Best Brokers With Lowest ETF Commissions
For investors who primarily trade Exchange Traded Funds (ETF), there are several brokers that offer the lowest commissions on this type of investment. The attraction of ETFs is that one can select an ETF that represents a stock index such as the S&P 500, commodities such as gold or sliver, and even a stock sector like biotech. It saves the investor from having to select a specific stock and minimizes the company risk associated with single stock investments. The ETF world has grown considerably, and there are now selections that multiply returns (and losses) by 100-200%.
Since some traders like to use ETFs for shorter time frames, commissions may become an important factor when selecting a broker. The lowest ETF commissions are offered at OptionsHouse and TradeKing.
An examination of these brokers’ commissions and services reveals a few differences to consider.
The commission at OptionsHouse is $4.95 per trade, even if a broker assists with the trade. That is a nice feature, where some large brokers may
charge up to $40 to include a broker in the trade. This, combined with no maintenance or inactivity fees, as well as powerful trading tools makes
this discounter one of the best brokers for ETFs. One is limited in the areas of research and education, but that may be a low priority for ETF
investors. There is an additional fee $0.005 per share for trading a vehicle under $2, but most exchange traded funds are above that threshold so
it would not apply.
TradeKing’s ETF commission is $4.95 per trade, with an additional fee of $0.01 per share if the share price is less than $2. They do charge an
inactivity fee of $50, but don’t have account minimums or maintenance fees. TradeKing offers excellent trading tools, educational resources and
online community, so a trader does receive a bit more for their commissions spent on trading.
As with most broker choices, exchange traded funds traders will have to make a selection based more on the services offered by each, rather than
significant differences in commissions. For both of these top ETF brokers trades placed for ETFs over $2 will all carry the
same commission cost. Therefore if you want the best trading tools then we recommend Optionshouse
If having access to trader community is important then TradeKing
is your broker.
This article was updated on 9/28/2015.