As a follow up to my post on July 17th where I profiled SmartStops and the firm’s innovative way of handling trading exit strategies, it appears as if the firm landed a whopper of a partnership with the largest online broker, TD Ameritrade. The agreement brings SmartStops’ BrokerLink, the “ability to have trades automatically executed when at-risk stock and ETF prices fall enough to trigger their daily SmartStops” to TD Ameritrade’s almost 7 million account holders.
For buy and holders who have seen their portfolio’s go nowhere over the past few years, SmartStops claims that its system beats traditional buy and hold strategies. It’s interesting that Ameritrade launched this program. As basic online brokerage services have become commoditized, any research or trading strategy that can be integrated into a broker’s platform and increase trading volume is a boon to the broker. I’d love to see some preliminary data coming out of the partnership about trading volume and performance.
I think this bodes well for both Ameritrade and SmartStops. It immediately gives SmartStops the credibility of a deal with a Tier 1 player and for Ameritrade, it’s great to see them expand out their research/trading platform to incorporate this type of system. SmartStops doesn’t claim to tell you which stocks to pick — rather, once you’ve made that decision, SmartStops wants to give you an exit strategy that according to the firm, widens when market volatility goes down and tightens when it increases. I look to both firms to sign more of these types of deals (especially seeing that the online brokers typically sign business development deals in tandem). Sometimes this is just lazy deal making and other times, brokers and their customers don’t actually know what they want until they see it.
