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Think or Swim Reviews
Think or Swim Basic Information
If you’re looking for a top notch broker that gives you access to over 10 global markets, then Think or Swim just may be right for you.
Think or Swim Introduction
Found in 1999 and headquartered in Chicago, IL, Think or Swim is an online brokerage company that specializes in options trading. The firm was a privately held company until TD Ameritrade Holding Corporation acquired Think or Swim on June 11th, 2009. Supposedly, TD Ameritrade spent over $600 million dollars to acquire the brokerage firm. This is a very high price tag for such a niche focused online stock brokerage company.
Think or Swim also carries themselves a bit different than your average corporate brokerage firm. They go by the motto “We built a better banana” since their company mascot is a stock trading gorilla. Check out this video to get a feel of the humor and vibe for Think or Swim.
Tour of Think or Swim Chicago Headquarters hosted by CFO Kristi
Think or Swim Biggest Benefits
Think or Swim is an industry leader with their robust trading platforms for desktop and mobile users along with their impressive charting and unique pricing structure for high volume options trading. TOS is positioned at a very small niche group of active options traders, and that’s where you will receive the most value from their brokerage services.
Think or Swim Commission & Fee Pricing
Options Trading Fees: Higher than Most
Think or Swim doesn’t have a very attractive options pricing structure. They offer 3 different levels for options traders based on your activity:
- The Standard level applies best to general traders who usually execute small single orders of only 1-5 contracts. You pay $2.95 per contract which is much higher than other online brokerage like TradeKing, Etrade, or OptionsXpress. If you execute 5 options contracts, that’s nearly $15 in commissions where brokers like tradeMonster only charge around $4 for the same exact trader.
- EX/Rate #1 is for slightly more activate traders that execute between 5 to 16 contracts. $1.25 per contract is a much more attractive rate, so it makes sense to buy at least 6 contracts if you use Think or Swim.
- EX/Rates #2 is for high volume traders that purchase at least 16 contracts per single order. Think or Swim gets it correct this time with a very reasons $0.95 per contract. I really dislike the other 2 levels, and wish Think or Swim would adopt $1 options contracts all around to make them more competitive in the online brokerage industry.
Think or Swim obviously targets the higher volume options traders, and perhaps sets their pricing levels so expensive in the beginning to weed out the more dollar conscious investor. It makes little sense to buy options contracts through Think or Swim if you are working with a limited budget.
Stock Trading: Under $10 but There are Better Deals Elsewhere
In case you want to trade stocks as well, you will have 2 pricing options when trading stocks. Think or Swim allows you to set your default stock commission choice in the setup window within their software and/or web based trading application. The two options are:
- Pay Only $.015 per share with a minimum order of $5. You will have to purchase at least 340 shares of any particular stock to reach the $5 minimum order. Brokers like TradeKing and Sogotrade charge less than $5, and you can purchase as many shares of regular common stock (over $1) as you like. Unless you plan to purchase a large number of shares, you may be better off buying stock with a different brokerage
- You can also pay a flat rate of $9.95 per trade. It’s better to use this pricing model if you plan to buy more than 670 shares at any given time. If you’re a high net worth investor, you should take advantage of the flat rate pricing plan to avoid paying any extra fees. This option is comparable with Etrade, Fidelity, and TD Ameritrade, and makes good sense if you are constantly making rather large stock purchases.
Mutual Funds: Get 3 Trades for Free Every Month
Think or Swim offers one of the most attractive mutual fund fee policies I have ever witnessed. You receive 3 free trades every calendar month, then only pay $15 for each additional trade. While brokers like tradeMonster don’t charge you any sell fees, you stay in the black as long as you only make a few mutual fund changes each month.
Think or Swim is a great broker for options traders who may hold a few mutual funds that require minimum attention and decision making on a monthly basis. It’s like receiving a Free $45 coupon every month just for being a valued Think or Swim client.
Bonds: Very Complicated Pricing Structure. Not Pleased.
I wouldn’t recommend purchasing any bonds with Think or Swim. For one, the pricing structure is extremely complex, and relies more on maturity dates and bond type than it does on flat rate pricing. However, the maximum cost per corporate or municipal bond is only $2, making it a viable option if you don’t mind the uncertainity of the bond pricing model.
Treasury Bonds and T-Bills are very expensive purchases, plus you need an order minimum of $25,000. Treasury Direct is the best place to purchase these types of securities, plus there are zero minimums there as well.
Futures Contracts: Including Exchange Fees
Think or Swim charges $3.50 per futures contract which includes any exchange fees as well. You can save a bit of money with a rather large trade because Think or Swim will be liable for the robust exchange fees. Regardless of trade size, you only pay less than $4.
Forex Currency Rates: Spread or 1,000 lot increments
The Currency pair pricing is pretty tricky. There are two specific types of commission fees:
- FX Non-Commission is when currency pairs trade in increments of 10,000 units (and do not contain a ‘#’ symbol suffix.) There are no additional fees or charges - thinkorswim is compensated through the spread.
- FX commission is when currency pairs trade in increments of 1,000 and are subject to a fixed commission structure based in counter currency units (see chart below). For example, a 1,000 lot EUR/USD trade would be USD $1.00 ($1.00 minimum and/or $0.10 per 1,000 units). The commission using USD/JPY trade of 5,000 would be 90 Yen.
Most forex brokers attempt to profit using the spread premium only, giving Think or Swim a leg up against the competition.
Margin Rates: Credit or Debit
Depending on your choice, you can receive a Think or Swim credit or debit interest deposit to trade on margin. Think or Swim provides two specific rate equations:
- Credit: Lesser of Daily or Target Fed Funds - .90%
- Debit: Greater of Daily or Target Fed Funds + 7.45%
This will give you the ability to borrow money at a very attractive rate. The debit rate is fairly high when compared to brokers like TradeKing and Zecco. However, Think or Swim has a separate margin rate schedule for debit balances over $50,000. If you plan to trade under $50k, then Think or Swim is an expensive broker to use for extra leveraging.
$0 IRA Fees
Lastly, the Think or Swim IRA charges $0 annual fees to its clients.
Think or Swim Account Opening Process
Thinkorswim has a nice registration process. The standard questions and forms take only a few minutes to fill out. Downloading and installing the desktop application is surprisingly fast and pain free. My only minor complaint is the requirement to mail or fax a customer signature card when many other brokers have electronic identification processes.
The process goes like this:
- Select your account type and fill out some net worth questions
- Complete your personal information and sign it electronically
- Verify the standard NASDAQ, NYSE, and AMEX quote agreements
- Choose a funds transfer service with a minimum deposit of $3,500.
- Mail or fax a copy of your customer signature card. This is obviously a pain and can be replaced with another verification process to ease the pain of signing up
Think or Swim Trading Platform & Tools
Think or swim is really well known for its robust charts, tools, and different products suited towards active traders. You can perform the following order types:
- Market
- Limit
- Market On Close
- Limit On Close
- Stop Loss
- Stop Limit
- Trailing Stop Loss $
- Trailing Stop Loss %
- Trailing Stop Limit $
- Trailing Stop Limit %
- Conditional
The above traders are only available for stock, options, and single leg options contracts. Futures and Forex traders omit a few of the above order types.
Think or Swim features a limited number of research tools. The Mytrade application is an interesting idea and is well implemented. The Gadget tool has some useful applications and even includes an options to view a streaming feed of CNBC.
The stock screener application needs some work before it is useful. We were not able to find an events calendar, market commentary or research reports. Thinkorswim could really use some additional research tools, many of which are standard features found at most other brokers.
These charts simply blow away the competition. Nearly every feature you could want is here and best of all most features are customizable down to the smallest detail. The only real issue with the charts is that because of the power, flexibility and sheer number of features available there is a steep learning curve.
Once users become accustomed to the interface, however, this is by far the best in class charting solution. Those looking for a professional level charting application need to look no further than thinkorswim. To get a feel for the trading platform, watch this video demonstration of placing a buy/sell order with Think or Swim.
Video Demonstration of Think or Swim Trading Platform
Think Desktop: The Premier Downloadable Software for Traders
Think or Swim’s robust desktop platform for your computer has some really cool features like Live CNBC streaming, Forex currency trading capabilies, state of the art monitoring services, and powerful quotes packages to boot. Here’s a quick run down of the application tools they offer:
- Alerts: For any stock, option or spread order you can trade, you can also be alerted when it reaches a certain price. Using the same single-click order entry functionality on the Trade page, you can create price alerts that will be sent directly to your email.
- Charts: Analyze moving averages, oscillators, Fibonaccis, comparison charts, trendlines and more - there are dozens of studies you can apply to stocks and indices. You can see intra-day and historical charts, and even have them streaming.
- Monitor:See all your positions summarized or drill down for greater detail, with all the greeks and profit/loss updated in real-time. Beta-weight them against a symbol of your choosing. You can even create orders and see all your trade activity for the day, including working, filled and cancelled orders.
- Prophet: uses charting technology provided via Prophet.net. It includes many of the same features as TOS Charts (streaming data, comprehensive technical analysis, drawing tools, etc.).
- SpreadBook: You can see all the spread orders that thinkorswim customers are working. You can sort by underlying stock or index, or by spread type. You can see each order’s limit price as well as the spread’s current mark. But don’t worry, SpreadBook is completely confidential. Plus, with a single click you can analyze or submit an order based on one of the spreads.
- SpreadHacker: Spread Hacker™ is the Industry’s most advanced and innovative way to find defined-risk option trades quickly and efficiently. This real-time analytical tool puts the advantage that floor traders have had for years at your fingertips. Displaying six different strategies grouped by symbol, price, implied vol, and probability of success, Spread Hacker™ will let you find trades that meet your criteria with a simple click.
- StockHacker: Here is where you can scan across all exchanges for stocks that meet your criteria. Search for bullish or bearish patterns in technical and fundamental indicators. Let the technology do the work of sifting through the data so that you can concentrate on the trade.
- ThinkBack: thinkBack gives you the ability to see historical option quote data, enter simulated trades based on those quotes, then track the p/l and greeks of that trade over time.
Web Based Trading: Trade over the Internet
If you prefer to trade via the WWW, Think or Swim offers a comparable internet trading platform with many of the same features as Think Desktop.
Mobile Trading: Trade with your cellular phone
Think or Swim may offer the most powerful cellular based trading platforms available to traders. I have yet to see such a powerful combination of trading platforms available to both smartphone and generic cell phone users.
- iSwim: The mobile application for iPhone and iPod Touch Users
- Think Anywhere: The mobile application for Pocket PC users
- ThinkMicro: The mobile application for Blackberry and Nokia users
- ThinkMobile: The basic mobile application for generic cell phone users
- ThinkPod: The newest slim cellular browser for generic cell phone users.
I’m excited to see Think or Swim embrace the rapidly growing trend of cell phone use for tasks such as weather, traffic delays, and yes even managing your investment portfolio. These powerful mobile applications also tap into lucrative markets like China and Japan where cell phone use grows much faster than in the United States of America.
PaperMoney: Trade with $100k in virtual money
Think or Swim provides a fun virtual trading demo application called paperMoney. It works with all think trading applications, and it is essentially a virtual trading module. You receive $100,000 in virtual play money to experiment with. This application is very similar to TradeMonster in its purpose and use.
Think or Swim Customer Service
Think or Swim is well known for its fast and timely customer service. To show you how much they care, check out this short anecdote where Insane Money had a Think or Swim representative call him about a possible error before he could even pick up the phone!
Today I bought a long call on WYNN Sept 80 for a debit of 19.50. As a standard operating procedure I would put on a stop loss at 10% below the purchase price. So I entered my order to sell GTC at 17.60. Within a few minutes it was canceled and I got a call over at Think or Swim. They said, “We think you may have made a mistake entering that GTC order. Did you mean for it to be a limit or a stop loss?”
Sure enough, I had screwed up the order and they saw it and fixed it. That one act alone saved me thousands of dollars.
That’s FANTASTIC customer service!!! Great job fellows!
That’s a really impressive story. Kudos to Think or Swim!
If you wish to contact Think or Swim, you can reach them via e-mail, telephone, or live chat. They are available to answer any questions, concerns, or complaints you may have.
For $50 per month, you can sign up for their exclusive coaching service called Swim Coach. You receive access to your own trading coach where you can ask questions and get 1 on 1 help. You also get audio, Q & A, and live instruction tutorials through the service as well.
Think or Swim Education and Learning Center
Think or Swim educates traders with their very own learning center called Options School. You get free access to:
- Swim Lessons: a basic explanation of different types of options trades and concepts
- Option Playbook: a rundown of basic and complex options trading strategies
- Glossary: a broad list of common word and phrase definitions
Overall, I think Think or Swim should improve their educational center. It is pretty average compared to the training offered by TradeKing or Etrade.
Think or Swim Promotions
Most brokers offer some sort of promotional offers to entice clients to use their trading services. Think or Swim offers multiple promotions like:
- Customer Referral Program: Refer a friend and you receive a $50 credit in your trading account
- Account Transfer Rebate: Switch to Think or Swim and receive up to $100 in transfer fees as a rebate
- High Speed Internet Rebate: Make 40 or more traders in a month and receive a high speed internet access rebate worth $39.95
- Free Monkey: Every US customer receives a free Think or Swim money as a token of TOS’s appreciation. Cool beans!
Think or Swim Pros and Cons
Pros
- Robust Desktop and Mobile Platforms
- $0 Annual IRA Fees
- Free Paper Money Virtual Account
- Fast Customer Support
- 3 Free Mutual Fund Trades Per Month
- 1 on 1 Coaching Membership Available
- Highly Competitive Options fee schedule for high volume traders
- Free internet for active traders
- Owned by world renowned TD Ameritrade
Cons
- High Flat Rate Stock Trading Commission
- Poor Educational Center
- Lack of research tools
- $3,500 Minimum Deposit Opening Balance
Think or Swim Final Verdict
Think or swim is a great broker with a very niche customer in mind. It will work great for:
- Active Traders
- Options Traders
- Professional Traders
- Day Traders
Think or swim is a bad option for:
- Beginner traders
- Long term investors
- Forex traders
- Swing Traders
Think or Swim is hands down the best options broker in the marketplace. They back up their attractive options pricing model with great platforms, good enough tools, and extraordinary customer service. I recommend you start trading options with Think or Swim today!
6 Customer Reviews of Think or Swim
Mark on January 7, 2009
COMMISSSION:
A well structured commission rate is to be found here with options attracting the lesser fee of $2.95 per contract, or $9.95 plus $1.50 per contract, also special rates for regular traders are offered. Stocks can be traded for $0.15 per share or a flat fee of $9.95 per trade, the rates for bonds vary between $1 and $2 depending on the maturity, and mutual funds can be traded up to 3 times a month for free and $15 each after that.
CUSTOMER SERVICE:
Customer service is impressive with contact available via several email addresses and phone lines between 6am and 6pm (9pm for Forex) CST, enabling direct communication with the appropriate department for your query. A web form email and live help are also offered.
TRADE TOOLS & SERVICES:
Another strong point lays in the variety of trading tools that are to be found in the Think-desktop, they include alerts, analyzer, charts, news, spread / stock hacker and quotes, with al the clients account records easily found in one place. Other services to benefit including software support, education resources, marketing information and a blog.
WEBSITE & ACCOUNT SECURITY
Security seems to be a basic feature, with standard procedures in place such as the use of SSL encryption and verification phrases for log in security. Possibly an average level of acceptance for the user, but it would be nice to have seen a little more in this department.
Lee S on March 2, 2009
Absolutely Awful Forex!
I cannot comment on stock or options trading with this broker.
The Forex trading here is dreadful. For a company that is supposed to be all about the technology, they really do not get it. This is only the third company I’ve ever used for forex trading but, it is so bad I cannot imagine anyone else could be worse. The only reason I opened the account was the desire to trade exotics. The trading software doesn’t come close to the intuitive, easy to use tools available at Gain/Forex. com, I don’t think they are particularly good. If I execute a trade from the ‘Dashboard’ the trade is not even tracked. Opening position prices are not kept. Everyday the opening position price changes to that day’s opening price. Shouldn’t that be tracked as a rollover transaction? Where is the spectacular technology? I am closing this account and going elsewhere. - P.S. Did I mention I’m dissatisfied?
Cory on May 6, 2010
The worst customer service I have experienced and I have been a Day Trader for 9 years. Charts are extremely slow to load and order executions are horrific. The slight upside is very nice charts when they load and nice tool selection.
stock trader on May 13, 2010
There has been a huge drop off in the quality of customer service. MASSIVE!
scott on May 17, 2010
initiated an ACH transfer to my checking account, at 10:30 am.
they asked for confirmation at 4:45 pm and told me the transfer process wouldn’t begin until the next day because i did not provide confirmation before 4 pm. when i explained i couldn’t provide it before 4pm because they didn’t ask for it until after 4pm, they gave me the “oh well” attitude….so, i have $100,000 floating in the TOS back-office. the only thing reflected on my account is the fact that my balance is now $100,000 less than it was this morning. the customer service has done a 180 since TD Ameritrade took the helm.
scott on May 17, 2010
nitiated an ACH transfer to my checking account, at 10:30 am.
they asked for confirmation at 4:45 pm and told me the transfer process wouldn’t begin until the next day because i did not provide confirmation before 4 pm. when i explained i couldn’t provide it before 4pm because they didn’t ask for it until after 4pm, they gave me the “oh well” attitude….so, i have $100,000 floating in the TOS back-office. the only thing reflected on my account is the fact that my balance is now $100,000 less than it was this morning. the customer service has done a 180 since TD Ameritrade took the helm.
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