sharebuilder review
While Sharebuilder has offered online trading for some time, they have only recently begun allowing customers to trade options. As of this writing, level two options trading is the highest level available.
As options trading is relatively new on Sharebuilder, the platform leaves plenty to be desired. Sharebuilder is not recommended as an options trading platform. However, for long term investors, the ability to hedge using options or leverage existing positions through covered calls is both welcome and useful.
experience with the platform
I have used Sharebuilder since 2000 and made less than 200 trades.
the good
Sharebuilder’s core business is providing low cost trades that allow investors to incrementally build positions over time. Essentially, Sharebuilder extends the concept of a dividend reinvestment plan (DRIP) to all stocks. A strength of the platform is the convenience over traditional DRIPs - one account can be used to build positions in many stocks and real time trades can be used to close positions. The platform is very good for investors just starting out with limited capital, but a steady income and plenty of time.
the ugly
Because of Sharebuilder’s roots as a DRIP on steroids, its features are not focused on short term trading. Options are inherently short term trades, as they expire in six months or less. The following shortcomings make Sharebuilder unacceptable for trading options:
- No charting tools whatsoever, these are needed for technical analysis;
- Greeks are unavailable and neither is a pricing model; and
- No real time quotes.
shots at redemption
While writing this review, I received an email stating real time quotes will be available beginning in mid November. This will make the platform significantly better for options trading, but still does not address the lack of charting tools and a pricing model. This review will be updated as Sharebuilder adds features in the future.