New and experienced traders alike should always be on the prowl for good, better, and the best online stock brokers to trade with. The best brokers aren’t always the cheapest though, as this list will exploit. Just because you can get cheap trades doesn’t mean you are going to have the tools necessary to trade successfully.
(stats pulled from online brokers)
1. TD Ameritrade
TD Ameritrade is my favorite only be default since I have used them for several years. What you need to know about TD Ameritrade in a nut shell is this:
- Flat-rate $9.99 commissions
- 13,000+ mutual funds
- Apex which I will explain more below
- Award Winning Customer Service
I have used their Apex service (which is their elite traders account type) for a few years now and it has been nothing short of amazing. You get all of your service fees wiped which means everything that other brokers charge ya with for regarding your account are free with Apex. You also get hooked up on the research side as you get more of their services for free. Streamer, level II quotes, advanced analyzer, etc. Top it off with award winning customer service and you got a grand package. They also bought out TD Waterhouse last year (Vice the TD now in front of Ameritrade). They were voted #1 by Barron’s for the 2007 review of online brokers, have over 6 million clients, and are publicly traded under the stock symbol AMTD.
(Side note: I get $5 flat fee trades with them now as well, if you want to know how read my review of TD Ameritrade Izone)
2. Scottrade
Scottrade is well known for their customer service, which is represented by the who knows how many awards they have won. They boast 290 local branch offices in the United States, and also have flat-rate commissions of $7 per trade. The main points:
- Flat-rate $7 Trades
- Only $500 to Open an Account
- Outstanding Customer Service
- Solid Research Tools
When I am helping people choose an online broker, the only thing I do not like about Scottrade is their speed at which they process your trades. I almost made a youtube video on it once just because it got so frustrating, and it is a simple fix for them too, upgrade your servers!! Their site is slllloooowwwwww! Now, perhaps things have changed since two months ago, but enough was enough for me. If you are a daytrader this will drive you nuts.
On the positive side though, their Scottrade Elite service is pretty cool, and a valuable asset for any experience trader. Scottrade is not publicly traded, and is a privately held corporation. Their customer service is outstanding, they have a China division, and they are definitely a top player in the online broker market with their few million plus customers.
3. Etrade
Etrade is another online broker ranked in the elite. Last I checked they have over 4.3 million clients which I am sure continues to climb steadily each day, and you can trade for as low as $6.99 depending on your account. The main deal with Etrade is they are one of the big brokers leading the way into the home mortgages business, offering checking accounts, credit cards, and the works. Etrade highlights include:
- 24/7 Help with everything from phone to professional investment guidance
- 7,000 mutual funds with low commissions
- Low rates on mortgages, home equity, and margin loans
- Nearly $180 Billion in customer assets
- International
I recall the recent push by the big three online brokers for account security, Etrade lead this as well. When it comes to protecting your assets while they sit in your trading account, encryption keys were 2nd hand to what Etrade offered. Overall Etrade is another solid broker with a lot to offer, and they have definitely earned every bit of positive feedback they have received over the years since going public in 1996 under symbol ETFC.
4. ShareBuilder
ShareBuilder leads the industry when it comes to automatic investing plans. Most people know ShareBuilder by their $4 commissions on trading, but don’t be caught up in the hype, there is a catch. To take advantage of the $4, you need to be on one of their automatic investing plans. They have done a great job though of catering to this market and house some good features:
- Retirement Accounts
- Automatic Investing Plans
- Research Tools to explore stocks and ETFs
Now, I can’t say personally what I really think about their services as I have not held an account yet with ShareBuilder, but for those that I have spoken to, they were content overall. If you aren’t in the game though for automatic investing plans are a bit more serious then you won’t find me recommending you to these guys. ShareBuilder is more hands off than the other brokers.
5. OptionsXpress
The last of the brokers covered in this list is OptionsXpress. These guys also have automatic investing plans available for their clients, and with OptionsXpress you can actually buy partial shares. Their low commissions have no hidden fees unlike ShareBuilder, and can be highlighted by:
- Tools including streaming quotes, real-time charting, strategy scan, and the dragon
- 5 minute account setup (though I think you can accomplish this elsewhere fairly easily)
- Financial Liability backed by $500,000 account protection
- Account Security
Now, a lot of this is really mumbo jumbo when comparing to the brokers above. Account security, research tools, account setup, etc. are all 2nd hand to most of the above brokers. I know that OptionsXpress has international offices which is pretty cool, and I would imagine they would be good for trading, well, options naturally. Beyond this information I cannot say whether or not these guys are any good, but they definitely have a massive marketing budget, so I am assuming they are doing something right.
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