This is just a follow-up my previous post on Scottrade enabling electronic deposits, but not withdrawals. You can get withdrawals too if you (a) can get $5,000 in total account equity (stock holdings + cash), and (b) use an online bank account that allows external links (ING, Emigrant, HSBC, etc.).

No tricks here, if you satisfy (a) Scottrade will give you check writing capability upon request. You can then either use the checks themselves or the account and routing numbers on them to link with other accounts. If you use a CashEdge-based system like with HSBC Direct, it’s even built in; Here’s a screenshot. They say that if you go below $5,000 later you may lose checkwriting privileges, but I’ve been under for about a month now with no consequences.

The SEC has a nicely-written article about how your stock trades are actually executed, and how it may affect the price you buy or sell at. This stems from the fact that usually your broker has to send your order to a market maker to actually do the trade, which may in turn pay your broker a rebate. Critics say this raises questions about whether your order will truly be routed to get the best price, and I would tend to agree. However, many brokers do some form of this, and many rebates are linked to supplying enough liquidity for each market maker.

In looking for a good comparison of trade execution between different discount brokers, I found this recent Barron’s broker comparison of 27 brokers, including many you’ve seen mentioned here:

Sample Trade Execution Ratings (out of 5, higher is better)
MB Trading – 4.8
Fidelity – 4.4
E-Trade ‘Serious Investor’ – 4.2
Scottrade – 4.1
TradeKing – 3.8
Schwab – 3.7
Ameritrade I-Zone – 3.4
FirsTrade – 2.8

Overall, the brokers that target very active traders got higher scores than the more mainstream ones. Although Scottrade does accept payments for order flow, they rated a 4.1 out of 5, which was above average in this group. MB Trading achieved one of he top scores 4.8 with its advanced “smart” order-routing features. It remains to be seen how Zecco.com does with their free stock trades.

As the Barron’s article would suggest, trade execution is still one of several criteria with which to judge your potential broker, and any differences remain hard to quantify with dollar amounts.

People are still asking me for Scottrade referrals, but I’m not allowed to give them out anymore. Instead, I’m going to start a list of My Money Blog readers who already have accounts that are willing to give out referrals. If you are interested, please contact me and I’ll put you on the list.

Please note that you may need to share your name, e-mail, and/or branch location when giving out a referral. Tell me if I referred you initially, and I’ll give you priority. Otherwise, I’ll just run through the list in order, everyone gets a shot. The referrals will be between just the reader and referree, so don’t even mention this blog when signing up. Hopefully this will resume the referral sharing love.

Added: I reserve the right to move on to the next person in the list if the referrer contacted doesn’t respond within 24 hours, at the request of the referree.

Added 10/14: I have a good number of people now, thanks everyone. You can still e-mail if you want, but know that there will be very little chance that I will use your referral.

Maybe new broker Zecco (my review) was right and stock trades really are a commodity now. Today, Bank of America announced that they will be offering 30 free online trades a month for customers with at least $25,000 in combined deposits. Not surprisingly, shares of discount brokerages like E-Trade (ET) and Ameritrade (AMTD) are not doing so hot, both down ~10% today.

It’s only available in the Northeast at first, nationwide later. Thanks to Corey and everyone else for the tip.

I don’t know how long this has been out, but I just noticed in my Scottrade brokerage account that there is a new service called Money Direct that allows you to electronically deposit money from a bank account. Note that I said deposit only, because you can’t use the service to withdraw. What’s up with that? How disappointing.

The service appears to use Yodlee Funds Transfer as the back end, which is similar to the CashEdge service banks like HSBC and Bank of America use. You can basically link any savings or checkings account as long as you have a routing number and account number. Verification is either via website login information or trial deposits.

Here is some more useful info from the Money Direct FAQ:

Q. What is Money Direct?
Money Direct allows you to electronically deposit funds from banks, credit unions, and select brokerage accounts into your Scottrade account. Money Direct utilizes the Automated Clearing House Network (ACH) process.

Q. How soon will funds be available for trading after I initiate a deposit using Money Direct?

Deposit Initiated On *	Your Checking/Savings Account Debited On	Your Scottrade Account Credited On **
Monday	Tuesday	Thursday
Tuesday	Wednesday	Friday
Wednesday	Thrusday	Monday
Thursday	Friday	Tuesday
Friday	Monday	Wednesday
Saturday	Monday	Thursday
Sunday	Monday	Thursday

*Deposits requested after 8:45 PM EST will be initiated on the following business day.

**Money Direct takes three business days to settle. In the case of a bank holiday, Money Direct may take four business days to settle.

More transfer delays, boo. Sigh… I suppose this service is better than nothing. However, if you have $5,000 with Scottrade you can already get checkwriting access and use that information to link up your account for both deposits and withdrawals through various online savings accounts. And there is less ‘lost’ time between debits and credits. This is what I have been using for months now as a workaround, I’ll make a more detailed post on it if there is interest.

For my other experiences with Scottrade brokerage overall, please refer to my Scottrade review.

As I’ve mentioned previously, I have been enjoying a free trial courtesy of George of Fat Pitch Financials Contributor’s Corner and here is my review.

Basics
The main premise behind Contributor’s Corner is to provide “arbitrage and special situation opportunities in the stock market for small time investors.” One of the more common examples of this is a company trying to “go private” by buying back all the existing publicly traded shares.

For example, let’s say BigBob Enterprises (BOB) has 100,000 shares currently trading at $9.00 each. If it wants to go private, it has to buy back all the shares at a price that the current shareholders as a whole would approve. So maybe it files with the SEC that it would like to buy back at $10.00 a share, giving the potential for profit.
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Just as surely as there will be an article entitled “Lose 10 lbs On 10 Minutes A Day” or “Easy Abs For You” on the cover of Men’s Health magazine this month, there will also be an in big letters “Six Stocks To Own Right Now” or “5 Mutual Funds To Protect Your Money” on the cover of one of the personal finance magazines this month. I guarantee it!

Why? Because “Low Cost Index Funds A Good Idea… Again” every month would get very stale and would stink at selling magazines! In addition, even the construction of the articles themselves is very predictable. It’s almost like they use a Mad Libs form (remember those?):

1. Give me the name of a recently successful mutual fund manager.
2. Give me the name of a formidable-sounding management company.
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A few years ago, I commited a few thousand dollars to “play money” with which I was supposed to use to learn to become a stock market wizard. I later increased it to $5,000. I learned some basics like the different types of trades, bid/ask spreads, P/E ratios, growth rates, and started buying and selling stocks in $500 increments ($5/trade, so 1% commissions in and out). I really never got around to learning anything in-depth, as I started reading numerous books that convinced me that it was highly unlikely I could ever beat the market over the long haul. Not impossible, but unlikely. Although I read a lot of various investing sites that talk about individual stocks, none of them have really convinced me otherwise.
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Despite some last-minute scares, for those keeping track of the Advanced Nutraceuticals reverse split that I am participating in, it looks like there has been some progress. From their most recent SEC filings and more specifically this press release:
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