Sogotrade

Every few months, we at mysmp.com take a look at trading platforms and Sogotrade immediately caught our eye. Far too often the financial world focuses on the big fish and forgets about the small business owners who practice the art of day trading. During the Sogotrade review, their $3.00 flat rate trading commission had a bit of the wow factor. Many small and large traders alike rack up thousands of dollars per year in trading transactions. If these transactions could somehow be reduced, it could mean the difference between breaking even and some decent percentage gains. Sogotrade is currently leading the way in the evolution of trading commissions.

Sogotrade account


Opening a sogotrade account is much like any other broker. New clients have the option of opening an account directly on the Sogotrade site, mailing in the documents, or faxing them. There is also a $500 dollar minimum to open a standard Sogotrade account. The standard platform has real-time data, but has very basic functionality. Some of the basic capabilities are: (1) market screener, (2) etf center, and (3) market research center.

Sogoelite


Sogotrade has followed the lead of many retail brokers and offers a standard platform for investors, while offering a Sogoelite platform for active traders. Sogoelite provides (1) real-time charts, (2) technical analysis tools, and (3) time and sales data. Sogoelite is a downloadable application, while the Sogotrade standard is a web based application. A Sogoleite account requires a minimum $2,500 deposit, as well as a $10 monthly data fee for tick data.

Sogotrade commissions


Wasn’t too long ago that placing an order regardless of the size could run an investor $20 bucks each way. These high commissions and the fact you had to phone in your order did not foster an environment for active trading in the 80s and early 90s. However, with the Internet and fair market competition, active trading his now become a reality for many investors. This race for cheaper commissions has somewhat flat lined over the last couple of years as many retail brokers have fallen in the $7.99 - $9.99 flat commission range. Unlike retail brokerage houses, many direct access brokers provide both a flat trading fee and a per share model. So, if a trader knows they will be trading in small lots, this provides the ability to avoid costly commissions on the per share model. But if the trader will be trading in huge blocks, say 10k shares or more, the flat rate would be their best option. Now, what Sogotrade has been able to do is to merge the best of both worlds. Sogotrade commissions are so low, that in essence it allows both active traders and investors to enjoy low cost trading. To put this in perspective let’s say a trader is using a per share model where each share is $.01 in trading commission. This means that for every 1k shares it will cost the trader $10 bucks. So if the active trader were to purchase 1k shares it would cost them $10 dollars to open the position and $10 to close. So we are talking a total of $20 in commissions. Now if the day trader is only using 10k and buying a 10 dollar stock, this would represent .2% of any potential gains. Which in the day trading world is huge. The structure for Sogotrade commissions would allow the day trader to reduce their trading costs on the same trade down to $6 bucks for the round trip. This now cuts down the percentage cost from .2% down to .06%.

Below is a screenshot of the trading commissions which can also be found directly on the Sogotrade website.


SogoElite Commission


Sogotrade Elite provides a different commission structure. Since Sogotrade Elite is an active trading platform, it is on a per share model. The cost is .004 per share with a minimum of $1.00. So based on this schedule, 300 shares will cost $1.20, while 1000 shares will cost $4. Depending on your trading capital the standard Sogotrade account may prove more beneficiary if you are using large funds per trade. There is also a Sogotrade platinum account which costs $10 per month but has a $1.50 commission structure for trades that are smaller than 5,000 shares.

Sogotrade Review


Sogotrade Pros

There are a number of pros for using Sogotrade to conduct both long-term and day trading activities. Below are a list of the positives:

1. Great customer service – placed a call to their 1-800 number and received a real person on the phone in under 45 seconds
2. Low Cost – regardless of if you go with the standard Sogotrade account or the Sogotrade Elite, these are the lowest commission structures in the trading world
3. There are no maintenance or inactivity fees for Sogotrade standard or Sogoelite
4. ETF research center which allows an investor to review the snapshot, portfolio and risk associated with the security

Sogotrade Cons

All is not great in the land of Sogotrade. Below are some of the negatives:
1. Unable to make pre-market or after market trades in the standard Sogotrade account
2. Unable to place OTCBB trades in the standard Sogotrade account
3. Unable to trade options

Sogotrade Review Summary


Sogotrade like any other broker has its ups and downs when it comes to using their platform. The one thing however that is tough to argue is the relatively cheap commission structure. During a time where the U.S. Government is considering increasing taxes on active traders and also with the pain of the economic recession, it is hard not to see the value in these low trading commissions. Time will tell if Sogotrade will become the new leader in the discount brokerage arena. For more information, please visit http://www.sogotrade.com.
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