Friday, 20 September 2019

Just2Trade Review 2019

Just2Trade Review 2019
23 Jan
11:03

While Just2Trade might not be as well-known as larger brokers such as Charles Schwab and Fidelity Investments, it’s been around a long time all the same, since 1981. Just2Trade is really focused on one thing — low trading commissions — and if that’s what you need as a trader, this broker may be just what you’re looking for. However, that obsessive focus on price comes at the cost of perks that are quite often standard at other (admittedly higher-cost) brokers.

Who should consider Just2Trade

Low trading costs generally are a positive thing for beginning investors because they allow them to roll up more earnings in their portfolio. While Just2Trade focuses on low commissions, it’s really a broker for high-volume traders and professionals who know what they want — that is, low costs. The lack of substantial research and other frills may leave some new investors feeling lost, while the higher account minimum certainly doesn’t encourage new investors to join the fold either.

Just2Trade fees and features

Stock trading fees
  • $2.50 per trade (account balance $2,500+)
  • $4.00 per trade (account balance $2,000-$2,499)
Account minimum
Tradable securities
  • Stocks
  • ETFs
  • Mutual funds
  • Options
  • Futures / commodities
Account fees (annual, transfer, inactivity)
  • $50 for IRAs with less than $10,000 and fewer than 40 trades
  • $80 full account transfer fee
  • $25 partial account transfer fee
  • $15 per quarter unless five trades have been made per quarter or there is at least $50,000 in the account
Commission-free ETFs offered
Mutual funds (no transaction fee) offered
Offers automated portfolio/robo-advisor
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Custodial Uniform Gifts to Minors Act (UGMA)/Uniform Transfers to Minors Act (UTMA)
  • SEP IRA
  • Trust
Mobile app iOS, Android
Customer support Phone, Chat, Email
Research resources
  • SEC filings
  • Earnings press releases

Strengths of Just2Trade

  • Low stock trading commissions: Just2Trade goes all in on this one strength, and it’s the broker’s standout quality by far. If low stock trading commissions are what you need, this broker probably will be at or near the top of your list. If you’re on the per-trade pricing plan, you’ll pay just $2.50 per trade — very favorable compared to key players such as Fidelity ($4.95), Charles Schwab ($4.95) and TD Ameritrade ($6.95). It even gives noted low-cost broker Interactive Brokers a solid run. With Interactive Brokers charging $0.005 per share (with a dollar minimum), investors regularly buying more than 500 shares per trade should find that Just2Trade’s flat pricing comes out ahead.

    It’s not just the per-trade pricing that clients should find attractive, and the broker competes well with Interactive Brokers here too. Just2Trade offers per-share trades starting at $0.0025 per share (for less than a million shares a month) and then goes as low as $0.001 (for accounts trading at least 5 million shares a month). Interactive Brokers’ pricing doesn’t get that low until you trade 20 million shares, though it goes even lower once you surpass 100 million shares.

  • Low options trading commissions: Just2Trade scores well for providing low options trading commissions too. The broker charges a base fee of $2.50 and a per-contract fee of $0.50 on its per-trade plan. That compares favorably to the full-service brokers and even against Interactive Brokers’ pricing schedule of no base fee and $0.70 per contract.

    For example, on a trade of 10 contracts, Just2Trade charges $7.50, while Interactive Brokers (typically) charges $7.00. If you trade more than 12 contracts at a time, Just2Trade is cheaper and remains cheaper than Interactive Brokers until you trade tens of thousands of contracts a month.

  • Access to multiple futures trading platforms: If you’re trading futures, Just2Trade gives you access to several trading platforms, including Sterling Trader Pro, one of the top direct-access platforms. You’ll also have access to OEC Trader, CQG Trader and the iBroker mobile app. You can test out a demo of the first three to see how they operate.

Drawbacks of Just2Trade

  • Limited research and support: If you need a broker that provides research, investing education and general support, then Just2Trade probably is not for you. While the broker provides coverage of stocks using data from Morningstar, it doesn’t compare favorably to the extensive level of research offered for no extra fee at top brokers such as Charles Schwab and Merrill Edge. And these brokers, as well as Fidelity, are well-noted for their education offerings — getting new investors up to speed on how to invest with webinars and other tools.

    If you’re a high-volume trader or an investor who gets research from other sources, the limited research and support won’t be a drawback to you at all.

  • No commission-free ETFs: Again, another thing that works against Just2Trade in attracting beginning investors is the fact that it doesn’t offer any commission-free ETFs. These are a staple for newer investors because they provide immediate diversification at a low cost. That said, the broker’s $2.50 trading commission is not exactly a tall order either, so beginners may be willing to overlook this drawback. Still, free is free.
  • High minimum monthly commissions: If you’re trading on the broker’s per-share plan, Just2Trade requires a minimum of $333 in monthly commissions. If you don’t rack up that bill during the month, it’s still coming out of your account. Of course, this fee doesn’t apply to the broker’s per-trade plan, which has no minimum monthly trading commission. It should go without saying that you’ll have to trade a lot of shares to reach that minimum.
  • A high account minimum: The broker’s relatively high account minimum also works against newer investors. Just2Trade requires a minimum of $2,500 in the account to begin trading, and if the amount falls below that minimum, the price per trade actually rises to $4. If your account dips below $2,000, you may be required to deposit more money before you’ll be able to resume trading. If you’re on the firm’s per-share pricing plan, you’ll need a minimum of $25,000 to trade.

Is Just2Trade safe?

Just2Trade has been around for nearly four decades and is a member of the Securities Investor Protection Corporation (SIPC). In the event that the broker is unable to return your assets, this membership protects investors up to $500,000 in assets (including up to $250,000 in cash-only assets). The broker goes one better, though, ensuring each account up to $25 million with excess coverage provided by Lloyd’s of London. None of this coverage will keep your investments in risk assets from declining in value, of course, but you are protected from financial troubles that originate with the broker.

Final thoughts

If finding the lowest trading costs is your M.O., then Just2Trade ought to be in the running for the home of your new account. It promises low trading costs and delivers. However, it’s a one-trick pony, and those looking for more — research, for example — probably will want to look elsewhere.

Those who need a full-service broker while still getting low trading costs could check out Interactive Brokers. Those needing more guidance or research and willing to pay a bit more could consider Charles Schwab, Fidelity Investments and even Merrill Edge.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

James F. Royal, Ph.D.

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Source: https://www.magnifymoney.com/blog/investing/just2trade-review/

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