When choosing the best online stock broker for you, you want to find one that offers the features and options that match your trading strategy. Some of those considerations are the pricing and fees, the way the platform works with your strategy, and the education offered.
If you are new to trading online and do not plan on trading often or in large volumes, the cost per trade may not be much of factor when choosing a service. However, if you plan to order a large number of trades, those individual fees will add up, and the difference between a couple of dollars per trade may equal out to hundreds of dollars over time. OptionsHouse and TradeKing offers some of the best trade fees, with each online stock trading costing $4.95, which is a couple dollars less per trade than the average of online trading companies we reviewed.
If you are interested in trading options, you have two prices two take into account: the base rate and the per-contract fee. The base rate may be higher with some services while the per-contract fee is lower. If you plan to trade a large number of contracts, this model would benefit you more than looking for a service with a lower base rate. As mentioned above, the cost to exercise or assign an option contract will also add. OptionsHouse has the lowest fees for these two processes at $4.95 each.
If you plan to trade on the margin, you want to check out not only margin rates but also the tiers for the rates. Some services have lower rates at first glance, but those rates do not drop until your borrowing balance is well over $1 million. Once again, OptionsHouse has the best interest rates, starting at 6.5% for balances up to $25,000 and dropping to 2% when you balance breaks the $1 million mark.
Each individual service typically has its own margin account requirements, including minimum balances and minimum trading requirements to maintain an active and open account. Regulations enforced by the Financial Industry Regulatory Authority require that pattern day traders – those who buy and sell the same security four or more times in a five-day period – maintain at least $25,000 in their margin accounts.
When choosing your platform, as discussed above, you have the choice of desktop or online. Services such as Fidelity and Scottrade offer standard online platforms, which are easy to navigate and intuitive to complete tasks. Scottrade’s online platform is customizable, which you do not get in every online platform. Online services like TradeKing allow you to adjust the position of some of the windows, but it is not truly customizable like Scottrade or even OptionsHouse and optionsXpress.
If total customization is something you’re looking for, TD Ameritrade’s thinkorswim platform is a solid choice. You can add, resize, minimize and maximize all the windows and choose which choices you are viewing. TradeStation is also a great choice in platforms for customization with its widgets and gadgets, including screeners, scanners and streaming news.
Mobile platforms across the board allow you to research and trade stocks, but some services offer additional features. Mobile apps from Fidelity and Merrill Lynch, for instance, offers check depositing, where you can snap a picture of a check, deposit the funds and immediately begin trading with those funds. E-Trade’s mobile app offers check depositing as well as barcode scanning. This feature, which no other app on our lineup offers, allows you to scan a barcode and receive publically traded information concerning the related stock.
Investment Vehicles
When deciding on a stock trading service, the investments in which you are intersected in trading may be a deciding factor for you. Without question, every service should offer stock and option trading. All of the services we reviewed also offer IRA investments. With the exception of SpeedTrader, you can trade ETFs with the services on our lineup, and you can trade mutual funds with all services we reviewed except SogoTrade. This just means that if you want certain investment vehicles, you’ll want to ensure that the service offers the particular ones you want.
Fewer services offer riskier trading of futures and Forex. Futures differ from options in that the owner of the future has the obligation to buy or sell, while with options the owner has the right to buy or sell. This makes speculating on the subsequent performance riskier than with options trading. Forex trading, the trading of foreign currencies, can be extremely risky because of the liquid nature of the market, making for potentially devastating losses. Many find the potential for profit outweighs the risk of loss.

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