Compare Online Brokers

Compare online brokers, or namely, stock brokers is sometimes a very difficult task due to the wealth of information online today. This post attempts to help you sort out all the noise in order to find and compare the best online stock brokers in the crowded industry.

What I usually look for in online brokers are commission rates, reputation, web interface and other possible benefits (the intangibles). There are tons of other differences but most of the other things (like those one time fees that I almost never use), I feel they are negligible.

As you can see, once you cut out all the marketing fluff, there actually isn’t that much to report on. Almost all stock brokers are great, they all make trades when you want and at the prices you want, so you couldn’t go wrong (on a users perspective) on any of them. Some, like Etrade Financial offer an online bank and an awesome interface, while others like Zecco offer 10 free trades (after which it’s $4.50).

Another way you can try is to actually test them all out. Deploy a bit of capital and start making trades, because sometimes you just don’t know until you’ve tried them all. If you aren’t the trial and error types though, below are some of the better stock brokers out there.

Comparing Online Brokers at a Glance

Broker Stock Trade Rating Why This One? Sign Up
Zecco $0 5-star rating Cheapest Stock Trades Click Here
OptionsHouse $2.95 4 stars Ultra Low Cost Click Here
OptionsXpress $9.95 4 stars Wonderful Options Education Click Here
Etrade Financial $9.99 5-star rating Best Overall Interface Click Here
Scottrade $7 4 stars Free Trader Platform That Make Sense, and Have the Most Physical Branches Nationwide You Can Visit In Person Click Here

Compare Online Brokers in More Detail

I realize that many stock brokers look and will seem similar without extensive testing. Actually, much of it boils down to personal preference, so which online broker is really the best? Here are a few reasons why you would want to go with each brokerage firm.

Why Zecco?

The draw of Zecco is the free trades. For most people who actually have $25,000 lying around, free trades is a good place to start. Sure, you only get 10 free stock trades a month but that’s enough for most people.

Zecco also offers 10 free stock trades for those that trade 25 times or more a month, but at that frequency, traders may want to look at cheaper alternatives.

Click Here to Sign Up for Zecco Account

Why OptionsHouse?

PEAK6 stormed onto the industry and now offer $2.95 per stock trade. I was surprised to see this when I started to compare online brokers but the price is not a typo. For traders who trade frequently, this adds up to HUGE savings.

Click Here to Sign Up for OptionsHouse Account

Why OptionsXpress?

At first, I didn’t know why I would pick OptionsXpress but after talking to many professional traders, there seems to be a loyal following with this stock broker. Tools seems to make sense, the fill rate is extremely efficient (both in price and speed), and the price isn’t outrages either. They also don’t nickel and dime you when hidden fees like some other brokers. Even if they weren’t on your list, I recommend you to sign up an account and check them out.

Click Here to Sign Up for an OptionsXpress Account

Why Etrade Financial?

Etrade is one of the original online discount brokers who took a sizable market share away from full service brokers. With a banking division, Etrade is also able to bundle a savings account alongside your brokerage account so you can transfer funds easily between the two. The overall interface of this broker is also one of the best in the industry. Overall, this is a great option.

Click Here to Sign Up for an Etrade Account

Why Scottrade?

Scottrade’s strength lies in its focus on customer service. It’s hard to describe the difference but once you interact with any of its employees and customer service reps, you will immediately feel how great their support is. Apart from having the most physical branches where you can just walk in and ask any questions or even get them to make a trade for you, their trading fees are also very reasonable. Overall, this is a solid option.

Click Here to Sign Up for a Scottrade Account

{ 13 comments… read them below or add one }

jason July 20, 2009 at 5:04 pm

No Scottrade? They have $7 trades and the interface is pretty good, I personally think that Scottrade has better interface than Etrade.

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Investing School July 29, 2009 at 5:55 pm

You’re right. Scottrade is a pretty good alternative and it’s just been added.

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David July 27, 2009 at 5:47 pm

Does anyone have any Zecco promotion code? I saw some awhile ago but didn’t take advantage and now I can’t find any new ones. Any help would be appreciated. Thanks.

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David July 29, 2009 at 12:43 pm

I guess no one does. Let me know if it ever comes up guys. I appreciate it.

Oh and let me add my 2 cents on the stock brokers. When I do a comparison, I only really care about price because everything else (reputation, customer service etc) change too often. To that end, I like Zecco for obvious reasons but at $2.95, optionshouse is really tempting too.

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Investing School July 29, 2009 at 5:56 pm

I talked to the Zecco team and there’s no promotion code available anywhere right now that’s publicly available. Their offer is 10 free trades if you trade 25 times a month or if you have $25k in assets.

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Paul August 22, 2009 at 8:03 am

Why not include Schwab in the listing? Because they’re not just online? Are there other discount brokers with Schwab’s model of online plus physical customer service centers that charge relatively low commissions?

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Investing School August 22, 2009 at 9:50 am

Scottrade and Etrade both have physical locations. In fact, Scottrade has more branches than Charles Schwab. I haven’t used Schwab because they have higher trading fees so I can’t comment on whether they are good or not (although I suspect they are).

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Jamie September 19, 2009 at 11:09 am

I love Scottrade myself. There’s something to be said when every experience you have with the broker is a good one and whenever you have questions, it’s answered promptly and thoroughly. While it’s not the cheapest trade, it’s close enough for me to pick the better trading experience.

Who wants a free trading broker who can’t sustain itself in the long run anyway?

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Jessica October 3, 2009 at 4:08 pm

Not many people know about OptionsHouse yet but they are doing a great job taking market share with just $2.95 per stock trade. They are owned by PEAK6 and is much smaller than the big players like Etrade but they offer a solid alternative. They don’t have the bells and whistles like an integrated bank or an ATM card but for trading purposes, the most important factor I care about is the commissions.

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Lance October 5, 2009 at 5:02 pm

Can you compare online brokers that provide free trades? I know Zecco does but aren’t there others? What about Wells Fargo or some other brokers that give people free trades? Who do you like amongst those?

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Investing School October 6, 2009 at 2:54 pm

I stuck with some of the better ones in this comparison. When I compare online brokers, I don’t just look at price and I suggest that you do the same. Wells Fargo’s prices are great but the interface isn’t so awesome. If you want something vanilla, then it works fine but anything more sophisticated and you are out of luck.

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john August 19, 2010 at 6:58 pm

Hey: what about Td Ameritrade?

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Sharon March 27, 2011 at 1:15 pm

What about Sharebuilders, plus the ING Electric Orange Checking or Savings?
Anybody have good or bad comments on either one.

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