I first opened up a Sharebuilder account in December of 2008 planning to buy stocks at a discount after the market crashed. Sharebuilder is an online broker from ING that allows beginner to intermediate level investors trade stocks, ETFs, mutual funds, and options. The reason why I chose Sharebuilder is because they require no minimum balance and have no monthly maintenance fees. You can make automatic investments on Tuesdays, where you can buy stocks in fixed dollar amounts from $0 to $4 a trade, depending on which pricing program you’re on. If you don’t have access to a computer, you can make a phone trade for $19.95.
Sharebuilder has two pricing programs. The Basic program is free, and real-time trades are $9.95, options trades are $1.50 per contract, and automatic investments on Tuesdays are $4 per trade. The Advantage program is a $12 per month subscription, but real-time trades are reduced to $7.95, options trades are $0.75 per contract, and automatic investments are $0 for the first 12 investments every month. Choosing between the Basic and Advantage program depends on how often you trade or make recurring investments. I personally switched over to the Advantage program, because I started trading options, and the contract charge is 50% cheaper.
Sharebuilder currently does not allow you to trade after hours or sell stocks short, and does not have advanced enough features for day traders. This is no problem for the average retail investor. However, if an event causes a stock to drop in price in the after market, a stop-loss order will not execute until the market opening. Sharebuilder technically allows you to sell stock and options the same day you purchased them, but the amount of web navigation required to trade makes Sharebuilder unappealing to day traders.
This high number of clicks you have to do to make a trade is the only criticism I have of Sharebuilder. In order to place a trade, you have to navigate through three web pages, which can be a hindrance when jumping on a sudden market opportunity. Once again, this is no problem for the buy and hold investor who doesn’t make high frequency trades. Occasionally, I have experienced glitches where Sharebuilder was down and did not allow me to place a trade, but this is rarely an issue.
Overall, Sharebuilder is the ideal broker for investors with beginner to intermediate experience who want to make money buying and holding stock, while getting a discount for making automatic recurring investments. I have been with Sharebuilder for almost two years now, and don’t plan on switching brokers in the near future. Their discount pricing and lack of any hidden charges makes Sharebuilder an ideal broker for the at home investor.