Saturday, June 22, 2019

My Brokerages: Fidelity, Schwab, ETrade

If you have been a reader for a while you know of all the brokerage drama I've had.  It's all due to the tiny dark stocks I like and the industry moving against them.  I'm sure it doesn't make the brokerages any money so I understand.  I'm happy to report I have brokerages that work great for me.

The latest news is Penntrade has shut down so I transferred those accounts to Schwab.  I love Schwab.  I now use Fidelity, Schwab, and ETrade.  I hope this is my last brokerage related blog post...

You can read my broker mania here and let me just give a quick recap.  Years ago I used Fidelity for my 401k and it was all good until they blocked dark stocks in early 2016.  I had opened two accounts at Optionshouse in 2015.  They let me trade anything so I was great until they abruptly told me I had a month to get out.  I franticly searched for any brokerage to take my tiny dark OTCs in kind and only 2 of the 40 I contacted said they'd take my account transfers.  I went with T Rowe Price.  TRP was OK but soon I found two issues that bugged me with the main one being that I had to call in orders over 50k shares.  I then transferred to Penntrade.

Trouble at Penntrade started after only a few months as their clearing firmed caused them to stop online OTC trades in early 2017.  They also had higher fees of around $30 but I overlooked the issues since they would let me trade anything I wanted.  They always told me they were working on the online trading issue and I know they were a small boutique outfit so I let it be.  I always thought about transferring but had such issues getting in somewhere after Optionshouse I was in no rush.

A few weeks ago Penntrade forced my hand.  They've closed down.  See below for the message right now on their website.  I think Penntrade is the online trading platform of Paulson and RBC Correspondent services somehow is involved in the back end because my statements always said their name somewhere.  I don't know if Paulson is still around or what else RBC does.

So I called Penntrade.  The guy was not happy with what was going on but I didn't get into the back story.  Main thing is all accounts were transferring to Glendale Securities, a full service firm with no online trading.  Right there I knew it was time to move.  

In the mean time I had started using Schwab about a year ago when we sold our house.  I knew they would let me trade anything I wanted so that's where I opened up a brokerage account.  It's all online which is a major plus.  I'm a full time engineer and cannot be calling a broker all the time.  

When I had contacted all those 40 brokerages in the fall of 2016 I was not certain Schwab would allow an account transfer with the tiny dark OTC stocks inside.  For whatever reason I couldn't get a clean answer from them.  Now that I needed to move I thought I'd try transferring into Schwab and cross my fingers.  IT WORKED!!  I was so relieved.  I moved 3 accounts and everything made it through.  We are still moving one because of missing some RBC form.  It'll go through in another few days.  Then I just need my wife to give me trading authority and we'll be back in business.  

I am so relieved.  I hated calling in to Penntrade and it really decreased my activity.  I avoided it as much as possible.  I know have accounts at Fidelity, Schwab, and Etrade.  

I have one account at Fidelity and it's really just because I didn't want to move it when I changed jobs last year.  Fidelity was the 401k provider at my last job so there it is.  I have their BrokerageLink option which lets me trade individual stocks.  I cannot trade dark stocks here.  I am actually very active in this account and it's has done well.  I love Fidelity's website.

When I started the new job last year I was not sure if my new company's 401k would have a BrokerageLink type option or if they'd only allow mutual funds.  I couldn't take that risk and was not super motivated so I stayed at Fidelity.  

This account I just got over the past year because I get some Restricted Stock Units (RSUs) at my new job.  These automatically flow into an Etrade account.  When I first got it I did test buys for HYDI and IOMT.  They went through so I stayed.  I have one after tax brokerage account here.  They let me trade anything and it's a cheap online broker.  

My wife and I will have 4 accounts here once this last transfer goes through.  I have a Roth IRA.  My wife has both a Roth and Traditional IRA.  And then we have a joint after tax Brokerage account.  They let me trade anything I want and it's super cheap.  I can do grey market, dark, penny stocks, OTC, whatever.  

If anyone asks me for a recommendation lately I say Schwab.



  1. Have you tried interactive brokers?

    1. I've talked to them. Never had an account there. They don't allow grey market stocks (SIMA, IOMT)

    2. I also remember hearing they would not allow a buy order if there was no current ask on the stock

    3. I use IBKR, they take a very aggressive position on orders that could be "manipulative"; you end up having to use the chat to have them allow your limits all the time. But I've never had an issue with them allowing the orders. And the commissions are _dirt_ cheap.

  2. I dont understand when a stock goes to the grey market. E.g. I hold the pink sheet stock HERB, which is completely dark. It seems that this stock is not on the grey market, because I can still trade it with IB.
    On the other hand, STVVY on pink sheet is dark and on the grey (so called value) market and IB does not allow trading anymore. I could also buy HAUP at IB, which is completly dark, so it seems that this is not on the grey market as well.
    So it is unclear when a stock is transferred to the grey market.

    1. Yeah I don't know what exactly kicks a stock onto the grey market.

      Here's the definition from, "Grey Market, "OTC" or "Other OTC" is a security that is not currently traded on the OTCQX, OTCQB or Pink markets. Broker-dealers are not willing or able to publicly quote OTC securities because of a lack of investor interest, company information availability or regulatory compliance."

  3. I'm currently using TradeStation after it was recommended to me by Jan Svenda. Thus far I'm pretty happy with it. They allow the purchase of dark pink sheets and grey market stocks, trading fees are pretty low and there is no minimum account balance. They also accept international clients which was good for me since I'm based in the UK.

    1. Great tip, thanks David! Just completed an application with them :)

    2. I tried to transfer some IOMT (grey) and PRAC (no info / stop sign) into TradeStation, from Penntrade, and as predicted by Dan's research, they didn't accept it. FYI :)

  4. I am wondering however if it makes sense to buy stocks on the grey market. Basically, e.g. there is no protection against fraud by the major shareholder or management because the stock is dark. Further, it is possible that trading will completly stop one day. In this case, the stock is usually a cero.

    1. The exchange shouldn't matter. Fraud is everywhere. Evaluate each case individually.