TD Ameritrade 300
4.5-star brokerage rating

Best Broker for Short Selling Stocks (2020)


TD Ameritrade new account offer: Trade stocks and ETFs for free + get up to $600 bonus.



Advantages of Shorting Stocks at TD Ameritrade


If you’re thinking about shorting stocks and ETFs as a way to capture profits while the financial markets are retreating, TD Ameritrade is one broker to consider. It offers several resources that short sellers will need. Let’s check them out.


Software


The first strength bears will find at TD Ameritrade is professional-level trading tools. Its desktop platform thinkorswim offers a very advanced trading ticket with a lot of features. For the sell side, there are a variety of order types: market, limit, market-on-the-close, and limit-on-the-close.

When you’re ready to exit your short position, there are several order types you can use to buy to cover. Besides the ones mentioned for the sell side, there are also stop, stop limit, trailing stop, and trailing stop limit.


Best Broker For Shorting


A trailing order in a short position can be set to automatically drop if the stock price drops. If the stock price increases, the trailing order will not move. This order is used only to prevent an excessive loss, and is set above the market price. thinkorswim allows trailing orders to adjust based on several factors.


TD Ameritrade Promotion


Trade stocks and ETFs for free + get up to $600 bonus.

Open TD Ameritrade Account



Right-Click Trading


Right-click trading is enabled on thinkorswim. The best way to enter a short trade is to right-click on a chart and select “Sell custom” from the drop-down menu. From the sub-menu, click on “OCO bracket.”

This will produce a three-legged order. The first order will be your sell short order, and the other two will be buy orders. Why two? Because one can be used (hopefully) on the downside to capture a profit; while the other can be used as a stop-loss order in case the price action moves against you.

All of this is done in a single order. Not all brokers offer this convenience. The same type of trade can be entered on TD Ameritrade’s website. Just go to “Trade” in the top menu and select “Conditionals” from the sub-menu. Here, you can submit three orders (one sell and two buy) simultaneously.

Of course, if you would rather watch the stock and submit a buy order when you’re ready, you can do that, too.


Best broker for short selling


Research


To find investments that are overbought, TD Ameritrade once again hits a home run. Its website offers in-depth stock profiles, which include free stock reports for most big names. For example, we found 8 stock reports from 8 independent analysts for Caterpillar, Inc. Every single one of them includes a trade recommendation.

Besides the great (and free) information on stocks, TD Ameritrade offers its customers some pretty good scanners. These will be found on both the desktop system and the website.

On the website, just click on “Research & Ideas” in the top menu to find scanning tools for both stocks and ETFs. You don’t need to bother with the mutual fund screener because mutual funds aren’t shortable in the U.S.

Some of the search variables on the stock screener include sub-industry, dividend date range, and Bollinger Band Bandwidth. On the fund side, there are TheStree.com ratings, inverse status, and regional exposure.

On thinkorswim, there are stock and option screeners that offer many search variables.


Best brokers for shorting


Options and Futures for Bears


Bears can trade options and futures at TD Ameritrade. There are several option trades that will make money if an underlying stock suffers a tumble. These strategies can be traded either on the broker’s website or on the desktop program. Bearish option spreads that are programmed into the website include long strangle and bear put spread.

With SnapTicket, the broker’s web-based trade bar, it’s possible to buy puts and sell calls. Both of these are bearish strategies.

Futures can be traded on thinkorswim. Although there’s not quite as much information on futures contracts, the desktop platform does have user-friendly dealing boxes.

You’ll need to know the ticker symbol you’re interested in. Once you enter it into the correct field, you’ll be able to short the contract.

There are several equity index contracts that trade in the futures market. These include the S&P 500, the Nasdaq 100, and the Dow 30.


Shorting on the Mobile App


If you live a mobile lifestyle, you don’t need to worry about missing out on trading opportunities. TD Ameritrade has a thinkorswim mobile app that offers many of the shorting tools we’ve looked at thus far. Options, futures, stocks, and ETFs are all fair game on the app.


Pricing


And what does all of this cost? As it turns out, surprisingly little. TD Ameritrade charges nothing for its sophisticated trading tools. Stocks and ETFs have zero commissions. Options are 65 cents per contract, per side. Futures are a little pricier at $2.25.

TD Ameritrade does not charge interest on short positions, nor is interest earned from short sales.


TD Ameritrade Promotion


Trade stocks and ETFs for free + get up to $600 bonus.

Open TD Ameritrade Account



TD Ameritrade Review