Discount options brokers are highly competitive, and finding a way to stand apart from the crowd often leads to deep trade discounts. TradeMonster is one of the lowest-priced online brokers and they provide flat-fee trade rates of only $7.50. This online options trading broker also provides volume discounts and low margin rates.
This is a relatively new online broker. OptionMonster Holding Inc. launched in 2006 and they released their TradeMonster trading platform in 2008. Since then they have quickly collected accolades from customers and financial commentators alike, and they continue to add unique and powerful market research tools. Their trading platform can quickly create complex options orders, and volume traders can take advantage of contract orders as reasonable as $0.10 per contract.
Depending on how much you trade, TradeMonster may be the most affordable discount broker for your options trading. Standard option trades start out at $0.50 per contract with a $12.50 minimum. However, if you trade options in volume (over 100,000 contracts per month) the fee goes down to $0.10 per trade with only a $3.50 minimum. Regular stock trades are $7.50 per trade. Options exercise and assignments are also only $7.50 each. Spread orders are low-priced – two-leg spreads of 10 contracts per leg are $15 and 50 contracts are $50.
Margin rates are also comparatively low. Low loan balances of under $49,999 is the federal fund rate plus 3.25% and high balances of over $1 million are only the federal fund plus 1.00%. Bonds and mutual funds are only $15 per trade. IRA fund closures are $20, paper statements are $2 and domestic fund wires are $20.
If you are an active trader, an easy-to-use and streamlined trading platform is vital. Though the TradeMonster trade platform can perform all basic trade functions, we found a few things we didn’t like such as the pop-up windows. For example, from your account if you select to launch trading it opens a new window, and from the trade platform if you select to buy or sell, yet another window opens up. Other broker's online accounts are more integrated with the trading platform.
TradeMonster does provide some powerful and unique research tools such as spectral analysis, which will let you experiment with volatility. This is a tool unique to TradeMonster. It shows a spectral map rather than a simple chart. It also has tools for running scans on preset or unique technical patterns, option strategy tools, volatility forecasters, What-If analysis, group order management, performance tracking and more. All trade tools are accompanied with helpful videos that explain how to use the tool. Mobile tools include iPhone, iPad and Blackberry apps. TradeMonster does not yet offer an Android trading platform.
In terms of options trading their platform can create all types of options orders. It can support iron butterflies, condors, straddles, calendars, spreads and more. The options trade tools support 15 types of option orders, and you can easily place multi-leg orders.
You can contact TradeMonster in a variety of ways and they respond quickly to inquiries. You can contract them by telephone, email, chat, fax or mail. We contacted them by email and received a response the next morning, and we used their online chat support and found the account representative to be helpful and quick. It should be noted however that their telephone support is only available during standard business hours.
Like most discount brokers, TradeMonster does provide additional educational opportunities such as webinars, live events and a blog. However, compared to large brokers their live events are limited, and they do not have local offices that you can visit. Their news site OptionMonster is a nice addition. It includes market news, free tools, a research lab and basic options education. In terms of social media, you can follow TradeMonster on Facebook, Twitter and YouTube.
Self-directed, volume options traders will enjoy taking advantage of TradeMonster's competitive fee schedule and low margin rates. This discount broker also offers some of the lowest trade, exercise and assignment fees. New traders can practice their trading strategies using their generous paper trade platform. However, if you need 24/7 support, face-to-face assistance or Android trading you may want to check out a different broker.
