Barron’s Discount Broker Ratings; Will the Thinkorswim Platform Survive?

This past weekend, Barron’s unveiled its top 25 online discount brokers, and my favorite broker thinkorswim (SWIM) took the top spot:

We gave it 4½ out of a possible five stars, and the highest overall score. The company continues its blistering pace of innovation while offering customers multiple points of access, accompanied by great education tools. Customer support is top-notch, and a wealth of trading information comes at you from a variety of media while you are logged in to the platform.

The company had zero downtime in 2008; quite a few other brokers hit bumps in the road during heavy trading days as the market plummeted. "Even with the market down 50%, our customer assets are at an all-time high," claims thinkorswim's president, Tom Sosnoff.

Thinkorswim's trading platform, which is easily customized, allows you to trade everything from stocks to complex options to futures to foreign exchange, all on the same screen. (The firm takes top honors for options and frequent traders, too.)

The platform is clean and easy to navigate, in spite of its complexity. Orders are filled very quickly, and customer support is staffed around the clock.

Thinkorswim also won the categories Best for Frequent Traders and Best for Options Traders. However, Barron’s also noted the dark side of the company’s buyout by TD Ameritrade (AMTD):

There is a cloud in the sky, however, which is the recent acquisition of thinkorswim by TD Ameritrade, with its very different look and feel as well as pricing structure.

One big worry of mine is that the platform will change now that TD Ameritrade (AMTD) has its hands on it. But according to my chats with thinkorswim’s ace customer service team, that isn’t going to happen.

Given the accolades bestowed upon thinkorswim by Barron’s, it looks like TD Ameritrade’s timing in this deal couldn’t possibly be better –they just received the best possible no-cost marketing for an online broker.

I was happy to see that optionsXpress (OXPS), had a solid showing, finishing second in “Best for Long-Term Investing” and fourth in “Best for Options Traders.” I have a small position in optionsXpress and am considering buying more.

Financial stocks have had a huge rally, up 47% off their March 6th low, as measured by the Financial Select Sector SPDR (XLF). But the high-quality survivors like Raymond James (RJF), Schwab (SCHW) and Goldman Sachs (GS) have enormous potential to continue their rallies, and that’s where I’m focusing my attention.