trading. But there's a nice set of resources and tools specific to futures, including the "Vertigo Ladder," a color-schemed chart that shows real-time pricing, depth of market and volume by price of a futures contract. Then you can click and buy or sell at the price you want.

RESEARCH & TOOLS

Like most, if not all, online brokerages, TradeMonster offers a selection of tools and research to assist you in making your trade. Remember, though, you'll have to invest not only money but a fair amount of time to fully capitalize on everything at your disposal, as there's always a bit of a learning curve. TradeMonster provides real-time streaming quotes, charts, and news, option chains, report cards on stocks, and various other tools to keep you up to date on your market education. It's also worth noting that TradeMonster offers a lot of trademarked research tools that, while they sound specialized, are similar in type to other online brokerages.

PAPERTRADE

When you open a TradeMonster account, you'll have access to PaperTrade, a platform where you can practice your trades with virtual money. While many online brokerages give you only $25,000 in fake funds to play with, TradeMonster gives you $100,000. (Makes you wonder, since it's not real money, why the other brokerages don't give you more to start!) With those virtual dollars, you can then try your hand in the trading game while using the same tools and resources that would be available to you if you were investing for real. If you're hitting it big and profiting from your virtual cash, you can truly feel like a mogul — if not, well, it’s probably best to get some professional investing assistance.

AUTOTRADE

Let's say you're an active self-directed investor who's financially astute but your busy lifestyle doesn't enable you to sit in front of your computer all day. If that sounds like you, TradeMonster has Autotrade, an automated service available to subscribers of participating investment newsletters. You can set all of this up via your TradeMonster account and link to whichever newsletters you subscribe to, then sign a form giving TradeMonster permission to invest on your behalf based on the recommendations of the newsletter. After that, Autotrade does the work for you. Currently it offers 35 newsletters under this service.

strategySEEK

This innovative visual tool geared toward options investors allows you to input your forecast and risk priorities for a specific option, after which strategySEEK will do the work. With the parameters you give it, it will scan and analyze thousands of options strategies that should fit your needs. You can use it to do extensive research with the click of your mouse before you decide to take the leap and make the trade.

PENNY STOCKS

The good news is, you can trade penny stocks (aka Pink Sheets or OTCBB) on TradeMonster. The bad news is, while a penny stock is defined as any share less than $5, TradeMonster will hit you with an additional $.0005 per share charge on for any stocks priced less than $1. To the untrained eye, that might not seem like a lot of money, but those fees can really add up when you're purchasing a large amount of penny stocks, which is common in this volatile trade market.

IRAs

TradeMonster provides the three main types of IRAs — Traditional, Roth, and Rollover. To help you decide where to put your retirement money, it has an easy-to-read comparison chart so you can figure out which IRA works best for you. TradeMonster also lists a toll-free number for calling a financial rep if you’re still confused.

You can trade a variety of options strategies in your IRA, as well as stocks. There's no fee to open and maintain an IRA, but you will get hit with a $20 charge if you close it.

MOBILE APP

You can trade from almost any device on both the Apple and Android platforms. It's not a one-stop shop per device, however — i.e., you might have the ability to do things on your iPad that you can't on your iPhone, and vice versa. For example, you have the ability to customize and see up to four screens/accounts on your iPad, which you can't do on your iPhone due to the limited screen size. For the most part, however, you'll have access to real-time charts, quotes, and news option chains, and you can customize your dashboard to suit your needs or just to show your own account. An interesting thing to note, however, is that, even just when looking at the screen shots, the TradeMonster color scheme on a black background is a little disconcerting, and sometimes the screen is hard to differentiate at a quick glance.

WHO TRADEMONSTER WORKS BEST FOR

Options traders, novices who want clear and concise video tutorials, and seasoned investors who want to save money on trade fees.

Here is how TradeMonster stacks up against TradeKing:

 

ally-invest

TradeMonster Pros and Cons

PROS:

  • Low pricing per trade
  • Easy-to-navigate website
  • Extensive research tools and videos

CONS:

  • Need $10,000 minimum to open a futures account
  • No forex trading

BOTTOM LINE: Why TradeMonster

TradeMonster is a well-designed, well-priced online brokerage with as many, if not more, bells and whistles than some of the more popular online brokerages. The educational videos it offers are invaluable to newbie investors, and its user-friendly platform will have you trading in no time. The $100,000 in virtual funds it offers to practice your investing skills — or discover if you even have them — will certainly help you decide if self-directed investing is right for you.

8/11/2017 Update: TradeMonster is no longer available on CreditDonkey. This offer may have been discontinued or may no longer be available to new customers.

Cynthia Cohen is a retail analyst at CreditDonkey, a stock broker comparison and financial education website. Write to Cynthia Cohen at cynthia@creditdonkey.com. Our data-driven analysis has been recognized by major news outlets across the country and has helped families make savvy financial and lifestyle decisions. (read more)

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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Comments about TradeMonster Review: Not All Monsters are Scary

  • Haywood from North Carolina
    on February 3, 2015 5:35 PM said:

    I loved OH. I don't like the new platform, but the worst part is they screwed up the spreads in one of my accounts bringing it over to new platform and are dinging me for much more margin than needed to cover the spreads. So far, customer service has been HORRIBLE. They are going to lose a lot of business if they don't get their stuff together.

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