A popular question that I get quite a bit from the traders who follow this blog, is what brokerage firm do we use for our trading and why. SharePlanner trades with thinkorswim (short name is TOS). And I have to say that I am very pleased with their service. They are by far the best brokerage firm that I have used to date. In the past I have used Bank of America, TradeStation, TD Ameritrade and OptionsXpress and simply put thinkorswim outdoes them all. Now I’m not saying this because I am going to be incentivized for doing so. I have no contract with them (at least not of this writing) and I am under no obligation to do so. I am simply just trying to provide you with information that will help you trade better in the stock market.

Recently thinkorswim was bought out by TD Ameritrade, which raised a lot of concerns for me. TOS is what I call a rogue brokerage firm – they are very non-traditional, and are a great alternative for those who are tired of being unappreciated by the larger firms out there. So now the question begs whether they are being acquired only to be sucked up in to TD Ameritrade and to be forgotten forever or will they let them stand alone as a separate entity. So far they have heard the concerns of the TOS traders and they are keeping both firms separate including the commissions structures.

Here is a letter that I received recently from TOS in regards to the acquisition and the steps that are being taken:

Today TD AMERITRADE announces the close of the acquisition of thinkorswim. You’ve probably seen a few changes since the deal was first announced five months ago.

Four software releases packed with enhancements including single-click complex order routing for active traders, complete flexibility on chart windows, over 10 new futures and futures options products, spreads for futures options, new risk vs return analytics, myTrade Twitter and order routing integration, fast tab access, and lots, lots more, with more coming soon.

Then thinkorswim Advisors introduced live trading sessions in the Red Option swimCoach online seminars, taught thousands of students at 50+ free seminars around the country, and have standing-room only presentations at trade shows.

Does that sound like a company that’s “disappearing”? Didn’t think so.

The bottom line is that what thinkorswim is best at-delivering powerful, user-friendly trading technology, supporting active traders over a wide range of products, and teaching the world a smarter way to seek risk management and spot potential opportunities-isn’t going anywhere. In fact, we’re pushing further and faster than we ever have.

What TD AMERITRADE brings to the table are great account management tools, strong customer service skills [I doubt that], and some features that help fill in the “gaps” of the thinkorswim platforms. The goal of the acquisition is to redefine and set a new standard for the online brokerage industry. That’s what thinkorswim has always been about.

The plan is that you’ll continue to trade on your favorite thinkorswim platform, at your current commission rates, and talk to the same people (some new ones, too) when you need help. All you have to do is find your next trade.

Now the letter doesn’t give any assurances that they won’t be full merged into the TDAmeritrade platform – hopefully not. With TD I was on the phone with them constantly questioning the execution of my orders, but with TOS I have yet to ever have to call them about anything questionable.

Another benefit to using TOS is the free software platform and the free web-based trading platform – neither one will you every have to pay a fee for. Their commission structure for stocks are two fold: pay 0.015 per share with a $5 minimum or trade for a $9.99 flat fee. If you make more than 40 trades or 20 round trips in a given month they will also provide you with a $40 discount to help offset your internet bill – which I get every month!

One more praise on TOS’ behalf, and I recommend you trying if you trade a lot of shares and make a lot of trades: negotiate your commission rate. At one point, because I trade a large dollar amount with every trade, I was getting killed on my commissions which could get as high as $30-$60 round trip. You’re talking about a lot of money just to place a trade. And the reason why I was paying so much was because my style of trading requires that I use “stop-orders” which don’t qualify for the flat fee of $9.99. I was fed up, because it was eating into my profits so I finally called TOS up, thinking I was going to have to rip into them but before I could hardly say a word, they offered my $8/trade no matter the trade type. The phone call lasted probably all of two minutes! So I am definitely loyal to TOS and always will be unless they get flaky in the TD acquisition.

So all in all, TOS does everything they can to cater to the trader; their software platform is by far one of the bests that I have ever used and their executions are great too. But I’m keeping a close eye on them during this transition period and if TD tries to goof them up like they did with their own company (I traded with TD Ameritrade before switching to TOS), then I will hit the road looking for another brokerage firm to give my business to.