TradeKing has been getting a lot of attention on the Trading forums recently, so we decided to investigate and see if any scam claims exist and whether they have merit or not. What we found was more than surprising, less than inspiring, and yet again more ammunition in the battle against U.S. and non-U.S. brokers.
TradeKing was launched in December 2005 and is based in Florida, USA with additional offices in North Carolina. The firm first gained widespread recognition by providing trader support through social networking and blogs from which they promoted their own products. In 2007, TradeKing released ‘The Options Playbook’ featuring 40 options strategies for beginners and seasoned traders. This publication played a massive part in TradeKing branding and is still considered by many to be required reading for new traders. In 2012, TradeKing and Zecco.com merged and just two short years later they formed TradeKing Advisors. This merger was an upgrade from the social media and blog days but still a far cry from becoming a reputable broker. Since then, Ally Financial have stepped in and acquire TradeKing and, of course, its massive database of traders.
Review Verdict: TradeKing may not be a complete scam. However, we do not feel comfortable recommending it to fellow traders. There are many cases that we believe OptionRally may not have your best interest. Find the evidence in this TradeKing scam investigation.
Should You Open An Account With TradeKing?
At this point, we are hesitant to say yes. In fact, we don’t say yes at all. TradeKing history is far from stable. Moving from blogger to advisor, to author, to the recent step up to broker does not inspire confidence when compared to other brokers that have been providing full services and developing for over ten years.
Compared to other brokers, TradeKing is still a baby, or at best a teenager changing jobs every now and again. Be aware that TradeKing has a $50 account fee for any accounts that are deemed inactive. You can avoid this by keeping your balance above $2500, which we all felt was way too high since this kind of funding is considered by most reputable brokers to be in the VIP category, not the minimum amount to avoid penalties.
Clearly, TradeKing hasn’t yet figured everything out.
TradeKing Platform & Tools
TradeKing weighed up cost with performance and decided to go with the limitations of a web-based platform. If you’ve used Mt4 or one of the web-based platforms that copied the Mt4 style, you might be scratching your head at this one for a while. The presentation looks more like an office database than a trading platform, which further complicates the already bizarre way in which U.S. based brokers do things. Don’t bother trying to customize your view or add a new watchlist, option chains, or any of the effective plugins that come with standalone trading platforms.
TradeKing also has an App which is equally perplexing in its layout, and in need of some UI adjustments. A major limitation is the fact that you can’t transfer funds. That’s right. You’ll have to go home and log on from your PC in order to withdraw or deposit funds. You will get bothered quite often and lose a lot of time with TradeKing since the site is continuously asking security questions, which still comes up even after checking the box to remember login information.
Trading With TradeKing
Ignoring the obvious and unavoidable limitations of trading with a U.S. broker, the actual process of placing trades is hardly ergonomic. Most U.S. brokers provide an all-in-one ticket, but TradeKing felt it was better to have over ten different variations of a trade ticket, which can be extremely inconvenient, to say the least.
The selection of charts and other tools that are found with almost every decent broker are somewhat lacking with TradeKing. To add insult to inconvenience, TradeKing allows random banner advertisements to popup and promote TradeKing products.
Prices are predictably low for a discount broker, but stocks under $1 get charged an additional $0.01 per share for every transaction, with a commission rate limitation of 5% on the total order value. The small amount doesn’t sound like all that much, but if you prefer to not put all your eggs in one basket, then you’ll be making multiple small investments with a wide exposure to the markets. The low fees tend to add up faster than you think.
What TradeKing Traders Are Saying?
Although there is no mention of scam in the online comments that we found, we did find plenty of other complaints. In fact, we found more comments about TradeKing than almost any other broker out there. The negative remarks were mostly unremarkable and are common to just about every broker.
Poor customer service was a reoccurring theme. Pushy account managers suggesting an additional deposit is the answer to all problems was mentioned way too many times to ignore. Unanswered emails was also a common complaint. There were also some anonymous withdrawal problems or account issues that might suggest a scam.
In addition, TradeKings may not have been accused of any market manipulation, although the weird pricing system that the American Brokers use were noted as being less attractive than the European system for many assets that were not U.S. based. To summarize, the online trading community is less than happy with TradeKing but nobody is throwing around the word scam just yet.
An interesting concept that TradeKing is using is a Trader Network, which allows their clients to share real trades, read and make notes on why they were made, and generally interact with the community of traders through blogs, forums, and organized groups. This networking is hailing back to their social media days and can be interesting, however, it is not a reliable source of information if you’re looking for good trading tips.
Opinions on the forum vary wildly and after spending an hour or two reading posts from other traders you’ll be non-the-wiser. Comparing to a sentiment bar that actually shows what traders are investing in, it seems like a lot of fuss for nothing. Furthermore, most of the posts are made by TradeKing staff who are overly hesitant to make any actionable suggestions.
The Final Verdict
After careful consideration and tireless examination we answer the question, is TradeKing a Scam? Unlikely. Most U.S. brokers get audited or investigated every few years. TradeKing’s new status is new so it’s doubtful that they’ve already been investigated, but it will happen sooner or later and the truth of TradeKing will be revealed.
The U.S. regulations are not as stringent as CySec but they would surely uncover any and all questionable behavior. Do we recommend TradeKing… no! We do not recommend TradeKing. Their website may seem nicely polished and easy to navigate around, but their track record and lack of experience say wait a while.
It’s very possible that in a few years TradeKing will iron out the inconsistencies and develop a better service for their clients. For now, they really don’t have anything that would cause us to put them above or on par with the many European brokers that have more than a decade of experience and development. Stick with the brokers that have a more tested and proven experience providing traders with tools and access to the financial markets. They are far more likely to offer better services.
- Easy to Use Website
- Mobile App (Not Unique)
- Lacks Broker Experience – Too New, May Fail
- Unanswered Emails & Poor Customer Response
- Can’t Transfer Funds From the App
- Account Fees for Inactive Accounts
- Too High Min. Deposit