Best Brokers For Day Traders
A lot is needed to make a living out of day trading: knowledge, experience, and right trading tools. It is also imperative to minimize the cost
of trading as it might eat out all potential profits.
We believe that a successful day trader needs three brokerage accounts.
First account should be with company offering very low per-share pricing plan to make small size
trades of up to 1,000 shares. Second account should be with firm that provides low flat-rate pricing plan for making larger trades (1,000 shares or more) that will be too
expensive with the per-share plan.
The third account will provide access to the best trading, research and charting tools which are usually found in more expensive brokerage houses.
Below we list our picks for 2014 best brokerages for day-trading:
- TradeStation for low per-share pricing: first 500 shares $0.01 per share, $0.006 per share thereafter, $1 minimum per trade;
- Optionshouse for cheap flat-rate trades: $4.95 per trade;
- TD Ameritrade for fantastic set of trading and research tools:
TD Ameritrade TOS review.
It takes 10-15 minutes to open day-trading account at OptionsHouse ($1,000 minimum opening deposit) or TD Ameritrade
($0 minimum opening deposit), and a couple of days at TradeStation ($5,000 minimum opening deposit). If you want to daytrade,
all firms require at least $25,000 account balance.
|Stocks and ETFs|| $4.95|
|Stocks and ETFs broker assisted|| $4.95|
|Options||$4.95 + $0.50 per contract|
|Mutual funds|| $9.95|
|U.S. Treasury bonds and listed corporate bonds||Orders are accepted by phone|
With only $4.95 flat-rate stock commission and $4.95 plus $0.50 per contract in options commission,
OptionsHouse is one of the best brokers for day traders and active investors looking for flat rate commission account to make larger
trades that will be too expensive with per-share plan (see below).
Optionshouse offers lots of trading tools: Risk Viewer, Stock Screener, The Trade Generator, streaming charts and news, volatility charts,
Spread Investigators and much more. All of them are customizable, fast and easy to use.
Volatility Charts - track changes in both implied and historic volatility to help you analyze volatility trends. This is huge for options traders
as these charts help tell you if the option has a high or low premium attached to it. We love using this tool to find good options candidates to sell
naked puts and calls on and keep the cash. The current, 52 week high and 52 week low of each volatility measurement is also given which is really helpful data to have.
The Probability Calculator - enables you to enter price targets for a given symbol and find the probability of an underlying symbol reaching these targets on a
future date. One of the most important things in options trading is to make sure you’re right 70-80% of the time. This tool really takes
the guess work out of it.
Risk Viewer - using proprietary algorithms, the Risk Viewer can help you better understand and estimate the potential risk in your portfolio.
Trade Generator - the proprietary technology in the Trade Generator scours the market for options trades and finds new trade ideas that match up with your inputs
and sentiment. This is like having a personal assistant that hands you trade ideas that fit your strategy, only it’s free.
The firm's iPhone, iPad, Android and Kindle Fire Apps allow customers to access and manage their account in real time, regardless of where they are.
The company revamped its browser-based platform, which now provides almost as much versatility and customization as a
stand-alone application. Additionally, OptionsHouse offers virtual accounts in which people can trade and practice strategies before they use their real money.
Trade free for 90 days when you open and fund a new OptionsHouse account
|Stocks and ETFs flat-rate plan|| 1 to 9 trades/month - $9.99/trade; 10 to 29 - $7.99/trade; 30 - 99 - $6.99/trade; 100 - 199 - $5.99/trade; 200 or more - $4.99/trade|
|Stocks and ETFs per-share plan|| first 500 shares $0.01 per share, $0.006 per share thereafter, $1 minimum per trade|
|Options|| $1 per contract with no ticket charge, or $4.99 per trade + $0.20 per contract|
|Futures|| 25¢ - $1.20 per side, per contract + exchange, regulatory & overnight fees|
|Mutual funds|| $14.95|
|Bonds|| $14.95 + $5 per bond|
|Forex||commission-free with tight spreads and fractional pips|
|OTCBB|| $9.99 (100,000 share position maximum)|
|Pink Sheet Stocks|| $9.99 (100,000 share position maximum)|
|Investments|| stocks, options, mutual funds, bonds, futures, T-Bills, OTCBB, Pink Sheet Stocks, Forex, ETFs|
|Tradestation minimum deposit to open account|| $5,000 for non-daytraders, futures and forex accounts, $5,500 for futures and forex IRA accounts, and $30,000 for daytraders|
TradeStation offers one of the lowest commissions among discount online brokers: it charges just $0.01 per share for the first 500 shares,
$0.006 per share thereafter, with $1 minimum per trade. With that rate all stock trades of up to 100 shares will cost you
Unfortunately, there is a serious disadvantage with this broker: $99.95 fee will be charged to use their trading platform if customer did not trade at least 5,000
shares in previous month. With this fee it does not make sense to open account at the firm unless you can meet this requirement.
In 2014 TradeStation was rated Best for Frequent Traders and Best for International Traders by Barron's magazine. We rated the firm Best for Futures Traders in 2014.
No account service fee or RadarScreen® fee for the first 90 days.
|Stocks and ETFs|| $9.99|
|Stocks and ETFs broker assisted|| $49.99|
|Stocks and ETFs interactive voice response (IVR) telephone system|| $34.99|
|Options|| $9.99 + $0.75 per contract|
|No-load mutual funds|| $49.99|
|Treasuries at auction|| $25|
|All other bonds and CMOs, CDs|| on a net yield basis|
|Futures|| $2.25 per contract (plus exchange & regulatory fees)|
|Forex|| Non-commission currency pairs trade in increments of 10,000 units (and do not contain a "#" symbol suffix). There are no additional fees or charges.|
|Investments|| stocks, mutual funds, options, ETFs, bonds, CDs, UITs, futures, and forex|
|TD Ameritrade\TDA minimum deposit to open account|| $0 for cash account, $2,000 for margin account|
|Fees||TD Ameritrade fees|
|TD Ameritrade login, TD Ameritrade promotions
and TD Ameritrade referral
TD Ameritrade commissions are high - $9.99 per trade. But they are negotiable for active traders. What we really like is
Thinkorswim trading software, that allows trading stocks, options, forex and futures from the same platform. This software is
the best in the industry and a must-try for any day-trader. Read Thinkorswim review.
TD Ameritrade is rated one of the top brokers for active traders by major investment magazines for the last few years.
TD Ameritrade Review
Trade free for 60 days + get up to $600.
This article was updated on 10/28/2014.