Which is the Best Stock Brokerage?
So you’re looking for the best stock brokerage for your style… Suretrader vs Interactive Brokers. Interactive Brokers vs Thinkorswim. Thinkorswim vs Etrade. Well, it all depends. Each has their value, as well as their pro’s and con’s. Bottom line, you can’t even start trading if you don’t have an account with a brokerage. Choosing a brokerage requires a lot of contemplation, and not all brokerages are the right fit for all traders. This one’s a doozy, so strap in, we’re going to go through a lot.
Below, I’ve compiled a list of the best brokers for most situations in every day trading, from the brokerages with the best platforms and charting tools, to the best brokers for short selling. Please note the date this was written, in to addition to understanding that these are based on my own experiences. If I’ve missed an area of concern, please feel free to comment below the article and I’ll gladly review and update.
Best Platform for Technical Analysis & Charts
To make successful trades online, many traders depend solely on their trading platform, and technical analysis (otherwise known as “chart trading“.) The trading platforms that are available today are not only desktop-based, but are becoming mobile-based so you can literally trade from your cell phone or tablet. Charts that are highly advanced, tools for options, built-in screeners, ladders, virtual trading, hot keys, back-testing, watch lists, and real-time Level II quotes are just a few examples of the tools brokerages are now making available to clients.
TD Ameritrade is the only brokerage that I feel offers great chart tools. Personally, I prefer Tradingview, while executing trades through your current brokerage. Tradingview, by far and away, is the best technical analysis platform a trader can add to their arsenal of tools. With the cleanest displays, countless tools and indicators, social interaction for sharing trading ideas, and a list of other benefits, Tradingview takes the win here.
Best Stock Brokerage for Small Accounts
Ah… if I only knew then what I know I now. Am I right? There is no reason to list any more than one. Hands down, it goes without saying, SureTrader is the best fit for anyone wanting to trade frequently, that can’t afford to just cough up 25K to do it. Unlimited day trades with only $500 in your account? Damn right you can. SureTrader dominates this area simply for the fact that it is one of the great ways to avoid the Pattern Day Trading Rule. Suretrader is able to provide a trading experience free of the PDT rule due to the fact that they are based off shores, and are not subject to the same rules as other brokers under the SEC.
Best Stock Brokerage for New Traders
TradeStation offers a “University” that allows you to learn the basics of trading at your own pace. Their customer service team is great, and they offer one of the most detailed and customizable platforms out there. Interactive Brokers is also top of the list here, as they off both an “Education Center” and a “Trader’s University.” The last on the list would be ThinkorSwim by TD Ameritrade, for its plethora of educational and video resources, in addition to offering webinars and classes you can register for.
Best Stock Brokerage for OTC and Sub-Penny Trades
Centerpoint takes the cake for this category. Centerpoint offers the best OTC fills despite its fees, basically because their NITE route will usually offer the best option out there for OTC fills. Centerpoint also offers CSTI, ATDF, CDEL, ARCA, in addition to a few others.
As for sub-penny stocks –
If you’re into trading sub-penny securities or anything less than maybe $.50 a share, you may want to consider a brokerage that won’t bend you over with commissions and fees for trading securities so low. Etrade doesn’t charge fees or commissions on a per-share basis, which can help a lot in keeping costs per trade reasonable. Brokerages like Centerpoint and Suretrader have commission fees per-share, which can add up really fast on stocks that you’ll need to trade large qualities of shares on to profit. Interactive Brokers is an honorable mention due to their commissions being .005/share OR 0.5% of the total trade value, whichever option is the cheapest. Both of the above mentioned are cheaper than Centerpoint and Suretrader for really cheap stocks.
Best Stock Brokerage for Short Selling Stocks
Most brokerages out there won’t even lend shares of penny stocks, but these are a few that do. In order to find locates on a lot of stocks, these three are the best brokerages available. Centerpoint probably offers the best borrows for penny stocks, while SureTrader offers the best with stocks over $1. IB has some good borrows as well, but requires a 10K deposit to open an account.
Best Stock Brokerage for Retirement Services
Scottrade is a great option for your IRA. One unique thing about Scottrade is their “Flexible Reinvestment Program.” This program allows you to reinvest dividends from ETFs or stocks into other eligible ETFs or stocks without paying commissions. Essentially, you collect your dividends and put them back to work for you immediately, at zero cost. Scottrade also offers up to $1,000 cash when you open a new account (depending on how much you fund the account with).
Another good option is OptionsHouse, which offers one of the lowest fee structures you will come across, and is one of the few brokerages I know of that allow trading options within an IRA account.
Best Stock Brokerage for Forex Trading
TradeStation has been a forex brokerage since the early 90’s, and allows you to begin with “TradeStation Basics”, and lets you learn at your own pace. You can also reach out to TradeStation Labs, Events, and University. ThinkorSwim also offers similar services within their platform like a rookie-learning curriculum that offers courses and videos. The Learning Center within the platform consists of videos, tutorials, thinkManual, thinkMoney magazine, and Quiz Central. FXCM makes the cut because they offer daily walk-throughs of their platform along with strategy sessions, a library of tools and trading guides, and a calendar of events that can teach you how to read quotes and place trades.
Best Stock Brokerage for Options Trading
Strategy Roller from Thinkorswim allows clients to create custom rules and roll their existing options positions automatically. The number of settings and depth of customization available is impressive. Thanks to joining forces with TradeMONSTER in 2014, OptionsHouse not only offers highly competitive options commissions, but also a fantastic platform. Options trades are a flat $4.95 + $.50 per contract. Platform wise, OptionsHouse’s web-based platform offers all the tools an options trader could want and displays them in magnificent form. Attention to detail, like automatic alongside custom spreads groupings, effortless scanning through strategySEEK, and easy-to-understand risk/reward data through tradeLAB, make OptionsHouse unique. Not to be outdone, TradeStation’s OptionsStation tool makes analyzing potential trades a breeze, and even goes as far as including 3D P&L charts. Investors note, however: Popcorn and 3D glasses are not required, and while visually appealing, I don’t really see any distinct advantage over the traditional 2D P&L chart.
I hope this helps those that are in search of a new brokerage. Again, not all brokerages are a good fit for all traders. We all have different tendencies when we trade, you just need to find what works well for you. So the next time you weigh out “thinkorswim vs etrade” or “interactive brokers vs thinkorswim,” consider all aspects before you commit. Many factors above can influence a decision had you known the information prior to the fact.
Again, if I missed an area of concern or a specific brokerage that you feel is a better fit for any of the above, please leave a comment or email me at [email protected] and I will gladly review and update.