Many investors are wondering if there are deep discount brokers that charge $5 or less to buy or sell stocks and ETFs. And the answer is "Yes".
Stock commissions came down a lot since the time Charles Schwab introduced discount stock trading for $30 per trade. Competition
among brokerage houses is stronger than ever, with new companies continuously pressuring established ones with aggressive pricing. There is
a clear trend of lower trading commissions and fees.
Let's review the pricing of the best deep discount brokerage firms offering $5 or less commissions on trading stocks and ETFs in 2013.
Interactive Brokers is a deep discount trading company that offers pay-per-share commission structure: customers pay $0.005 for each share with $1 minimum for SMART routed orders.
This means that any SMART routed order of up to 200 shares will cost you just $1.00. 500 shares will cost just $2.50. 1,000 - $5.00. And 2,000 shares
costs much less attractive $10.00 commission.
Options are priced at $0.70 per contract plus exchange fees. Mutual fund cost is $14.95 per transaction.
But, you have to keep in mind additional costs: Interactive Brokers charges $10 per month inactivity fee ($20 per month if account balance is less than $2,000)
and $10 per month for market data if your trading commissions are less than $30 per month. This way the total inactivity fees could be as high as $360 per year.
There are also fees on modified or canceled orders ($1.20 fee to modify or cancel an option order). IRA accounts are being charged $30 annual IRA fee.
Read full Interactive Brokers Review.
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TradeKing is a top deep discount brokerage firm charging flat-rate $4.95 for stock and ETF trades regardless of the number of shares in the order.
Options are priced at $4.95 plus $0.65 per contract. For stocks priced $2 or less there is an additional surcharge of $0.01 per share on the entire order
Mutual funds are priced lower than at Interactive Brokers at just $9.95 per transaction.
TradeKing 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 per-share plan. The firm offers free real-time quotes and virtual trading. Unlike Interactive Brokers,
there are no fees for inactivity, to cancel or modify orders, and IRA accounts.
Read full TradeKing Review.
Open TradeKing Account:
This article was updated on 10/16/2013.