Best broker to trading options 4 day

The Best Options Broker. Latest Update October 28, 2016. The best options trading platform isn’t going to be an afterthought tacked on to an existing suite of products: it should be robust and easy to use. Beginners need enough support to learn the ropes and experienced traders are after low fees and powerful tools. We signed up, assessed the fees, took the tools for a spin, and narrowed it down to three top picks. The one that's best for you depends on what you’re after. Tons of online and in-person support, plus a practice platform that lets you try everything out with “paperMoney.” The downside? Higher fees. Rock-bottom pricing, but no research or method support. Unrivaled tools & research with pricing that favors active traders.

There are a lot of brokers that are perfectly capable of trading options — nearly all of the big (read: old-school) names have an options platform integrated into their suite of offerings. But for those looking to really dive in, whether as a beginner just starting out or an active trader looking to level up, the best platform won’t be something that’s just tacked on. How We Found the Best Options Broker. To find the brokers that cater specifically to options, we looked at 36 choices and analyzed their products. We prioritized the most important aspects: Cost matters a lot when it comes to trading options. It’s the very nature: part of the appeal of options is that the returns can be major even if you don’t fork over a lot of cash up front, and many traders use options as a cheaper alternative to going long on a high-priced stock. Fees can add up and even wipe out the profits from any profitable trades. Granted, slightly higher fees may be worth it if a broker can provide other perks (say, excellent resources and education for beginners), but we wanted all our picks to have competitive pricing. We also wanted to avoid minimum balance requirements, or a set number of trades per month. Easy-to-use interfaces are a make-or-break for most platforms. The price of options contracts can swing a lot over the course of a trading day poking around a clunky options chain can literally cost you. Education and resources are important, especially for investors who are getting their feet wet. Sure you’ve got a handle on multi-leg options trades, but do you know when it’s the right time for a bull call spread?

What’s an iron butterfly? Not all traders will need hand-holding, but we wanted to find at least one excellent options broker we could recommend to newcomers. Flexibility can be interpreted a few ways. For us, it meant the robustness of the platform (could we research and purchase stocks and ETFs in addition to options?) its flexibility (could we streamline a multi-leg options trade, or did we have to input them all separately?) and whether or not we could customize it to our liking. It was quick work to eliminate the most expensive platforms, as well as the ones that had absolutely no resources or reports. To test ease of use and flexibility, we signed up for accounts and simulated making trades on all the rest. Three brokers rose to the top, and each brings something unique to the table. Our Picks for Best Options Broker. TD Ameritrade Higher fees on an ultra-easy platform. Plus, tons of support and education.

TD Ameritrade is one of the largest online brokerages in the market today, with over 7 million funded customer accounts and over $700 billion in total client assets, and despite its slightly higher prices, it provides the best platform for a beginner trading any product, options or otherwise. For more novice traders, the platform supports the jump from trading stocks with the funds in an IRA to more sophisticated products like options. It’s robust, plus it has the customer service and educational resources to make the transition. There are webinars and hours of on-demand videos that’ll teach you about options strategies and how to literally execute those strategies on the platform. TD Ameritrade is a full-service broker, and that full service (we’re talking 247 customer service and 100 branches for face-to-face consultations) does come with higher fees. Barron’s agrees, awarding it “best platform for novices” five years running. We can anticipate its service only getting better too. In 2016, TD Ameritrade started the process of acquiring Scottrade, another platform known for it’s in-person customer service offerings. In fact, TD Ameritrade is one of the best platforms for all levels of investors, serving up two discrete products: thinkorswim and Trade Architect. Thinksorswim is a desktop platform designed for an all-around trading experience: charts with real-time data, news tickers, 300-plus technical studies, alerts and alarms, heat mapping, options screeners, securities scanner, and more, all accessible in a single click. It’s definitely for seasoned investors — newcomers will likely be overwhelmed — but it’s worth bringing up because a virtual playspace called paperMoney allows even total novices to cut their teeth without risking even a single penny.

We recommend beginners stick to TD Ameritrade’s web-based platform Trade Architect. It is nowhere near as robust as thinkorswim (and has nowhere near as jazzy a name), but it provides everything a new investor would want and it’s ultra-easy to use. It’s not bogged down with all the bells and whistles and live-streaming CNBC. Tabs at the top are simply categorized under jargon-free headings: account overview, watch lists, alarms, idea generators, and heat maps. Unlike thinkorswim, the platform is customizable. If you want more widgets, like say, additional stock tickers or video, they’re there for the adding. If beginner investors use TD Ameritrade’s education library to learn the ropes, practice using paperMoney in thinkorswim, and then easily execute trades with Trade Architect, the slightly higher fee may suddenly seem worth it. OptionsHouse The lowest fees and no minimum balance requirements. OptionsHouse isn’t the most recognizable name in the industry, and that’s probably because this online broker hasn’t pursued an aggressive marketing campaign like some of the other brokers out there (remember E*Trade’s old Super Bowl ads?). The company was founded in 2005 and was established to specifically provide options traders who demanded lower fees from the then burgeoning online brokerage industry. Those low fees are still what makes OptionsHouse so popular. There’s a $0 minimum deposit to join and options trade at $4.95 + $0.50contract (stocks trade at a flat $4.95 fee).

This is the lowest price in the industry. Only TradeKing comes close — matching that $4.95 options base fee, but charging $5 more than OptionsHouse for the exercise fee. The OptionsHouse platform is striking if a bit chaotic — there are buttons, tabs, and menus all over the place. It’s intuitive and there’s a tutorial to walk you through, but to a beginner it might seem more like sitting in front of the controls of an aircraft than is comfortable. Beginners take note: OptionsHouse does have a virtual platform that’s great for practicing. And, the tradeLAB makes dissecting options spreads simple — the green smiley face is good the red frown is no good. What you won’t get for those low fees is method and research: OptionsHouse has about 30 technical studies TD Ameritrade has 300. It’s important to note that E*Trade purchased OptionsHouse for a whopping $725 million in 2016. It is still unclear how any pricing structures or account features and perks will change after the sale is completed, but an OptionsHouse blog post suggests that E*Trade’s tools and services will become available after the platforms merge. Best Tools and Research.

optionsXpress A one-stop shop within a major firm, with an options-native platform. OptionsXpress was purchased by Charles Schwab back in 2011 to enhance Schwab’s competitive edge in options trading. The result is a one-stop shop with an options-native platform that’s pretty whiz-bang. Everything happens through the desktop platform, Xtend, but all the trading tools are also on the optionsXpress web platform. It’s fully customizable, and it’s easy to find real-time quotes and market data, news and reports, and company background information. The Idea Hub scans the market for volatility, earnings, and income-based strategies and offers new trade ideas. With Walk Limit, you can set a few parameters, and it will scan updated market data and re-create an order you may have made at a higher price in the past. Sign up for the Xpresso newsletter and you’ll get a daily email alerting you to the day’s risks and opportunities. Add to that an impressive library of educational resources, as well as access to all of Charles Schwab’s investment research (and free access to its seminars and meetings at local branches), and a virtual trading platform that helps beginner investors practice all types of trading with $25,000 in fake cash. If you need help from a broker — to calm your first-timer nerves or to walk you through a complex method — they’re ready to help and totally free, too. The standard rates are steep, so we don’t recommend optionsXpress to the casual trader.

Make more than 35 trades a quarter and you’ll click into “Active Trader” status and your fees will go down. Trade in volumes and there’s another discount trade contracts under a nickel and there’s another discount. This is all to say the price structure favors the active. And while optionsXpress has a $0 account minimum and does not charge any annual or inactivity fees, if you leave, there is a $60 full outgoing transfer fee. The Best Options Broker at a Glance. Options are contracts that allow an investor the right, but not the obligation, to buy or sell an asset on or before a set date. Here’s an example: Say you are a buyer looking for a specific vintage car and you end up finding one you just have to have. When you find it, however, you know you won’t have any cash to buy it for another six months. You then negotiate with the owner to give you an option to buy the car in six months for a specific amount. If the owner agrees, you pay him a percentage up front for that option. The same scenario applies in the stock market – just for financial assets instead of vintage cars.

If you were trading stocks, you’d be actually buying the car. Or, rather, not buying it since you didn’t have the money. Because options are simply options and not promises, if something happened to that vintage car — say it was sitting in the driveway and a tree fell on it — you wouldn’t have to buy it. You’d still be out the price you paid for the options contract, but at least you wouldn’t have lost all that money on a now-worthless pile of steel. And, if in those same six months something happens that makes the car go up in value, well, hey, you’ve already locked in your price. If you’re new, you should prize learning tools. If you’re experienced, you’ll need to choose between low cost or amazing tools. No matter what, options trading shouldn’t be an afterthought tacked onto your platform. Best for Beginners. TD Ameritrade TD Ameritrade fees might be higher, but sometimes you get what you pay for. Consider your entire investment method.

Don’t make your final decision solely based on options trading if it’s not the only kind of trading you’ll be doing. These online brokerage firms all offer a variety of investment opportunities. You may want to take into account their extra perks or the price of their mutual funds, for example. Know your expirations. Options are contracts that expire if they’re not acted on and an expired contract is worthless. Make sure you understand your expirations and set reminders using your broker’s platform, or on your calendar if you’re not trading every day. We find the best of everything. How? We start with the world. We narrow down our list with expert insight and cut anything that doesn't meet our standards.

We hand-test the finalists. Then, we name our top picks. Day Trading Options: 5 Best (Starter) Platforms. Once you’ve learned the basics of day trading – you might get the idea that the process is easy: buy options, sell them within the day, repeat the next day. Don’t let that fool you, however options day trading can get a little bit tricky. This is where trading platforms come into play. Online brokers love the options day trader, most likely due to its higher returns compared to stock trading. This encourages stiff competition, leading to innovative solutions and friendlier price points, which is a great plus for investors and day traders. This article will discuss all you need to know about the options trading platform and online options trading in general. First, I’ll give you the essential factors and features that you need to consider before choosing an online broker to manage your day trade options. Once that’s settled, we’ll discuss the five best platforms available – from general overviews, price points, advantages, disadvantages, and other useful information. Let’s get started!

Top 5 Options Day Trading Platforms. min Balance req. $4.95 + $0.50 per contract. $4.99-9.99 + $0.20-0.70 per. contract (based on volume) Superior Platform Interface. $12.95 (Active Trader)$14.95. (Standard Trader) + $1.25-1.50. per contract (based on volume) $1000 (waived with. $100 monthly auto-deposit) $8.95 + $0.75 per contract. $9.99 + $0.75 per contract. Factors to Consider Before Choosing an Online Broker for Day Trading Options. More frequently than not, individuals tend to choose brokers with the lowest price points.

While cost and fees are indeed important, they’re not the only things you should consider before choosing an online broker for trading options. Sure, you might get the least expensive broker – but at what price? You also need to take into consideration the following factors: Interface and Simplicity. These factors may be even more important for beginners in day trading. Online brokers exist to make your life and investment processes simpler and easier – not the other way around! You’ve got enough to worry about in formulating strategies for day trading, you really shouldn’t be wasting time figuring out how to use a trading platform. Commissions and Fees. I still have to mention it, as it is an important factor to consider. Commissions and fees can make or break your actual returns on investment. Be wary of fees that may be hiding in plain sight or are written in fine print, such as maintenance fees and trading fees. Similarly, commissions and fees should be direct, to the point, and simple in nature. Available Research and Technological Tools. These are arguably the most important points to look for in a trading platform.

Research – which includes opinion articles by the pros, corporate publications, and news in general – can help you make smarter decisions in day trading. These should be readily available in the online platform you choose, and should be updated promptly. Trading tools, on the other hand, will help you analyze trends that may be based on the research data available on the site. Make sure that the online broker you choose is affiliated with trusted associations. For more information, visit the Financial Industry Regulatory Authority’s (FINRA’s) website.. Your broker should also be able to guide you step by step. There’s nothing like great customer service, online brokers’ included. There are a lot of other features that you might look for once you get the hang of it, but the factors listed above are the most basic ones to look out for in online trading platforms. The Five Best Trading Platforms. Now that you know what features to look for in an online broker, you may start to wonder: which should I choose? You might be overwhelmed by the amount of platforms available for day trading options. Simply visiting their websites might not be enough for you to comprehend their services.

But don’t worry. We’ve got you covered! We did the research for you and tested various trading platforms available for day traders. Here are the five best option trading platforms (in no particular order), along with some information on their fees, key features, pros, and cons. Minimum balance requirement: $0. Commission for options: $4.95 + $0.50 per contract. OptionsHouse has one of the lowest commissions for options trading, which makes it attractive for beginners and experienced users alike. Founded in 2005, OptionsHouse quickly became one of the top choices for day traders for its low base rates. If you’ve decided to go for discount brokers, OptionsHouse may be the best choice for you. In 2014, OptionsHouse merged with TradeMonster, which helped improve its overall trading capabilities. One feature that many users love about OptionsHouse is its highly customizable platform, where you can tweak and select the sections you prefer to see on your dashboard. The website also provides you with useful options trading tools, such as options chains, risk viewers, and option calendars.

OptionsHouse also boasts of its fast order entry. Processes are streamlined (a guide they call ‘tradeCYCLE’), and you can input orders and add stocks with ease, and in an instant. Beginners may also find OptionsHouse attractive with its archived webinars that teach you how to go through day options trading. There is a downside to the simplicity and efficiency of OptionsHouse, however it may not be for individuals looking for platforms that have a number of investment products (for one, it lacks Forex trading). Its name speaks for itself: it mainly focuses on options. Lastly, OptionsHouse is not a full service broker. As previously mentioned, this is for those who are looking for a discount broker. OptionsHouse is perfect for those seeking low fees, advanced trading tools and platform, and efficiency. Minimum balance requirement: $5,000. Commission for options: $4.99 to $9.99, with $0.20 to $0.70 per contract (based on volume) TradeStation has one of the best design interfaces and platforms among online brokers, a major reason experts shower it with praises. It’s also one of the fastest and most efficient online trading platforms, with fast order placements and trade executions incorporated. For a visual of the interface and a review of the platform by Chris Dunn, see this video: One of our favorite features on TradeStation is its OptionsStations tool, which makes analysis of possible option trades infinitely easier.

It also includes a P&L chart in 3D format – visualizing your profits and losses and helping you choose better potential trades. You can even rank possible trades, and analyze various options positions. Tools are also available for you to formulate and test out your trading strategies – and even earn from them by selling these strategies to interested investors. Another plus for TradeStation is its availability on mobile (on both iOS and Android). The app isn’t quite as comprehensive as the web platform yet, but you can still view and analyze real-time data and make trades. This is very important for day traders, as you have to be alert to sudden changes any time – and you should be ready to make the trade. A word of warning though: TradeStation issues a monthly brokerage fee worth $99.95, and it’s not for those who are conservative with their options as it is more beneficial for those who trade in bulk. If you’re into trading massive volumes of options, though, then TradeStation may be the perfect platform for you. Minimum balance requirement: $0. Commission for options: $0 Base Fee, $12.95 to $14.95 + $1.25 to $1.50contract based on volume. OptionsXpress mainly focuses on features that would highlight its strength in options trading, such as real-time options trade data, quotes, and options chains. Similar to OptionsHouse, OptionsXpress’s platform is highly customizable, and is very easy to use. OptionsXpress also is one of the faster and more efficient online trading platforms available. Inputting an order with a wide array of different options is possible with its simple, all-in-one interface.

The platform also offers useful trading tools such as price calculators, and charts that will help you track different options’ volatility. One of their most powerful tools is the DragonTool, which lets you search for options based on your personal preferences and strategies. Beginners also can find resources in OptionsXpress that would be useful: for one, they have a virtual trading platform that lets you invest $25,000 in virtual money – which can help you create and fine-tune your trading strategies in real life. OptionsXpress also has an Education Center, which houses videos that teach newbies the how-tos of day trading. In addition, new users get a free 13-month subscription to a daily financial newsletter which cites notable news, publications, reports, and trends in the market – very handy for those looking to earn more in the options trade. Like TradeStation, however, OptionsXpress favors those who trade options more actively. So if you’re just starting out and are just trying to test the waters in day trading, their pricing structure may not be the most preferable – you’d be better off with OptionsHouse. But if you’re an experienced day trader who trades on a regular basis, their pricing is a major plus. Another disadvantage to consider is that their customer service includes chat and telephone clients which you can access during the day, but the 24-hour customer support is only available to futures traders. Minimum balance requirement: $1,000 (waived if you have an automatic deposit of $100 per month) Commission for options: $8.95 + $0.75 per contract.

The parent company of OptionsXpress, Charles Schwab is one of the frontiers of options trading. The company was founded in 1971, and has garnered vast experience in the options trading game. They’re not limited to options trading, though, as they are a full investment company (which can be an advantage if you’re looking to trade investment products other than options). Charles Schwab is one of the best platforms if you’re looking for research data, analysis, and trading tools. Similar to OptionsXpress, Charles Schwab offers a customizable platform for those who want to incorporate their personal preferences on the interface. Beginners and advanced traders alike will also enjoy their other useful resources, such as live webinars, educational videos, seminars (at Charles Schwab outlets) and financial commentary by the experts. While there is a vast amount of resources that can be found at Charles Schwab, some users have complained that the interface looks a bit disorganized, especially if you don’t know specifically what you’re looking for. Though they offer 24-hour customer service, many have also said that Charles Schwab’s email support is not on par with other options brokers’ levels. Minimum balance requirement: $0. Commission for options: $9.99 + $0.75 per contract. You’ve probably heard of TD Ameritrade, and you’ve most likely even tried one of their most popular virtual trading tools, thinkorswimⓇ.

But TD Ameritrade’s services don’t just stop at virtual trading, they also offer one of the best online options platforms currently available. Their much-lauded analytical tools, thinkorswimⓇ and Trade ArchitectⓇ, offer users with highly functional features that can help you follow market trends, analyze them (through graphs and charts), formulate a method, and implement them instantly. Advanced users in particular will likely enjoy these features (with their wide array of settings that can be customized), but beginners are also welcome in their very user-friendly online platform interface. TD Ameritrade also comes with a mobile app, suitable for those who want to closely follow news and trends in the market. Aside from their advanced trading tools, TD Ameritrade has some of the best research data and commentary available for options traders. They also provide users with experts’ commentary, reports, and charts (among many others!) when you look for a quote for a company. Courses are available for users in all levels (Beginner, Advanced, or Expert). Aside from these helpful materials, TD Ameritrade also offers live and online seminars and workshops, and other educational videos. These amazing features come with a heftier price, however. TD Ameritrade’s commission and fees are significantly higher than their competitors. Those who are looking for international market access won’t find it on TD Ameritrade, either. But, if you’re willing to spend more for better tools and data, TD Ameritrade hits the nail on the head.

I have provided with you with important factors to consider before choosing an online options broker, and some exceptional online trading platforms. A final word of advice: before choosing the platform you really want to use, make sure that they pass all your requirements – and are equipped with the tools that you want to use. If you’re not sure exactly what you’re looking for in online trading platforms yet, don’t worry – you’ll learn that along the way. You’ll form your preferences over time and learn valuable things about options trading, and you’ll find the best options trading platform for you. All of the platforms listed above are helpful for traders of all levels, so don’t be afraid to try it out and start day trading! No related posts. Zequek Estrada says. Recently I’ve taken an interest in day trading platforms. This answered some questions I’ve had about it. Although I don’t know if I’ll actually choose a platform, it’s good to be aware that you need to check if your choice is equipped with all the tools that you want to use. Leave a Reply Cancel reply. COMPENSATION DISCLOSURE. Top 10 Explosive Penny Stocks to Invest In 2017 (Hot Picks) Methods For Building And Repairing Credit. 3 Best Small Business Credit Cards for 2017.

Popular Categories. Tom Smallwood. Tom is a former accountant turned entrepreneur. He is not a financial adviser but does tend to give a lot of financial advice to his friends and colleagues. He currently runs a small online venture and blogs about his research and experiences. Best Online Trading Platforms for Day Trading. NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent. We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers. If you’re an active trader looking to try your hand at beating the market, you probably have a good idea of what you want in a brokerage: low costs, premium research, innovative method tools and a comprehensive trading platform. Below, we’ve selected the best online brokers in a variety of categories so you can choose one based on your personal priorities. One note before you begin: Pattern day traders — as defined by the SEC — must have at least $25,000 in equity in their accounts and be approved for margin trading, regardless of whether their broker’s account minimum is lower. » New to this world?

Learn the basics with our guide to how day trading works. Best Online Trading Platforms for Day Trading. Interactive Brokers: Best overall & for low margin rates TD Ameritrade: Best overall & for trading platform Charles Schwab: Best for trading platform Ally Invest: Best for options trading TradeStation: Best for options trading EOption: Best for low margin rates. Summary: Best Online Trading Platforms for Day Trading. Best trading platform. Best for options trading. Best for lowest margin rates. The best online brokers for day trading. These brokers are our best overall picks because of their competitive pricing and strong trading platforms and tools. TD Ameritrade and Interactive Brokers have that powerful combination that every trader wants: Low commissions paired with advanced trading tools and platforms. Interactive Brokers may have an edge with traders who prefer per-share pricing and can meet the $10,000 account minimum and $10 monthly commission minimum — both of which docked the broker slightly in our star ratings.

TD Ameritrade offers a very competitive flat rate and no minimum balance requirement. Both brokerages offer a very extensive investment selection, including futures options and forex trading, while Interactive Brokers also offers precious metals. The best trading platforms. These brokers offer some of the most powerful trading platforms available, with no minimums or fees. Both top picks, TD Ameritrade and Interactive Brokers, have strong trading platforms. But TD Ameritrade also excels here, as does Charles Schwab . TD Ameritrade offers what may be the best trading platform available, thinkorswim , along with Trade Architect , a second platform designed for simplicity. Charles Schwab also offers two excellent platforms: Streetsmart. com, a Web platform suitable for beginners, and StreetSmart Edge, a more advanced option with elevated charting functionality. Both brokers make all of their tools and platforms available to all customers with no trade activity or balance minimums (taking into account Schwab’s easily avoidable $1,000 account minimum). The best online brokers for options trading. These brokers offer the strongest tools for options traders.

Ally Invest and TradeStation are both superior brokers for options traders, though their appeal depends largely on trade activity and platform needs. TradeStation is for seriously committed traders: The company’s platform — which is outstanding — comes with a $99.95 monthly fee, waived only for those who in the previous month carried a $100,000 account balance or traded at least 5,000 shares, 50 options contracts or 10 round-turn futuresfutures option contracts. (Note: In March 2017 the company eliminated monthly service fees for its desktop, mobile and web-trading apps for non-professional subscribers on the per-trade pricing plan.) Active but low-volume options investors will probably prefer TradeStation’s per-shareper-contract commission schedule ($1 per option contract, no base or ticket charge, with a minimum one contract market or limit order). Options traders at Ally Invest (formerly TradeKing) pay a $4.95 base plus 65 cents per contract with only one base charge per spread. They also get access to a powerful platform with no additional charge, including free options trading tools for screening and advanced charting. Navigation is intuitive, and customers can create a custom dashboard that includes the data and features they want to use. The setup extends to all devices, including mobile and tablet. The online brokers with the lowest margin rates. Traders who utilize margin should prioritize a broker’s margin rates in their search.

Our top choice for best online broker wins here, too — in fact, no one comes close to Interactive Brokers when it comes to margin rates, so if that’s your No. 1 priority, you’ll likely find your home there. The broker charges a blended rate based on account balance, but features a calculator on its website to help investors quickly do the math. As noted above, Interactive Brokers does impose monthly trade minimums. EOption has a lower minimum deposit requirement and more reasonable trade requirements, charging a $50 inactivity fee only on accounts that haven’t traded at least twice in the past 12 months or have less than $10,000 in credit or debit balances. Both brokers charge very competitive commissions for stock and options trades. Best platforms for day trading: summary. Interactive Brokers. Low margin rates. min. $1, max. 0.5% of trade value. Ally Invest. base + $0.65 per contract. EOption.

Learn more about day trading before diving in. Day trading is buying and selling stocks within a short time frame, often inside a day. The goal is to capitalize on stocks with rapid and frequent price fluctuations. Day traders often buy a stock they expect to rise in price, or short-sell a stock they expect to fall. Day trading isn’t for the faint of heart — it magnifies all the inherent risks of investing — and should be used as a secondary method, after you’ve invested for long-term goals like retirement. To learn more, read our primer on day trading. How much money do you need to day trade? The SEC requires that pattern day traders maintain at least $25,000 in equity in their accounts. Under the SEC rules, you’re a pattern day trader if you day-trade four or more times within five business days and the day trades represent more than 6% of your total trading activity in that same five-day period. Day trading, defined by the SEC, is buying and selling or short-selling and buying the same security on the same day. In our view, that means you should have an awful lot of money to engage in day trading, because that $25,000 should represent just a small piece of your overall investment portfolio — the bulk of which should be invested for the long term. What’s the safest way to day trade? Our guide to how to day trade gets into advice for minimizing risk, but as a quick synopsis: Rule No. 1 is only put up money you wouldn’t mind parting with. In other words, treat day trading like gambling, not long-term investing. Beyond that, be sure to do your research before you jump in, and establish an exit plan.

It’s easy to make rash decisions when your positions start going bad, so setting rational strategies in advance can help curtail emotional reactions. How do you learn how to day trade? Practice. Many brokers offer virtual trading accounts that essentially let you test the waters with Monopoly money. It’s a great way to get started without the risk. We’ve put together a list of virtual trading platforms, along with more information about how these work. We highly recommend testing out your trades on a virtual platform before putting your money on the line. What securities are best suited for day trading? Most day traders trade stocks, though you can day trade bonds, currencies or commodities, too. Generally, you want to look for securities that are: Highly liquid, with large trade volume. Relatively volatile. You want frequent price changes, which allows you to make a profit quickly. Known to you. An understanding of the stock’s price history, and how it reacts to various events — earnings reports, economic shifts — is key.

Many day traders trade only a few specific stocks, developing expertise in those companies and narrowing their focus. Newsworthy. Coverage of a stock will trigger people to buy or sell it. As a day trader, you’ll want to follow the news to find trade ideas. » Don’t think day trading is for you? Here are other suggestions for how to invest. Updated Sept. 22, 2017. Arielle O'Shea. Arielle is a personal finance writer at NerdWallet. Her work has been featured by Esquire, Money, USA Today, Forbes and The Associated Press. Read more. Disclaimer: NerdWallet has entered into referral and advertising arrangements with certain broker-dealers under which we receive compensation (in the form of flat fees per qualifying action) when you click on links to our partner broker-dealers andor submit an application or get approved for a brokerage account. At times, we may receive incentives (such as an increase in the flat fee) depending on how many users click on links to the broker-dealer and complete a qualifying action.

Best Online Stock Trading Brokers for 2017. Finding the right broker for you is not as simple as it seems. I’ve had an online stock trading account since I was 13 years old. I’ve used at least a dozen of the best online stock trading platforms in real practice and in testing over the past 4 years. I’ve gained a few “learning experiences” from managing my own account and working as a day trader for a firm in Chicago for several years. Using my knowledge of the platforms and experience as a trader, I worked to uncover the top picks and identify who or what each product is best for. The Simple Dollar’s Top Picks Best Online Brokerage Accounts in 2017. Optionshouse – Best Discount Broker (also Best Options Broker) Scottrade – Best Support and Service E*TRADE – Best Trader Resources TD Ameritrade – Best For Developing Traders. What Matters When You Trade Stocks on Your Own? Managing your own money can be a stressful endeavor. To minimize this, and to minimize information overload that tends to come from watching the markets 247, there are a few must haves that I look for in an online broker.

Clean interface. When I trade, I want to be able to easily find my order entry ticket. I don’t want it buried under a number of drop downs. This interface should have intuitive access to see your balance, available cash, positions with real time PL and all be easily navigated. Quick access to basic charting. A chart tells me where the stock has been recently. I don’t trade minute to minute anymore, so I don’t need complex tools like stochastics or retracement lines. All that’s important is that I have a basic chart on a yearly, monthly, weekly, daily and intra day time period. I use a chart to see current price relative to those time periods, mainly to avoid purchasing at a bad price. Low fees. Self explanatory. There are over 50 online brokerages where you can open an account.

Beyond the my three rules above, best online brokerage accounts aren’t just for trading stocks. Sure, many of them started as online stock trading accounts, but now they’re full-fledged trading, saving, investing, retirement planning, and banking machines. This industry is more complex than the average person thinks. You shouldn’t just pick any online broker and sign up for an account. The best online broker for one person is often completely different for the next person. Use this resource as a guide to your decision process. Figure out what features are best for you, and make your selection. What Makes a Great Online Broker? I analyzed a number of elements to come to my decision on which brokers are the best. Later in this post, I provide full details on how I selected the best online brokerages. When you take all the features, resources, trading platforms, and technology into account (while also considering every type of trader), the full-service brokers, like E*TRADE and TD Ameritrade are the best for the largest number of people.

For those simply looking to make cheap trades, I would recommend going with Optionshouse. If you’re a very advanced trader, high-volume trader, or a professional who manages money, I recommend going with Interactive Brokers. However, I didn’t include Interactive Brokers on my list because they’re best for a very small group of traders and the platform is very complex. Top Qualities of Standout Online Trading Platforms. Quality trading tools and technology Multiple trading platforms for all levels of traders Excellent mobile trading features Solid navigation that displays the relevant information where you want it Quality educational resources and research for trader development. There’s more to selecting an online broker than price. You have to consider the resources you’re getting for the cost you pay per trade. For example, my colleague, who is also an ex-trader, likes to use a combination of stock and options trade in his longer-term trading. He recently switched over to Fidelity because he really liked the cash management features, but was very disappointed by complex order entry, sub-par options execution and frustrating navigation. He’s currently making the switch to one of the brokers I profile here. Analysis of the Best Online Brokers. When it comes to getting a deal on a stock or options trade, it’s tough to beat OptionsHouse. Along with the low costs and fees, you’ll also have access to proprietary tools and technology. OptionsHouse isn’t a “full-service” broker like TD Ameritrade, which means you won’t find the same comprehensive financial resources and access to every investment product.

OptionsHouse is good at what they do — providing very affordable trading prices, low margin rates, and unique tools for stock and options traders. NOTE: OptionsHouse was acquired by E*Trade at the end of 2016, but no changes are expected to OptionsHouse pricing or trading platforms, according to this statement released by its CEO. Reasons to Sign Up. Reasons to Avoid. OptionsHouse Costs and Fees. Stock Trade: $4.95 for new traders, $3.95 for current traders> 4 Reasons to Sign Up for OptionsHouse. Very Low Costs and Fees. If you compare OptionsHouse to the other best online stock trading firms, the cost to make a trade with TD Ameritrade and E*TRADE will be about double . Simply put, if you’re looking for the best discount broker, Optionshouse is your choice. The only other broker that’s cheaper is Interactive Brokers, but they require a $10,000 minimum deposit and their software is built for advanced traders. Customizable Web-Based Trading Platform. The OptionsHouse web-based platform is completely customizable, meaning you can remove or add different components, minimize sections, and adjust the entire home screen to your preferences. One cool feature is that you can click on any of the components on your home screen and detach it so it shows up in a separate window.

For example, if you have two monitors, or just want their charts opened separately, you can have your trade execution tools in one spot and your charts in another location. Advanced Options Trading Tools. OptionsHouse is one of the three best options brokers (the others are optionsXpress and tradeMONSTER). Not only is OptionsHouse the cheapest for trading options, but they also provide you with an account view that enables you to look at an options calendar, options chains, and all kinds of option spreads. There are several proprietary tools that help you gain insight into your risk or exposure in addition to the quality options trading tools. For options traders and, more specifically, high-frequency traders, OptionsHouse is a solid choice because you can fire off trades with the quick-order entry ticket. If you simply type in a quote, you can instantly add a stock or option leg to a trade. Navigation is simple and everything is laid out to ensure you can move around your account efficiently while making options trades with ease. 2 Reasons to Avoid OptionsHouse. Lacking Access to Several Investment Products. If you’re someone who’s interested in trading a variety of markets or growing your trading knowledge, you probably shouldn’t open an account with OptionsHouse. As the name implies, this online brokerage is best for options traders and people who want to make cheap trades.

You won’t be able to trade futures, forex, or international markets. This isn’t a big deal if you’re just looking to trade options or trade stocks for low prices. Not a Full-Service Broker. Unlike TD Ameritrade, E*TRADE, Scottrade, and other major brokers, OptionsHouse is built mostly for trading and not much else. You won’t have access to banking or comprehensive financial services, so expect to have your money split between multiple accounts versus keeping it all in one place. For years, Scottrade has been known as the best online brokerage for customer service. Scottrade doesn’t just let you open an account and ignore you. They thrive on building relationships with their clients, which is pretty rare these days. Scottrade is behind the times with some of their features, but they also don’t charge as much money per trade as the other full-service brokerages. If you’re a new trader or you just like being taken care of regardless of how much money is in your account, I don’t think you can do better than Scottrade. Another reason to consider Scottrade: They were recently acquired by TD Ameritrade. The deal is expected to close by fall of 2017 and a full conversion to TD Amertrade’s systems by 2018.

You’ll be well-served with Scottrade’s amazing service for beginning traders and TD Ameritrade’s breadth of offerings for traders of all levels. Reasons to Sign Up. Reasons to Avoid. Scottrade Costs and Fees. Mutual Funds Fee (Load): $0 to buy, $17 to sell. Minimum Deposit: $2,500 (recently updated), $0 for retirement account. 4 Reasons to Sign Up for Scottrade. Industry-Leading Customer Service. Year after year, Scottrade is on Fortune magazine’s list of 100 best companies to work for. In fact, Scottrade has been on that list for six straight years. So what does that have to do with customer service?

When a company treats their employees the right way, those employees treat customers the right way. In a J. D. Power and Associates self-directed investor study, Scottrade also ranked number one for interaction, account information, trading charges and fees, and overall satisfaction. (This study only included larger, full-service brokers that offer other services beyond trading.) Scottrade has over 500 local branches where you can walk in and talk to someone face-to-face. There’s a live chat feature on their website and you can even reach out to them via social media, where they are very active. Access to Long-Term Investment Vehicles. The only markets you can’t trade with Scottrade are forex and futures markets. So beyond the basics, Scottrade is another full-service broker that offers banking services, retirement planning, savings plans, and more. It’s not strictly about making trades but, if it was, Scottrade’s prices are affordable in comparison to other full-service brokers. Intuitive Web-Based Platform. The web-based platform has a fully customizable home page that enables you to drag, drop, and rearrange the various components of the page to your preferences. At the the bottom of every page, there’s an intuitive “Quick Trade Bar” that enables you to conduct research and make trades quickly.

The bar even detaches from its location so you can place a quick trade even if you’re not on your account home page. This comes in handy if you’re on a third-party website and you read about some news that’s impacting the market — you can quickly get in or out of a position. Affordable for a Full-Service Broker. Compared to TD Ameritrade, Scottrade’s trading commissions and fees are nearly $3 cheaper per trade. That can certainly add up depending on the volume you plan on trading. For investors who want the amenities of a full-service broker, but don’t want to be paying top dollar to execute trades each week, your money can go further with Scottrade. The Reason to Avoid Scottrade. Not Overly Innovative. Scottrade has the foundation in place to rise above the other top online stock brokers, but they fall short when it comes to innovation. There are a few instances where major improvements can be made. The mobile app looks like it was created five years ago. It’s difficult to navigate, very slow, and hard to trust for mobile trading.

The app does include an area where you can research news, statistics, opinions from analysts, and more. The components are there for a solid mobile app, but it just hasn’t come together yet. If you compare Scottrade to the other brokers, they’re also behind the times in terms of technology. It’s rare for Scottrade to develop any kind of technology before the other best online brokerages. They lead the industry with support and service, and then they follow in terms of technology. Low-Frequency Traders Long-Term Investors Research-Based Traders Multiple Market Traders. E*TRADE is right there with TD Ameritrade and Scottrade if you’re looking for the all-around best online brokerage. What’s interesting about this comparison is that E*TRADE excels in several different areas compared to TD Ameritrade and Scottrade, but also has many similar offerings. E*TRADE’s web-based platform is incredibly advanced and a breeze to use, as is their mobile app. However, you have to pay for these features because E*TRADE is just as pricey as TD Ameritrade and requires a $500 deposit to open an account (TD Ameritrade is free). Reasons to Sign Up. Reasons to Avoid.

E*TRADE Costs and Fees. Mutual Funds Fee (Load): Varies by fund. 5 Reasons to Sign Up for E*TRADE. The Best Mobile Trading App. E*TRADE’s mobile app is a level above the others on the market. It’s honestly hard to tell the difference between the app and the standard trading platform you would access on a computer. That’s saying a lot because the web-based platform is also one of the best. You get access to CNBC videos, real-time quotes, live market news, and more. You can also conveniently deposit checks directly into your trading account. Online Trader Community. One of the standout features E*TRADE offers is a trader community that enables you to chat with other traders. This is beneficial because you can gauge how others are reacting to the market, see the opinions of other traders, and see how actively traded certain stocks are.

It’s a cool element that adds a little something extra, and you won’t find it offered elsewhere. Another quick tip: It’s a good idea to follow market sentiment and do the opposite of what other traders are doing, not follow the crowd. If everyone is doing the same thing, the likelihood of a big group of people caught in the same trading position is high. That means when the market turns, everyone is trying to get out of their position and you’re the one taking the other side of the trade so you can capitalize on everyone else’s mistake. Access to Every Investment Product. It’s rare for any of the best online stock trading brokers to provide access to every investment opportunity, but E*TRADE has no limitations. In addition to the standard of stocks and options, you’ll have access to bonds, mutual funds, ETFs, forex, futures, pink sheet stocks, and international markets. E*TRADE is a smart choice for people who want to diversify their investment portfolio and for those who have some market experience. Outstanding Financial Tools. With an E*TRADE account, you’ll have access to a debit card and unlimited free ATM refunds at any bank or ATM across the country. E*TRADE used to offer a credit card, but it was discontinued in late 2013. (If you’re looking for a great credit card, check out my post on the best rewards credit cards.) E*TRADE offers a variety of savings plans for all walks of life, including college savings plans, IRAs, retirement planning, and small-business tools.

Superb Web-Based Platform. E*TRADE has something called E*TRADE 360, which enables you to view everything in your account on one page and take action by making trades. It’s one of the few web-based platforms where you have everything you need on one screen. If you don’t like the default layout, you can drag and drop the various components to arrange the home screen to your liking. Page elements can be added and deleted as you wish. The ease and simplicity of making a trade from the same screen where you’re conducting your research can’t be understated. With some brokers, placing a trade takes two to three clicks just to get to the right area. 2 Reasons to Avoid E*TRADE. I think it’s especially important for new traders to be able to practice trading real markets without investing any money. One major downfall of E*TRADE is that they don’t offer virtual trading on their web platform or on their mobile app. So, you can’t test out E*TRADE’s tools prior to opening an account, and you also can’t test your own strategies with fake money even if you have an account.

Like TD Ameritrade, E*TRADE will cost you a bit more than the other top online brokerages. Also like TD Ameritrade, you get what you pay for. If you don’t trade frequently, the $6.95 fee per stock or options trade might be worth it for all the resources you have access to. Not that all of us have $10,000 lying around, but if you deposit that much into your new E*TRADE account, they’ll let you trade for free for 60 days. I had to be aware that comparing a full-service broker to a discount broker or options broker was going to be difficult. I didn’t want to penalize companies for specializing, but I also needed to reward the full-service firms for offering additional resources. I came up with 10 important categories of features to measure each company. Some of these features included costs and fees, access to investment products, research, education, trading technology, and financial resources. I compared each of the 15 online brokers across these features. Once this comparison was complete, I was left with four of the best online brokers that excelled in specific areas. These four online brokerage firms cover the spectrum for anyone who would sign up for an investment account. I knew I could recommend one of them to a specific group of investors or traders. Here are the final steps I took: I tested out each of the top four brokers (I actually tested several in the top 15) and simulated the trading experience.

I analyzed the unmeasurable aspects of each broker that the data could not account for, like usability and functionality, and downloaded all the mobile apps. I looked for additional features unique to each online broker that I also did not capture in the data. Investment Calculator. To help you determine what to expect from your investment, we’ve created this investment calculator. Simply enter your investment details and our calculator will let you know if your goals are achievable and if it’s not, how far you are from it. A Valuable Lesson at 14. When I was 13, I had about $1,000 worth of stock in a company called Superconductor Technologies, Inc. The company still exists today and trades under the ticker SCON. This was the time of the first technology boom from 1999-2000. By the time I was 14, my $1,000 worth of SCON (I purchased 50 shares at $20share) was sitting at $480share and worth $24,000. The stock eventually went up to nearly double that and then crashed with the rest of the tech market. Being 14 years old and thinking this stock was going to go up forever, I rode the wave up and all the way back down — down to nothing. Check out the chart of SCON below and feel my pain. You can see that the stock took two major spikes up and crashes back down (I was involved in the first one). Today, the company trades for under $3share. I tell this story because I learned three great lessons about stock trading: Stay disciplined Have a plan Entries AND exits matter.

Some people liken online stock trading to gambling (this can be true if you have no clue what you’re doing), but it’s really all about risk and reward. Staying disciplined can keep you from losing money and ensure you lock in your gains. By discipline, I mean picking your prices — where you get in and get out ahead of time — and sticking to them. Always risk less on the downside than you’re willing to make on the upside. The good news about many of the best online brokerage accounts is that you can start by trading virtually before you risk your money. You can practice strategies and track your gains and losses without having to invest a dime using the same software the broker offers for real money. By applying what you learn and maintaining discipline, you have the potential to earn a decent side income if you’re willing to invest the time. Becoming a Day Trader. I’ve been told several times that “trading is the hardest way to make an easy living.” That’s the truth. The best traders in the world are extremely disciplined and always on top of the latest research and trends in the market. I worked with several of these people and witnessed it firsthand on a daily basis. I spent just under three years trading S&P futures, oil markets, foreign currencies, and other markets as an employee of a day-trading firm. The same principles I learned from making that big $24,000 mistake in my teens carried over to that job.

The amount of money I would make on my biggest winning days was significantly more in comparison to the amount I would lose on my worst losing days. I’m telling you all of this because I don’t want you to sign up for one of the online brokers I’m recommending and lose a bunch of your money. If you’re interested in trading, I want you to find a way to build a substantial income on the side and grow your money slowly. I eventually quit trading because it wasn’t my calling. Once I figured out what I wanted to do with my career, enduring the daily stress of watching money come and go just wasn’t worth the massive upside. However, I can say with confidence that trading was the greatest education I’ve ever received. Now, I’m able to leverage my trading experience and knowledge of online trading to thoroughly review each of the best online brokers to help you set up the right account. The experience was well worth it. Recap: Best Online Brokerages. My recommendation to most of you is to open an account with a full-service broker. There are different scenarios in which you should choose each of these brokers I reviewed. You should sign up with Scottrade if you put a high value on getting help, but you don’t want to pay $9.99 per trade. If you’re a new trader looking to advance up the ranks and absorb knowledge but still want to make trades on one of the best trading platforms around, try TD Ameritrade. If you’re simply looking to make cheap stock and options trades, open an account with Optionshouse.

For those of you who want access to every investment product and a great mobile trading platform, go with E*TRADE. I also wrote about the best IRA accounts where I explain the differences between traditional and Roth IRAs so you can see what your best options are. Edited by: Sarah Ban, Michael Gardon, Christine Neilson. Research by: Mike Jelinek, Michael Gardon. Leave a Reply Cancel reply. Just sign up to The Simple Dollar Daily and start saving today.