Pimp My Trade

Top 5 Best Discount Brokers for Your Money

Posted on February 12, 2009 by Adam

Whether you are new to trading or a battle hardened mega-trader, you need a broker that works for you, not the other way around. And I don’t mean one of those full service brokers - that’s for the birds. I’m talking about a quality broker with low commissions and great software. In this day and age, discount brokers don’t have to be bad. In fact, it doesn’t make sense to pay more than $5 for most trades, bar none. And, you can get low commissions without compromising service or quality products.

Save your money without sacrifice with these awesome discount brokerages! This list below are my 5 favorite discount brokers. Enjoy!

1. Thinkorswim – This is by far my favorite online broker, which is why I use them for all of my trading. The commissions are low. I pay $5 per stock trade and $2.95 per option contract. Covering shorts is free. What takes the cake is the incredible software Thinkorswim offers. They have a web-based platform, a desktop platform, and even a mobile trading platform, all with excellent charting and free real-time data! It can’t be beat in my mind. They also have top-knotch analytics to help you make sense of complicated risk profiles. My criticisms would be that sometimes the charting software is slow, especially on high volume. They also have some issues with inventory with short-selling. A lot of stocks are hard to borrow.
2. Interactive Brokers – My favorite thing about interactive brokers is their super low commissions. You can trade stock, options, forex, and futures for fractions of what other brokers would charge. Like Thinkorswim, Interactive Brokers offers several flavors of trading software. However, the software is so-so, and market data is not free. One perk is their direct access order entry system, which allows you to enter orders directly to market makers, keeping commissions low low low.
3. Bank of America Investment Services – I used to use them a long time ago, but I stopped because they wanted to charge me $10 a trade. Not only that, but the software was nonexistent and the web interface was horrible. Now I hear that their trades are free! The catch? The software still bites, you only get delayed quotes, and you need a checking account with them first. But did I say the trades are free? Free trades!
4. Sogotrade – Sogotrade offers $3 stock trades. Only stock trading is available, but account minimums are low and there is a decent web platform with free real time data. Sogotrade may be a good broker for beginners, especially if you have never traded before, as they can offer broker assistance for a higher commission.
5. Options House – Stock trades for $2.95, even if broker assisted. Option trades are $9.95 for unlimited contracts, or $14.95 for unlimited spreads, so it may be best if you trade lots of contracts. The platform is nice and web 2.0, and a simple, intuitive option chain makes spread trading easy.