[Notice: Please be advised that there are some US brokers who offer zero-commission trading now.]
(Updated: 4 September 2019)
I have received an email from this platform which has clarified some points in this article. Thus, I am going to share the information with this update.
ToledoTrade (Link) is an online broker that I came across when I was looking for a platform to invest in foreign stocks, mainly in the US market. The products that I am really interested in are the exchange traded funds (ETFs). This relatively new online broker (just launched in 2019) is a division of Gar Wood Securities, LLC in Ohio Illinois, US.
Remarks: The company is actually located in Illinois, instead of Ohio.
Benefit of ToledoTrade
The main advantage of ToledoTrade is its low trading commission. Its commission is $1.95 minimum per trade, which I believe is the lowest that I have seen (excluding those platforms that do not charge commission but have a withdrawal fee). Nonetheless, there are certain terms and conditions for this low commission rate stated on its website ($2500 account minimum). These terms were not displayed during the application process.
I have completed a trade and the commission is really $1.95, regardless of account balance.
Remarks: There is no account minimum for the $1.95 commission rate. ToledoTrade has updated its homepage with the correct information.
Types of commission plan
ToledoTrade offers two commission plans: Standard or Trade at Cost. The Trade at Cost plan has an even lower commission rate ($0.35 minimum per trade) and more benefits but it requires a minimum of $30,000 for margin account or $50,000 for cash account.
Registration
The registration process is easy. You will have to validate your email address before you can proceed with the application. After that, just fill in the required details. Mobile phone number is required for the application. Registration finishes with fund transfer. Four days after I signed up, I received an email asking for proof of identity and address. This came after I initiated my fund transfer. I am not sure whether the fund transfer triggered this or it will come after four days no matter what.
Fund transfer
There are a few ways for fund transfer but I think the easiest way for Malaysians is wire transfer. When we choose wire transfer, the platform will give us the information to initiate the transfer. We have the options of a few currencies but I would suggest USD. Do note that there are bank charges and transaction fee. The fund is transferred to Interactive Brokers account, so I guess ToledoTrade is collaborating with Interactive Brokers.
Remarks: Interactive Brokers (IB) is its clearing firm and all client accounts are serviced by ToledoTrade. Unlike IB, there is no $10 monthly inactivity fees.
Conclusion
Is this platform safe? I am not too sure. The whole registration process took about two weeks for me. I will update again once I have more firsthand experience of this platform.
Remarks: As for the safety issue, ToledoTrade uses 256 bit encryption. ToledoTrade and Gar Wood Securities LLC are registered as US Broker dealers with FINRA. Furthermore, they offer SIPC insurance (Link) which protects against loss of cash and securities of up to $500,000 (up to $250,000 limit for cash). Thus, I suppose that ToledoTrade can be considered as safe.
Referral link
Below is my referral link for ToledoTrade. If you open an account through this link, I might get $50 if you fund your account with at least $10,000. Otherwise, you can always search for ToledoTrade with Google and register yourself.
ToledoTrade : Link here
[Notice: Please be advised that there are some US brokers who offer zero-commission trading now.]