Finding the best online stock broker is becoming more and more difficult everyday. Its seems like a new online broker is launched every month and cheap stock trading has become the way of the stock trading world. But with all of the new players in the game, it’s the oldest and most respected online stock brokers that continue to offer the best deal.
Just 10 years ago, trading online was nearly impossible. With a few start-ups in the works, E*Trade and Firstrade offered a raw and expensive way to avoid calling your local broker and making trades on your own. As the years have progressed, trading stocks online has become easier for the consumer AND less expensive, which is a rare combination in business.
Now a days, you can find dozens of online stock brokers, each claiming to be the best at what they do. But just how many of them can offer cheap trading, expert customer service, lightning fast execution and cutting edge technology? Let’s take a look.
OptionsHouse is a relatively new broker in the online space and offering trades for $3.95 qualifies them as one of the best. If you find yourself needing broker assistance on making a trade the same $3.95 trade fee applies, making OptionsHouse the cheapest place to make an online stock trade today. You might be thinking that OptionsHouse specializes only in options and contracts and that’s simply not true. In order to prove it, OptionsHouse is offering 100 free trades for new customers if you fund your account with at least $3,000 (Offer expires June 30th 2010). In terms of customer service, OptionsHouse has live chat which includes 24-hour, seven days a week support and OptionsHouse was recently voted best broker for options trades by Barron’s (In both 2009 and 2010)
To open up an OptionsHouse account, visit their official website at www.OptionsHouse.com
E*Trade is the only online stock broker I can think of that advertises on television, making them the most well known of this list. E*Trade is also one of the most expensive, as they charge $7.99 – $9.99 per trade and an additional $25 if you use a broker to execute the trade. To ease the cost of trading, E*Trade is offering free trades for the first 60 days of opening your account (restrictions apply of course). You must have a minimum balance of $1,000 to open an E*Trade account and you will be charged account maintenance fees and inactivity fees so make sure you keep your account active. In fairness to E*Trade, their technology and platform are like no other and for experienced investors, E*Trade by far is your best option. However, for the casual investor, there is just too many fees and too high a cost per trade to take advantage.
To open up an E*Trade account, visit their official website at www.ETrade.com
TradeKing fits right in the middle of our list as it seems to do everything very well. TradeKing has a low per trade commission of $4.95, which does not change if you utilize a broker over the phone and options trading has the same $4.95 cost, plus a $0.65 fee per contract. If you follow SmartMoney, Barron’s and other graders of online stock brokers, you’ll find TradeKing winning awards almost every time they are handed out. TradeKing offers extended hours customer support (Not 24/7 like a few others) and if you’re considering transferring your current trading account to TradeKing, they will reimburse your transfer fees up to $150. Finally, TradeKing is a leader in educating customers and you’ll find hundreds of resources to help both amateur and professional investors.
To open up a TradeKing account, visit their official website at www.TradeKing.com
ShareBuilder once had an elite trading platform that allowed for users to make trades online at a great, cheap price of $6.95. While users can still take advantage of this opportunity, the rest of the world seems to have passed ShareBuilder by. One of the premier benefits of having an account with ShareBuilder and Capital One is that ShareBuilder can be connected with your Capital One 360 account, making transactions to and from the bank a snap. Express funding is available (unlike with most brokers on this list), which allows quick decisions if needed. The low margin rate of 7.25% is the best you’ll find among discount broker competitors.
To open up a ShareBuilder account, visit their official website at www.ShareBuilder.com
ChoiceTrade isn’t your everyday online stock broker and if you visit their website, you’ll know that right away. Rated four-star broker by Barron’s for the last five years, ChoiceTrade offers $5 online trades with NO penny stock surcharge (very hard to find). However, the immediate drawback to using ChoiceTrade is their platform as if you’re looking for technology, you have to pay for it. Their basic streaming platform can be utilized for four months, free of charge but after that the cheapest plan available is $14.95 a month. Like Zecco, ChoiceTrade has an in-depth investor community where you can ask thousands of fellow users your questions.
To open up a ChoiceTrade account, visit their official website at www.ChoiceTrade.com
Scottrade currently offers fee free IRA accounts, has fantastic customer service and in 5 years of trading with Scottrade, I have never encounter a single delay, problem or inconvenience. Sure $7 per trade ($27 for broker assisted trades) is more expensive than the $4.95 or even $2.95 that other online stock brokers charge but when so many other brokers offer similar services for cheap stock trading and I’ve found one that has been nothing short of fantastic, I’m not about to risk having problems for a dollar here or dollar there. In order to trade with Scottrade, you’ll need a minimum balance of $500 and all mobile tools (Blackberry, iPhone, Palm, etc) can be used to access your account and make trades.
To open up a Scottrade account, visit their official website at www.Scottrade.com
Fidelity isn’t your normal online stock broker and with a very powerful brand behind them, they are slowly gaining traction as a “discount broker”. Currently Fidelity offers trades for an $8.00 commission and if you’re not careful, you will be charged account maintenance fees. Broker assisted, market and options trades are still the flat rate of $8 so if you need help executing an order, there’s no extra charge. Fidelity does offer live chat, however it’s not 24/7 like a few other brokers but free telephone support is very fast and simple to use (Tried it myself). Most mobile devices are compatible with Fidelity and with hundreds of webinars to educate investors, Fidelity is a great place to begin your investing career.
To open up a Fidelity account, visit their official website at www.Fidelity.com
tradeMONSTER is the broker arm of the very successful optionMONSTER, a news and education site for options traders. tradeMONSTER takes advantage of all that knowledge and provides a very disciplined approach to active trading, both in options and stocks. They have been awarded 4 and a half stars by Barron’s under the “best for options trading” category. But they also allow for cheap stock trading as well, with stock trades costing $7.50 a trade. They have a plethora of free online trading articles, webinars, and a blog with loads of free information on how to use their different strategies. For the options trader who also wants to trade stocks periodically, this looks like a monster of a deal. Transfer your account to tradeMONSTER and they will reimburse your account transfer fees up to $250* when you switch.
To open up a tradeMONSTER account, visit their official website at www.tradeMONSTER.com
thinkorswim has been around since 1999, and is now owned by TD Ameritrade. thinkorswim is known as one of the best places to trade options (superior technology), as well as a hub for options educational information. They were ranked #1 by Barron’s with 4 and a half stars in their 2010 ranking of the best online brokers. You can trade stocks there at their flat fee rate for $9.95. There are several different pricing models for options trading there. I suggest you review them on their website. They will reimburse your account transfer fees of up to $100 if you are a new member. And you have 30 days to check them out without consequence. They will reimburse you for your high-speed internet service when you make 40 or more trades. You get 3 complimentary mutual fund trades per month. And there are no fees associated with their IRAs. On top of all that, you get a free thinkorswim Monkey plush toy. How cute.
To open up a thinkorswim account, visit their official website at www.thinkorswim.com
SogoTrade is one of the quieter online stock brokers and unless you’ve already signed up an account with them, this may be the first time you’ve heard of them. At $3 per trade, SogoTrade is one of the leaders in cheap stock trading and with three unique trading platforms, SogoTrade continues to implement game-changing technology. SogoTrade, SogoElite and soon to be launched Laser all provide customers up to the second data to help them make the best trade possible. There are no account maintenance fees or inactivity fees of any kind and SogoTrade protects customer account funds up to $500,000.
To open up a SogoTrade account, visit their official website at www.SogoTrade.com