Best Deep Discount Brokerage Firms
Best Deep Discount Brokers
Many regular individual investors and even some active traders are still unaware that there are highly rated deep discount brokers that charge $5 per trade
to buy or sell stocks or ETFs in a flat rate pricing plan, and as low as $1 per trade in a pay-per-share pricing plan. Stock trading commissions came down a
lot since the time Charles Schwab introduced discount stock trading at $30 per trade. Competition among brokerage houses is now stronger than ever,
with new companies constantly pressuring established players with aggressive pricing. There is a clear long-term trend of lower trading commissions and fees that
continues in 2017.
The online trading and investing industry is so large and popular now that there are different niches created within it that companies start to fill. One of these
niches is deep discount trading. It's created by the need of very active traders to have the lowest possible commissions for online trading. Some firms
in that niche charge as little as $1.00 per trade. But, as usual, there is a catch. The deep discount brokers often charge lots more fees than most other brokerages.
The most common of these are fees for using trading platforms (could be hundred or more dollars per month) and account inactivity fees.
Deep discount brokers also tend to offer pay-per-share commission structure. With it, customer pays for each share in a trade. The more shares a client
buys with pay-per-share structure - the higher the cost. There is always a minimum charge per trade of at least $1.00. This pricing structure is different
than paying flat rate commission regardless of the number of shares which is offered at most other brokerage houses.
Let's take a look at the top deep discount brokerage firms in 2017:
Interactive Brokers is a deep discount online trading company that offers pay-per-share commission structure: customers pay $0.005 for each share with $1.00
minimum for SMART routed orders. This means that any order of up to 200 shares will cost you just $1.00. 500 shares will cost just $2.50.
1,000 shares - $5.00. And 2,000 shares costs much less attractive $10.00 per trade.
Options at Interactive Brokers are priced at $0.70 or less per contract plus exchange fees. Mutual funds cost is $14.95 per transaction.
Before you get too excited, you have to keep in mind additional costs: Interactive Brokers charges $10 monthly inactivity fee ($20 monthly if account balance is less than $2,000)
and $10 monthly for market data if your trading commissions are less than $10 per month. This means that investors who rarely trade could pay
up to $360 a year in inactivity fees.
Minimum to open most accounts at Interactive Brokers is $10,000. IRA accounts are being charged $30 annual IRA fee.
Learn more at Interactive Brokers Review.
Company doesn't offer promotions.
Open IB Account
TradeStation offers some of the lowest rates among deep discount brokers: it charges just $0.01 per share for the first 500 shares,
$0.006 per share thereafter, with $1.00 minimum per trade. With that rate all stock or ETF trades of up to 100 shares will cost you
just $1.00. Options pricing could be as low as $4.99 plus $0.20 per contract for very active traders. Mutual funds are priced at $14.95 per transaction.
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 (or 50 options contracts a month; or 10 round-turn futures or futures option contracts; or 50 round-turn single stock futures).
That fee also doesn't apply for accounts with $100,000+ balance.
This year TradeStation was rated Best Broker for Frequent Traders and Best Broker for International Traders by Barron's magazine.
We rated the firm Best Broker for Futures Traders and Best Broker for Day Traders in 2017.
Learn more at TradeStation Review.
Get up to $1,500 in commissions rebates.
Open Tradestation Account
Optionshouse is a top deep discount brokerage firm charging flat rate $4.95 for stock or ETF trades regardless of the number of shares in the order. For stocks priced $2 or less that are not
options eligible, there is additional surcharge of $0.005 per share for the entire order. Options trading is available with $4.95 plus $0.50 per contract
rate. Mutual funds are priced higher than at TradeStation: $20 per transaction.
Optionshouse is one of the top choices for active traders and day traders looking for flat rate commission account to make larger trades that will be too
expensive with pay-per-share pricing plan. The firm offers free checking account, real-time quotes, and virtual trading. Unlike TradeStation and
Interactive Brokers, there are no fees for inactivity and for IRA accounts.
Optionshouse has been rated Best For Stocks and Options Traders for the last few years in a row.
Learn more at Optionshouse Review.
Open and fund an OptionsHouse account to get up to $1,000 in free commissions for 60 days.
Open Optionshouse Account
Updated on 2/8/2017.