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||Cheapest Stock Trades||Click Here|
|OptionsHouse||$2.95||Ultra Low Cost||Click Here|
|OptionsXpress||$9.95||Wonderful Options Education||Click Here|
|Etrade Financial||$9.99||Best Overall Interface||Click Here|
|Scottrade||$7||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.
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.
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.
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.
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.
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.