Compare Online Brokers

RankNameCommissionsRatingMore Info
1OptionsHouseStocks: $3.95
Options: $8.50 + $0.15/contract
4.904.904.904.904.90
2Trade MonsterStocks: $7.50
Options: $0.00 + $0.50/contract
4.503.834.504.54.50
4ScottradeStocks: $7.00
Options: $7.00 + $1.25/contract
4.254.254.254.254.25
3OptionsXpressStock: $9.95
Options: $14.95 flat (First 10) then + $1.50/contract
4.214.214.214.214.21
5SogotradeStock: $3.00
Options: $5.00 + $0.65/contract
4.174.174.174.174.17

Choosing an Online Broker

Ready to invest? The first step is picking the right online broker. With the huge advances made in computer and Internet technology, it is now possible for everyone to cheaply and effectively manage their own investments. Gone are the days when an investor had to rely on mutual funds, or broker managed accounts with large service fees. Today there are dozens of ‘discount’ brokers that allow individuals to trade stocks, ETFs, Options, Bonds, Futures, and Foreign Currency in real-time. Since investment moves are made by the individual customer, these brokers can charge low commission fees. Self directed investing means you won’t pay large management fees to professionals, but this strategy can carry its own risks. That’s why its important to be well educated and do plenty of research before choosing investments. The first and perhaps most important choice you’ll have to make is which broker to open an account with. Online Brokers Hub is here to help you make that initial decision.

Commission Fees

One of the most important features to consider when comparing brokers is the commission fee, or pricing structure. Commissions are the fee investors pay their broker for facilitating a trade. Today, most trades are completed by computers which means the cost of concluding a trade are much lower than previous decades. Price competition is fierce among online brokers, but some of the biggest brokers haven’t lowered their fees for years. That means many well known brands like ETrade, TDAmeritrade, and ShareBuilder charge commissions of $10.00 per stock trade while newer, smaller brokers like OptionsHouse charge as little as $2.95. Commissions vary dramatically based on what kind of financial instrument you’re trading. Options trading is growing in popularity, and the commission fees charged by the various online brokers can vary greatly when it comes to options. When dealing with options, there’s no fixed price. Instead, traders pay a per-contract fee. The difference can be substantial. Some online brokers charge up to $1.50 per contract while others charge as little as $0.15 per contract. When trading hundreds or thousands of cheap contracts, the commission could end up being greater than the sum paid for the options if you picked the wrong broker!

Features and Reliability

The cheapest broker isn’t always the best. There are other points to consider when picking a broker. Aggressive, heavy traders will want to aim for the lowest commissions, but others may prefer a different approach. Many of the deepest discount brokers are geared towards day traders while some of the bigger ones offer a larger range of financial services. A big financial company like Fidelity can offer brokerage services along with online banking, card cards, college savings, retirement savings accounts, annuities, and managed accounts. For the hands-off, long term investor, an online broker like Fidelity, or Charles Schwab with a larger selection of services may be a good fit despite the higher commission fees.

Niche Markets

All online brokers offer stock and options trading, but advanced traders looking to trade commodity futures or foreign currencies (Forex) will have to pick a broker that supports these instruments. Trade King supports Futures trading with TDAmeritrade offers both Forex and Futures trading. Investors with more particular interests can compare a number of other features using Online Brokers Hub. For example, many brokers charge widely different rates for bond trades, and mutual funds. Those looking to diversity beyond companies listed on American stock exchanges may want to consider ETrade which supports Global Trading. Look around and use the resources available on this site to decide which broker is best for your needs. Many brokers have promotions where new customers are rewarded with cash or certain number of commission fee trades if their initial deposit meets certain criteria. Be sure to take advantage of these offers, and know that transferring brokers is relatively painless. Try out several and see which fits you best!