Barron's published (subscription required) its carefully-watched annual ranking of online brokerages over the weekend. The top performing web-based online brokerages with their total point rankings:
- optionsXpress 35.5
- Ameritrade - Apex 30.8
- Fidelity 30.5
- E*Trade - Power E*Trade 29.9
- Wall Street Electronica 29.5
- Muriel Siebert 29.2
- Schwab - Active Trader 29.2
- Schwab 28.1
- TD Waterhouse Trade Central 28.1
- E*Trade - Priority E*Trade 27.0
- Barron's gives the brokerage services star rankings based on their overall point scores. optionsXpress won four and a half stars; Ameritrade Apex, Fido, and Power E*Trade won four stars; and the others got three-and-a-half stars. So in Barron's view, the active trader services from Ameritrade and Power E*Trade are equally good, but Schwab's lags slightly.
- Active trader services are important to the brokerages because active traders account for a disproportionate amount of trades (and profits).
- Note: Schwab's regular service (not for active traders) was broadly equal (equal star ranking) to E*Trade's (Priority E*Trade). Ameritrade Apex requires $100k in assets; no sign of the non-Apex Ameritrade in Barron's ranking.
- Schwab's stock has outperformed both Ameritrade's and E*Trade's year to date, perhaps because AMTD and ET are more leveraged to trading volumes, and trading sentiment has turned down. See chart below.
Full disclosure: at the time of writing I'm short SCH.