Hey, did you hear that Charles Schwab is stepping in to buy TD Ameritrade for big bucks? 28 Billion dollars is being dropped on the deal. The brokerage wars are getting hotter by the minute! As a Trader what does this mean to you? Uh oh! Is this good or bad? How do you feel?
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Charles Schwab Buying TD Ameritrade Is a Smart Move
Everyone is well aware that TD Ameritrade is one of the best charting and trading platforms out there. The ThinkorSwim platform is one of the most popular trading software platforms out there for active traders. Schwab traders and investors should be extremely excited about this. In fact, investors, in general, appear to be excited about the news. Just take a look at $AMTD today and see the huge pre-market move for yourself. The chart is ripping!
Check out our full Charles Schwab review to learn more about their brokerage and how they stack up against the competition.
So, if you are a ThinkorSwim user, don’t worry. Schwab would have to be crazy to mess with ThinkorSwim. However, less diversity in the trading world for brokers to choose from is not a good thing, in my opinion. If we as traders have fewer choices for brokers, you know what that means. Less innovation, less competition for customers, and typically higher prices.
For now, it’s not a problem. Brokers are fighting hard for your account. The race to free commissions was started with Interactive Brokers offering commission-free trades in September. Schwab, TD, and ETRADE, FIDELITY, soon followed suit. (Can I get a refund on those trades I made over the years guys? haha)
Robinhood of course started it all being the first broker to offer free trading in 2016-2017. (Thank you RH!)
We at the Bullish Bears think commission-free trading is great for active or casual traders. More money in your pocket, fewer fees, and more ROI on your trading. However, if it ends up costing you in terms of less speed when executing trades, poor platform performance, slippage, or lack of good customer service then we have a problem.
Why Does It Matter?
Let’s look at the facts, TD Ameritrade has great customer service. We hope that doesn’t change after the acquisition. It’s going to take a long time for the deal to work out, so we will monitor the situation and let you guys know what we think and see.
We noticed ThinkorSwim has had more issues since they went to free commissions. Trades were taking longer to execute, and there were more log-in issues and data issues. Though lately, it’s been fine. It isn’t stopping us from using it daily on our live streams.
As long as Schwab ($SCHW) leaves our platform alone, we’re good. If we see any problems with trading, then we might not use it as much. I think Schwab knows this and will tiptoe around any changes that are negative to ThinkorSwim. We do use other brokerages to make trades. I think it’s silly to have all your money in one account, as a trader. If you’re investing that’s different. But if your bread and butter come from trading, don’t put all your eggs in one basket.
Charles Schwab Short Locates
It’s possible that as a result of the two brokers merging that better short locates will come out of it. TD does not have the best short locates in the industry. Combining their two clearinghouses, and combing customer bases means more shares potentially for us to short, which is a good thing!
It’s a good idea to spread yourself out when it comes to your financial strategy in general. Here is the bottom line. ThinkorSwim should remain the same until the deal goes through, and might not change at all. No reason to panic. It’s always good to have a backup plan. If you’re looking for other brokers and want the facts, check out the trading companies we have listed on our site. We have vetted all the most popular ones.
You can always join us in the trade room and ask our mods and members what we think or use too. Charles Schwab buying TD Ameritrade is a good thing for traders for now because it shows that these giant brokers are willing to do anything for our business. As long as we don’t end up with an Amazon-like broker someday, we should be fine. Read our thinkorswim review for a full breakdown of this platform.