Is Thinkorswim by TD Ameritrade Regulated? Is it safe? - TU Expert review
License is the most important document you have to consider when choosing a broker. Many traders, who would like to start working with Thinkorswim by TD Ameritrade try to check whether it is regulated. Traders Union experts have already done that. In this article, you will learn whether Thinkorswim by TD Ameritrade is regulated, what regulatory authorities supervise the broker and whether it is safe to work with the company in general.
Short summary about the broker Thinkorswim by TD Ameritrade
TD Ameritrade’s Thinkorswim broker is a result of the unification of Thinkorswim and TD Ameritrade, the developers of the best platform for stock trading in the US. Its main focus is trading securities, the OTC securities market, spot instruments, and retail foreign exchange trading in the US. The company was nominated for: "Best Platforms and Tools", "Best Application for Traders", for being among the Top 5 in the ratings, "Best Innovative Developments", and "Best Broker for Options Trading". Since 2009, the company’s reliability has been confirmed by the licenses from two of the most stringent regulators in the world, FINRA (CRD#: 7870/SEC#: 801-60469,8-23395), and SIPC.
| 💰 Account currency: | USD |
|---|---|
| 🚀 Minimum deposit: | From $0 (from $2,000 to activate margin trading opportunities) |
| ⚖️ Leverage: | Floating |
| 💱 Spread: | from 0.00 points |
| 🔧 Instruments: | Over 70 currency pairs |
| 💹 Margin Call / Stop Out: | Stop out - 25% |
Pros and cons of Thinkorswim by TD Ameritrade
👍 Advantages of trading with Thinkorswim by TD Ameritrade:
•Access to stock exchange markets with hundreds of instruments, including indices. Derivatives trading, entry into the OTC market, legal services of currency trading in Forex.
•One of the most functional platforms in the world for trading securities with multi-level complex chart analyses.
•Two of the world's best regulators license it.
•Optimal trading conditions for individual assets.
•Segregated accounts.
👎 Disadvantages of Thinkorswim by TD Ameritrade:
•The broker works only with traders from the USA.
•The platform is difficult for novice traders.
•There is no membership in the FDIC (Federal Deposit Insurance Corporation, which would ensure traders' money up to $250 thousand).
•A limited number of deposit/withdrawal options.
•High entry threshold.
Why is it important to work with a regulated broker?
License is a document that certifies that a broker operates legally and guarantees fulfillment of its obligations to the traders. A financial license is issued by a financial regulatory authority of a country (the National Bank) or a specialized authority (for example, Securities Commission, Futures Trading Commission, etc.). It is important to choose licensed brokers for the following reasons:
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A license guarantees that the broker operates in compliance with the rules of the financial regulator that issued the document.
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In order to obtain the license, a broker must comply with certain requirements, for example, the size of the authorized capital or personnel qualification. It is simply not lucrative for scammers to comply with such requirements.
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A broker’s license provides access to real markets, and you can be sure that the quotes are real and up-to-date.
The best option is to work with a broker that holds the license of the jurisdiction, where the trader resides. You can also choose a company with a financial license of another reliable jurisdiction, for example, the U.S. or the European Union.
Is Thinkorswim by TD Ameritrade Regulated? Broker’s license
Security (Protection for Investors)
Information
TD Ameritrade’s Thinkorswim is licensed by multiple regulators to operate in the exchange and over-the-counter stock markets. Among them are FINRA and SIPC.
👍 Advantages
- Segregated accounts with major US banks
- Reliability. The broker is under constant control of regulators.
- Offers transparency
👎 Disadvantages
- It will be difficult for a trader who is not a US resident to achieve a result.
- The broker is not a member of the FDIC, which ensures money for traders in case of force majeure
Brokerage fees
Broker’s regulation is the most important choice criterion. However, before you start working with the broker, it is also important to analyze its commissions and fees. TU analysts have studied the commissions and fees charged by Thinkorswim by TD Ameritrade, which you can see below.
Trader’s Union experts examined Thinkorswim’s platform and conditions looking for hidden fees on Forex market assets (pricing for stock instruments was not considered). The Union found that its billing is transparent and there are no hidden fees. The type of order processing complies with the ECN standard, but there is no commission for each lot held on the account which is a significant competitive advantage.
| Account type | Spread (minimum value) | Withdrawal commission |
| Standard (Forex) | 1.2$ | No |
Brokers that are similar to Thinkorswim by TD Ameritrade
Many brokers operate legally, obtaining relevant licenses and permissions. However, when choosing a broker, it is important to compare their trading conditions. TU experts have prepared a comparative analysis of Thinkorswim by TD Ameritrade conditions with its closest competitors.
Comparison of Thinkorswim by TD Ameritrade with other Brokers
| Thinkorswim by TD Ameritrade | RoboForex | Pocket Option | Exness | FreshForex | XM Group | |
|---|---|---|---|---|---|---|
Trading platform |
Thinkorswim |
MT4, MT5, R MobileTrader, R StocksTrader, R WebTrader |
Pocket Option, MT5, MT4 |
Exness Trade App (mobile), Exness Terminal (web), MetaTrader5, MetaTrader4 |
MT4, MobileTrading |
MT4, MT5, MobileTrading, XM App |
Min deposit |
$2000 |
$10 |
$5 |
$10 |
No |
$5 |
Leverage |
1:1 |
From 1:1 |
From 1:1 |
From 1:1 |
From 1:1 |
From 1:1 |
Trust management |
No |
No |
No |
No |
No |
No |
Accrual of % on the balance |
No |
No |
No |
No |
No |
No |
Spread |
From 0 points |
From 0 points |
From 1.2 point |
From 1 point |
From 0 points |
From 0.6 points |
Level of margin call / stop out |
No |
No |
No |
No |
No |
No |
Execution of orders |
Instant Execution, Market Execution |
Market Execution, Instant Execution |
Market Execution |
Market Execution, Instant Execution |
Market Execution, Instant Execution |
Market Execution |
No deposit bonus |
No |
No |
No |
No |
$30 |
No |
Cent accounts |
No |
Yes |
No |
No |
Yes |
Yes |
Thinkorswim by TD Ameritrade is a professional stock market broker for US residents. Only traders with a capital of $10 thousand dollars will be interested.
The minimum deposit in RoboForex is $10. Leverage up to 1:2000. Traders choose RoboForex for reliability, favorable trading conditions, minimum spreads, and commission fees. The company is recommended for beginner traders and experienced investors.
Pocket Option offers a wide range of trading instruments and copy trading services. It constantly improves its service quality and expands the list of assets and trading platforms. The broker is suitable even for novice traders without significant capital due to the low initial deposit. Experienced traders who work with CFDs and binary options can also use Pocket Option’s services.
Exness broker is a trusted broker partner that is compliant with all relevant terms. Exness complies with all payment obligations and pays money earned.
FreshForex is a reliable Forex broker providing a standard set of trading tools. The company is a good option for traders of all levels, from beginner to professional traders. It is mid-range in terms of size and number of registered traders and they are reliable based on our research and analysis.
XM Broker is a broker for professional trading. Trading conditions correspond to the average market; there are technical advantages that distinguish XM Broker from its competitors.
Conclusions
Thinkorswim by TD Ameritrade is a quite reliable broker for trading. Thinkorswim by TD Ameritrade operates on the license of a reliable jurisdiction and its operation is regularly monitored. However, the company does not offer the best trading conditions compared to competitors. You can choose this broker and not worry about the safety of your funds, but there are better options in terms of trading conditions.
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FAQ
How difficult is it to obtain a brokerage license?
The procedure for obtaining a license differs depending on the jurisdiction, but it is very difficult and expensive to get the document in a reliable jurisdiction. This is why only reliable brokers obtain licenses.
Why is it not recommended to work with offshore brokers?
Offshore brokers have to meet minimum requirements for obtaining a license and reporting, which is why often scammers get such licenses.
Can an offshore broker be reliable?
Yes, although there are not many of such brokers. There are brokers with a good reputation, but with an offshore license. You still need to be very cautious when working with such companies.
How do I check a broker’s reputation?
In order to check a broker’s reputation, you need to read user reviews. However, it is recommended to only use independent websites for that.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.