Choosing an Online Stock Broker

Sep 25, 2011
J. Webster
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So you’re ready to start trading stocks on your own. You want to create and manage your own portfolio. As Cramer might say, you want to be a home gamer. Well, you’ll need to find an online broker where you can put your money and begin buying stocks.

Perhaps the biggest factor in choosing a broker is how much will it cost to make a trade. For the most part, trade commission fees can range from $4 to $10 per trade. You’ll want to weigh in how much trading you’ll do, whether you want to be a day trader or make a few trades a month, or go like gang busters and trade in and out of stocks throughout the trading day. There are balance requirements too, if you want to day trade then you’ll need to keep a certain amount of money in your account at all times. At TD Ameritrade for example you have to have $25,000 in your account if you want to day trade. Let’s look at some of the most popular online brokers and their trading fees.

Charles Schwab – When you think of Charles Schwab you probably think of the phrase: Talk to Chuck? And you probably think of old men counting their pennies as they wait for retirement. Yes, Schwab is the old man’s broker. Online equity trades cost $8.95.
FirstTrade – Yeah, it’s not a very well known broker. I had never heard of it. However, you get 250 commission free trades when you open a new Firstrade account.
Scottrade – This is an up and comer as they say, and they’re offering a pretty cheap price for online stock trades, just $7 per trade.
TD Ameritrade – This is the biggest broker online, and maybe the most reliable, but they’re on the higher end of the trade costs, at $9.99 per online equity order but they are offering a new account promotion where you can trade free for 60 days.
Fidelity – This is another of those old man brokers that’s been around forever. Trades cost $7.95 per trade.
ETrade Yeah, they have that baby in those commercials, so that’s why you should use them. If you make over 150 trades then each trade costs $7.99, under 150 trades then they cost $9.99.
TradeKing – Perhaps the cheapest of the bunch, with trades costing just $4.95.
Zecco – Actually, Zecco also offers one of the cheapest per trade prices, at $4.95 per stock trade. Plus, they tout their ‘revolutionary investing community’ where you can see what the top performing traders in the community are trading.
ING Direct – ING is best know for their savings account, which actually gives you a decent yield for your money, but they’ve moved into the online broker arena, and will give you a $50 bonus if you setup an account and trades only cost $4 – there has to be some catch to this, perhaps only $4 trades for a period of time.

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