Trade 24 an Online Broker in a League of Their Own

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Choice!
    Free Trading Education!
    Free Demo Account!
    Big Sign-Up Bonus!

  • Binomo
    Binomo

    Good Choice For Experienced Traders!!!

Best Online Brokers

Find and compare the best online trading platforms for every kind of investor

With so many different types of online stock brokers available to investors, it can be tough to choose one that works best for you. That’s why we put these U.S.-based online brokers through a comprehensive review process that included hands-on research to determine the best in the industry.

When we started our 2020 online broker reviews six months ago, no one knew how the world would change. We recognize that we all are living through a particularly volatile time as we deal with this global crisis, and financial markets have also seen unprecedented change, impacting all investors. Our analysis of the online brokerage industry is, “Commission Cuts, Consolidation, and a Coronavirus Crash.”

Our mission has always been to help people make the most informed decisions about how, when and where to invest. Given recent market volatility, and the changes in the online brokerage industry, we are more committed than ever to providing our readers with unbiased and expert reviews of the top investing platforms for investors of all levels, for every kind of market.

Best Online Brokers and Trading Platforms for April 2020:

  • Fidelity Investments: Best Online Broker
  • TD Ameritrade: Best Broker for Beginners
  • tastyworks: Best Broker for Options
  • Interactive Brokers: Best Broker for Advanced Traders
  • TD Ameritrade: Best Broker for Mobile
  • Interactive Brokers: Best Broker for International Trading
  • tastyworks: Best Broker for Low Costs
  • Charles Schwab: Best Broker for ETFs

Best Overall: Fidelity Investments

  • Account Minimum: $0
  • Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade

Fidelity earned our top spot for the second year running by offering clients a well-rounded package of investing tools and excellent order executions. It has continued to quietly enhance key pieces of its mobile-responsive website while committing itself to lowering the cost of investing for its clients. Fidelity joined in the rush to cut equity and base options commissions to zero in October 2020 but remains devoted to offering top-quality research and education offerings to its clients. The firm also makes it easy for clients to earn interest by sweeping uninvested cash into a money market fund. Fidelity also shares the revenue it generates from its stock loan program, and allows clients to choose which stocks in their portfolios can be loaned out.

Fidelity provides excellent trade executions for investors. On average, over 96% of orders for Fidelity customers are executed at a price better than the national best bid or offer.

Fidelity offers a wealth of research and extensive pre-set and customizable asset screeners.

Your uninvested cash is automatically swept into a money market fund to help contribute to overall portfolio returns.

Some traders and sophisticated investors may have to use Fidelity’s web platform in addition to Active Trader Pro to access all the tools and research they require.

Non-U.S. citizens or residents cannot open an account.

Traders and investors must manually refresh the data when using the website.

Fidelity has a wide offering of securities, but no commodities or options on futures.

Best for Beginners: TD Ameritrade

  • Account Minimum: $0
  • Fees: Free stock, ETF, and per-leg options trading commissions in the U.S., as of October 3rd, 2020. $0.65 per options contract.

Financial markets can be intimidating the first time you try to put your money to work, so it helps to have an online broker that understands that and puts in an effort to help. To determine the best broker for beginners, we focused on the features that help new investors learn as they are starting their investing journey. Brokers were selected based on top-notch educational resources, easy navigation, clear commission and pricing structures, and the overall quality of their portfolio construction tools. We also looked for low minimum account balances, as these can be a barrier for new investors with limited capital. Finally, we put an emphasis on the availability of demo accounts so new investors can practice using the platform and placing trades.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Choice!
    Free Trading Education!
    Free Demo Account!
    Big Sign-Up Bonus!

  • Binomo
    Binomo

    Good Choice For Experienced Traders!!!

TD Ameritrade, one of the largest online brokers, has made significant efforts to market itself to beginner investors through social media. Work is still being done to further streamline its web and mobile experiences and make them more accessible to new users, but the resources new investors can already access are exceptional. Education is a key component of TD Ameritrade’s offerings. You’ll find expanded learning pathways, ranging from beginner to advanced, to help clients understand everything from basic investing concepts to extremely advanced derivatives strategies. You can open an account and poke around without making a deposit, and take advantage of all the learning opportunities until you’re comfortable. TD Ameritrade wants new investors to become more confident, and to trade additional asset classes as their skills grow.

The education offerings are designed to make novice investors more comfortable.

TD Ameritrade offers in-person education at more than 280 offices as well as multiple training pathways available on its website and mobile apps.

The TD Ameritrade Network offers nine hours of live programming in addition to on-demand content, viewable on mobile devices.

The well-designed mobile apps are intended to give customers a simple one-page experience.

Some investors may have to use multiple platforms to utilize preferred tools.

TD Ameritrade offers one of the widest selections of account types, so new investors may be unsure of which account type to choose when opening an account. More support is needed to ensure customers are starting out with the correct account type.

Investors are paid a tiny rate of interest on uninvested cash (0.01-0.05%) unless they take action to move cash into money market funds.

Best for Options: tastyworks

  • AccountMinimum: $0
  • Fees: $0.00 stock trades, $1.00 to open options trades $0.00 to close

Options trading has become extremely popular with retail investors since the turn of the 21st century. Our best options brokers have a wealth of tools that help you measure and manage risk as you determine which trades to place. They also include valuable education that helps you grow in sophistication as an options trader.

The commission structure for options trades tends to be more complicated than its equivalent for stock trades. Until the commission cuts that swept the industry in the fall of 2020, most brokers charged a fee for each leg of an options spread, plus a commission per contract being traded. The per-leg fees, which made 2- and 4-legged spreads expensive, have been eliminated for the most part. We are seeing some brokers place caps on commissions charged for certain trading scenarios.

Investors with fairly large portfolios can take advantage of portfolio margining at certain brokers, a practice that assesses the total risk inherent in a portfolio that contains stocks and derivatives, and can reduce the size of your margin loan.

Tastyworks officers say that more than 90% of the trades placed by their customers are derivatives, so there are a lot of tools for options and futures traders. Everything is designed to help the trader evaluate volatility and the probability of profit. It’s all about making decisions and taking action. Executions are fast and the costs are low, capping commissions for opening orders for options on equities and futures at $10 per leg. As you build a position from a chart or from a volatility screener, a trade ticket is populated for you. There’s a video viewer embedded so you can keep an eye on the tastytrade network. Though a newcomer to options trading might be initially uncomfortable, those who understand the basic concepts will appreciate the content and features.

All of the tools you’ll need for analyzing and trading derivatives are built into the tastyworks platform.

The charting capabilities are uniquely tuned for the options trader. If you have multiple positions on a particular underlying, you can analyze the risk profiles of the combined position.

There are hours of original video from tastytrade every weekday, offering up-to-the-minute trading ideas, plus a huge library of pre-recorded videos and shows.

Newcomers to trading and investing may be overwhelmed by the platform at first. There’s a learning curve to climb.

There is no fixed income trading (outside of ETFs that contain bonds) for those who want to allocate some of their assets to a more conservative asset class.

Besides profit and loss, any additional portfolio analysis requires setting up a login on a separate site, The Quiet Foundation, which is also part of the tastytrade empire.

Best for Advanced Traders: Interactive Brokers

  • Account Minimum: $0
  • Fees: Maximum $0.005 per share for Pro platform or 1% of trade value, $0 for IBKR Lite

Advanced traders need fast, high quality executions, reliable data, sophisticated order types, and access to the asset classes they want to trade. We also looked for portfolio margining and top-notch portfolio analysis.

Interactive Brokers (IBKR) earns this award due to its wealth of tools for sophisticated investors and its wide pool of assets and markets. The firm makes a point of connecting to as many electronic exchanges as possible. You can trade equities, options, and futures around the world and around the clock. Interactive Brokers’ order execution engine stays on top of changes in market conditions to re-route all or parts of your order to achieve optimal execution, attain price improvement, and maximize any possible rebate. The order routing algorithms seek out a speedy execution and can access hidden institutional order flows (dark pools) to execute large block orders. The wide array of order types include a variety of algorithms as well as conditional orders such as one-cancels-another and one-triggers-another. You can also set up conditional orders based on price, volume, daily P&L, margin cushion, number of shortable shares available, rebate available from the trading venue, and other factors.

IBKR’s order execution engine has what could be the smartest order router in the business.

Interactive Brokers connects clients to 125 markets in 31 countries and enables clients to trade stocks, options, futures, forex, bonds and funds from a single integrated account.

Algorithmic order types include VWAP (volume-weighted average price) and TWAP (time-weighted average price) as well as order types designed to minimize the trader’s impact on the price of a particular stock.

You can only have streaming data on one device at a time. This could be an issue for traders with a multi-device workflow.

The most advanced capabilities are restricted to IBKR Pro clients and trades on that plan are not commission free.

Best for Mobile: TD Ameritrade

  • Account Minimum: $0
  • Fees: Free stock, ETF, and per-leg options trading commissions in the U.S., as of October 3rd, 2020. $0.65 per options contract.

Over the last few years, online brokers have increasingly adopted the mantra “mobile-first.” As more investors and traders use tablets or smartphones as their primary platform, online brokers have made efforts to improve their mobile apps.

Streaming data has made its way to mobile apps along with complex options analysis and trading, advanced charting, and educational offerings. With the availability of computers in our pockets, the way people interact with their trading and investment accounts have forced brokers to offer mobile apps along with their traditional desktop platforms.

TD Ameritrade focused its 2020 development efforts on its most active clients, who are mobile-first – and in many cases, mobile-only. TD Ameritrade’s thinkorswim mobile platform has extensive features for active traders and investors alike. The workflow for options, stocks, and futures is intuitive and powerful. You’ll find lots of bells and whistles that make the mobile app a complete solution for most trading purposes, including streaming real-time data and the ability to trade from charts. The regular mobile platform is almost identical in features to the website, so it’s an easy transition. TD Ameritrade clients can trade all asset classes offered by the firm on the mobile apps.

TD Ameritrade optimized its traditional website for mobile browsers with a dashboard where clients can quickly access account details, balances, balance history, positions, news, and more.

The well-designed mobile apps are intended to give customers a simple one-page experience where they can quickly check in on the markets and their account.

The TD Ameritrade Network offers nine hours of live programming in addition to on-demand content, viewable on mobile devices.

Streaming real-time data on thinkorswim’s mobile app is unlimited.

Customers may have to use multiple platforms to utilize preferred tools. Options-specific tools abound on thinkorswim and its associated mobile app, but fundamental research for equities and fixed income tools are mostly available only on the website.

Over-the-counter (penny stock) trades are subject to a commission of $6.95 per trade.

Clients are paid a tiny rate of interest on uninvested cash (0.01-0.05%) unless they take action to move cash into money market funds.

Best for International Trading: Interactive Brokers

  • Account Minimum: $0
  • Fees: Maximum $0.005 per share for Pro platform or 1% of trade value, $0 for IBKR Lite

For the international trading category, category weightings for the range of offerings were adjusted upwards to measure which broker offered the largest selection of assets across international markets. After that, overall platform functionality and variety of orders types were also measured as these are important to successful trading when undertaking position management in markets that span the globe. These adjustments revealed a clear winner for international trading in the 2020 review.

Interactive Brokers is the best broker for international trading by a significant margin. Interactive Brokers allows investors to access 125 exchanges in 31 countries across the globe. This reach is combined with a massive inventory of assets and 60 different order types to plan your entry and exit from a position. Investors can also fund their account in their domestic currency and IBKR will handle the conversion at market rates when you want to buy assets denominated in a non-domestic currency. And, if all that were not enough, the quality of trading tools available through Traders Workstation (TWS) make it easy to execute multi-layered trades across international borders. Interactive Brokers has won this category two years running, and there is no sign of that changing in the near future.

No broker can match Interactive Brokers in terms of asset inventory or international markets.

If an exchange enables a particular order type, IBKR offers it you. For example, very specific limit-on-close orders on the Tokyo Stock Exchange and pegged-to-primary orders on the London Stock Exchange.

You can trade non-U.S. dollar assets on margin without having to have the local currency in your account.

Most non-U.S. exchanges charge additional data fees that increase your trading costs.

All non-U.S. transactions incur trading commissions, some of which are not completely transparent.

Small or inactive accounts may be subject to maintenance fees or data charges, and interest is not paid on cash unless you have a substantial balance.

5 Best Online Stock Brokers 2020

Posted by Blain Reinkensmeyer | Last updated on Mar 17th, 2020 | Published Apr 28th, 2020

Investors should know the best online brokers to trade stocks with. Some online stock brokers are known for their award-winning customer service while others are known for inexpensive stock trades or powerful trading platforms. This guide will highlight some of the best brokers available today with tips and advice for choosing an online broker.

I spend hundreds of hours testing financial products and services each year. My reviews are honest and unbiased. If you use the links on this page to open an account, I may be compensated. Thank you for your support!

Here are some of the best online brokers for stock trading in 2020.

1. TD Ameritrade

Stock Trades: $0 | Minimum Deposit: $0

TD Ameritrade was ranked #1 Online Broker 2020 by StockBrokers.com*. TD Ameritrade charges $0 for regular stock and ETF trades and is best known for its trading platform, thinkorswim, alongside its outstanding learning center for beginners. Alongside #1 Overall, TD Ameritrade received top awards for its trading tools, mobile apps, research, customer service, and education. Full review.

2. TradeStation

Stock Trades: $0 | Minimum Deposit: $500
Current Offer: Commission-Free Trades on Stocks, ETFs & Options Trades

TradeStation offers the most advanced desktop trading platform in the industry and is excellent for stocks, ETFs, options, and futures trading. Meanwhile, TradeStation’s web-based platform and mobile app offer $0 stock trades and are great for casual traders. What I love most about TradeStation is the true focus on traders. Whether you are a new trader just learning the ropes, a casual trader, or an active trader who day trades or swing trades, TradeStation has you covered. Full review.

3. E*TRADE

Stock Trades: $0 | Minimum Deposit: $0
Current Offer: Get $100 when you deposit just $5,000 into a new E*TRADE account!

E*TRADE is best known for its Power E*TRADE platform for options trading, alongside its two mobile apps. The Power E*TRADE platform was rated the #1 platform for Options Trading. E*TRADE was also ranked #1 for Mobile Trading in the StockBrokers.com 2020 Review*. Like its closest competitors, E*TRADE now charges $0 per trade thanks to a broker pricing war that took place in October 2020. Full review.

4. Merrill Edge

Stock Trades: $6.95 | Minimum Deposit: $0

Merrill Edge is the online brokerage arm of Bank of America, which is open to all investors, regardless if they are a current banking customer. Alongside $0 trades, Merrill Edge offers excellent stock research (Merrill Edge was rated #1 for environmental, social, and governance “ESG” research). Also, Merrill Edge offers the best rewards program. Reward perks include credit card bonus cash back, savings interest bonuses, priority customer service, and more. My wife and I have personally been members of the program since it launched in 2020. It’s awesome. Full review.

5. Fidelity

Stock Trades: $0 | Minimum Deposit: $0

Fidelity focuses its customer experience on value. Beyond $0 trades and an ease of use website, Fidelity also finished #1 for research tools. It’s Viewpoint articles are top of class and Fidelity is the only online broker to offer 16 third-party research reports for individual equities. Full review.

Tips for Choosing an Online Brokerage

Having the best online broker to serve individual needs is very important for any investor. Consider these 12 key factors to help compare all stock brokers and ultimately find the best broker to suite your needs.

1. Trade Commissions
What does it cost to buy shares of stock? Does the fee change based on the type of order or size of order? Fortunately, today, trade commissions are essentially a “thing of the past” as the majority of brokers now offer $0 stock and ETF trades.

2. Customer Service
When picking up the phone or emailing a broker, is a well trained customer service representative ready to assist? How any investor is treated as a client is more important to some than others. But, even for those that don’t rely on customer support that often, to know that they have award winning service there when they need it is comforting.

3. Trading Tools
Trading successfully is a lot easier when investors have great tools at their disposal. A top stock broker should offer access to a wide variety of trade tools to help make the most of each and every trade. From real-time streaming quotes to last sale tickers, quality stock scanners, mobile trading apps, and level II quotes to name a few. Strong tools are essential for active investors.

4. Account Minimums
Some brokers allow you to open an account with no minimum deposit while others may require several thousand dollars. Also know that some brokers require higher minimums to gain access to premium platforms, functionality, and personalized support.

5. Market Research
A good online broker will provide a variety of market research tools. The rule of thumb here is simple: the more you pay per trade, the better the market research (both fundamental and technical) that is provided.

6. Investment Options
A online stock broker should offer access to not only trading stocks, but also a strong selection of no load mutual funds, commission free ETFs, and complex options. Other unique investment offerings to look for could include direct market routing, conditional orders, futures trading, and forex trading.

5. Other Fees
Fees beyond trade commissions include inactivity fees (common with active trading brokers such as Interactive Brokers, Lightspeed, and TradeStation) and IRA fees for having a retirement account. While most brokers do not charge predatory fees, it’s still important to do your due diligence. Just like a bank account, stock brokers also make a portion of their profits off miscellaneous fees.

8. Retirement Accounts
Funding a IRA, Roth IRA, or other retirement account with no annual fees is an extra perk many online brokers offer. There is no reason why you should pay an annual fee to have an retirement account. If managing your own portfolio is not of interest, all full-service brokers offer optional advisory services as well. Furthermore, robo-advisors are growing in popularity. Once again, the experience at larger established brokers is going to be superior to smaller brokers.

9. Banking
Larger online brokers offer banking and other financial services. This goes beyond money market accounts and CDs. Checking accounts, mortgages, debit cards, and credit cards can also be offered. The leader in this space is, hands down, Bank of America, Merrill Edge .

10. Account Security
Because of the web today, all online brokers invest heavily into account security. SSL websites (look for “https” at the beginning any URL) are used by most brokers and some are now even offering two-factor authentication (using your phone to confirm a code before logging in). Just like shopping online and choosing a trustworthy website to purchase from, the best bet is to choose a well-known, established broker for your portfolio.

11. Speed & Order Execution
For the active trader, execution speed and fill price are very important. I won’t get too in depth here but I have tested many of these brokers and there can be noticeable differences in trade execution times and quality. For the majority of investors, saving a penny per share on a 100 shares order isn’t the end of the world, but for active traders it is something to look into. To understand Order Execution, read this guide.

12. International Trading
For investors in the United States this is not a problem but for investors living outside the US, when comparing brokers it is important to make sure they offer service in your country. Here’s a good list of international brokers to start with.

Best Stock Brokers Summary

Recommended for Online Broker Trade Cost Rating
Overall TD Ameritrade $0 5 Stars
Day Trading TradeStation $0 4.5 Stars
Research Merrill Edge $0 4.5 Stars
Balanced Offering Fidelity $0 5 Stars
Options Trading E*TRADE $0 4.5 Stars
Retirement Charles Schwab $0 4.5 Stars
Banking Merrill Edge $0 4.5 Stars

Questions & Help Choosing a Broker

If you need help deciding which broker to choose or have a broker specific question please feel free to email me and I will be happy to help.

To view star ratings, summaries, screenshots, and more for these brokers, see our stock broker comparison tool.

Also, if you feel this guide was helpful for you please share it on Facebook, Twitter, Google+, or email it to a friend. This took many dozens of hours to put together so I appreciate your support!

* – The StockBrokers.com 2020 Online Broker Review included 15 brokers whom were each assessed within eight core categories: Commissions & Fees, Customer Service, Platforms & Tools, Research, Ease-of-Use, Offering of Investments, Education, and Mobile Trading.

TD Ameritrade, Inc. and Reink Media Group are separate, unaffiliated companies and are not responsible for each other’s services and products. Terms.

Features & Fees Glossary

The StockBrokers.com best online brokers 2020 review (10th annual) took six months to complete and produced over 30,000 words of research. Here’s how we tested.

To help readers, we’ve built a glossary page summarizing 21 of the most commonly requested features and fees. For a deeper dive, use the online broker comparison tool.

Jump To:

Account Basics

Minimum Deposit: The minimum amount of money required to open a new online brokerage account. Many brokers require a minimum deposit to open a new online broker account. Minimum deposit fees can be as low as $500, to as high as $10,000, or more. It all depends on which broker you are selecting to open a new account with.

Virtual Trading: Not every investor is ready to jump right in the water and trade stocks and options with real money. Because of this, online brokers will often offer virtual trading so clients can practice trading first. With virtual trading, also known as simulated trading, investors are given a practice portfolio of fake money alongside access to the broker’s trade platform. Using delayed quotes, clients can then trade both stocks, options, and even forex and futures if they’re offered. Some investors use virtual trading to test new strategies out while trading with real capital.

Commission Free ETFs: Exchange Traded Funds (ETFs) are very popular for investors due to their low management fees, flexibility to be traded like equities, and their effectiveness in replicating the performance of a given index or sector. Thousands of ETFs exist in the ETF universe. Online brokers, in their effort to separate themselves from the competition, began offering commission-free ETFs. Traditional ETFs cost the standard equity trade rate for buys and sells. In most cases, commission free ETFs have no trading cost associated with buying or selling unless the investors sell them before a certain time period, typically within 30 – 60 days. This varies from broker to broker.

No-Load Mutual Funds: Mutual funds are either load or no load. In simple terms, loads are marketing fees. In today’s world of investing, loaded funds can be easily avoided thanks to no-load funds and ETFs. Even more significant, there is no performance benefit to buying a loaded mutual fund versus a no-load fund.

Online Broker Minimum Deposit Paper Trading Commission-Free ETFs Mutual Funds (No Load)
Ally Invest $0.00 No all 11234
Charles Schwab $0.00 No all 7291
Cobra Trading $30,000.00 Yes 0 0
ChoiceTrade $0.00 Yes All 0
E*TRADE $0.00 Yes all 6663
Fidelity $0.00 No all 3957
Firstrade $0.00 No all 10746
Interactive Brokers $0.00 Yes 96 8655
Just2Trade $2,500.00 Yes 0 3000
Lightspeed $10,000.00 Yes 0 0
Merrill Edge $0.00 No all 2471
Robinhood $0.00 No all 0
SogoTrade $500.00 Yes 0 3432
SpeedTrader $30,000.00 Yes 0 0
TD Ameritrade $0.00 Yes all 5992
TradeStation $0.00 Yes all 887

Stock Trading Fees

Stock Trade Fee (Flat): Flat fee trading means the broker charges a single rate no matter how many shares are purchased or what stock is purchased. This is the most common and what most brokerages use.

Stock Trade Fee (Per Share): A per share rate means that a price is charged for every share traded. Most active trading brokers use this commission structure. Since most brokers do not offer a per share commission plan, these brokers are listed with “N/A” throughout the site.

Broker Assisted Trade Fee: When clients do not have access to the internet, or are trying to trade a specialty security, a broker assisted trade can be placed via phone to execute the order. Broker assisted trades are different than Interactive Voice Response (IVR) trades. IVR trades allow clients to simply use their phone to place a trade without human assistance, whereas a broker assisted trade is placed by a licensed broker live.

Mutual Fund Trade Fee: Mutual fund trades can be placed via phone or online, or either method depending on the broker. Alternatively, some online brokerages do not offer mutual fund trading at all. The commission charged to place a mutual fund trade depends first on the type of fund you are trading. No Transaction Fee (NTF) mutual funds do not charge a trade fee, for example, but can charge an early redemption fee if you sell the fund too quickly (typically within 60 – 90 days). The online broker mutual fund trade costs listed below are the standard published rates listed by the brokers. These cover the majority of mutual funds including load and no-load funds.

Online Broker Stock Trade Fee (per trade) Stock Trade Fee (per share) Broker Assisted Trades Fee Mutual Fund Trade Fee
Ally Invest $0.00 N/A $20.00 $9.95
Charles Schwab $0.00 N/A $25.00 $49.95
Cobra Trading N/A $0.004 $0.00 $25.00
ChoiceTrade $0.00 N/A $30.00 N/A
E*TRADE $0.00 N/A $25.00 $19.99
Fidelity $0.00 N/A $32.95 $49.95
Firstrade $0.00 N/A $19.95 $0.00
Interactive Brokers N/A $0.005 $30.00 $14.95
Just2Trade $2.50 $0.003 $22.50 $12.50
Lightspeed $4.50 $0.006 $25.00 N/A
Merrill Edge $0.00 N/A $29.95 $19.95
Robinhood $0.00 N/A $0.00 N/A
SogoTrade $4.88 N/A $25.00 $25.00
SpeedTrader $4.49 $0.004 $30.00 $50.00
TD Ameritrade $0.00 N/A $44.99 $49.99
TradeStation $0.00 $0.01 $50.00 $14.95

Options Trading Fees

Options Trading Base Fee: When trading options online through an online brokerage, most brokers will charge a base fee per trade + a per contract fee. Other brokers, specifically active trading brokers, typically charge only a per contract fee and no base fee. Brokers that do not charge a base rate are listed as “$0.00” throughout the site.

Options Trading Per Contract Fee: Most online brokers charge a base option fee and then a commission for each individual contract. Some brokers have multiple tiers or several different commission structures for options trading to give clients flexibility in their rates depending on how many contracts they trade.

Options Trading Exercise Fee: Online brokers charge an exercise fee to clients who decide to exercise an option instead of closing the option itself. The term exercise is defined as (source thinkorswim), “Exercise is the term used when the owner of a call or put (i.e. someone who has a long position in a call or put) uses his right to buy (in the case of a call) or sell (in the case of a put) the stock.”

Options Trading Assignment Fees: Online brokers charge an assignment fee to clients who have the stock from an option automatically sold or bought due to the option they were holding being exercised. The term assignment is defined as (source thinkorswim), “Assignment is the term used when someone who is short a call or put is forced to sell (in the case of the call) or buy (in the case of a put) the stock. Remember, for every option trade there is a buyer and a seller, so if you are short an option, there is someone out there who is long that option and who could exercise.”

Online Broker Options Base Fee Options Per Contract Fee Options Exercise Fee Options Assignment Fee
Ally Invest $0.00 $0.50 $9.95 $4.95
Charles Schwab $0.00 $0.65 $4.95 $4.95
Cobra Trading N/A $0.50 $ $
ChoiceTrade $0.00 $0.40 $5.00 $5.00
E*TRADE $0.00 $0.65 $19.99 $19.99
Fidelity $0.00 $0.65 $0.00 $0.00
Firstrade $0.00 $0.00 $14.95 $14.95
Interactive Brokers $0.00 $0.65 $0.00 $0.00
Just2Trade $2.50 $0.50 $20.00 $20.00
Lightspeed $0.00 $0.60 $15.00 $15.00
Merrill Edge $0.00 $0.65 $2.95 $2.95
Robinhood $0.00 $0.00 $0.00 $0.00
SogoTrade $4.88 $0.50 $15.00 $15.00
SpeedTrader N/A $0.00 $30.00 $30.00
TD Ameritrade $0.00 $0.65 $19.99 $19.99
TradeStation $0.00 $0.50 $14.95 $5.95

Retirement Services Fees

IRA Annual Fee: All online brokers offer IRA accounts as one of the many account types available for clients. When opening a new IRA account, it is important to check with the brokerage to make sure you understand if there is a yearly fee to keep the account opened. Most brokers do not charge an annual IRA fee to clients, but some do.

IRA Closure Fee: For any new IRA account, clients should understanding if there is a fee charged to close the account. Many brokers will not charge clients an IRA closure fee, but some do. Also note, if you are switching online brokers, brokers often reimburse you for the transfer fee as a new account promotion. The table below breaks down all online broker IRA closure fees.

No Fee IRAs: Online brokers that do not charge any annual maintenance fees for retirement accounts are considered brokers that offer no-fee IRAs.

Online Broker IRA Annual Fee IRA Closure Fee No Fee IRAs
Ally Invest $0.00 $50.00 Yes
Charles Schwab $0.00 $50.00 Yes
Cobra Trading $35.00 $95.00 No
ChoiceTrade $50.00 $50.00 No
E*TRADE $0.00 $60.00 Yes
Fidelity $0.00 $0.00 Yes
Firstrade $0.00 $0.00 Yes
Interactive Brokers $0.00 $0.00 Yes
Just2Trade $50.00 $75.00 No
Lightspeed $35.00 $95.00 No
Merrill Edge $0.00 $49.95 No
Robinhood $0.00 $0.00 No
SogoTrade $35.00 $60.00 No
SpeedTrader N/A N/A No
TD Ameritrade $0.00 $0.00 Yes
TradeStation $35.00 $50.00 No

Banking Services

Checking & Savings Accounts: Being able to have a checking and savings account with your online broker is a nice convenience. Not only can you then trade stocks, options, etc but you can also write checks right out of the brokerage account.

Credit Cards & Debit Cards: The convenience of being able to have a debit or credit card alongside your online broker account is nice. While not many brokerages offer formal banking services such as these, there are some that do. The main reason this is possible is by the broker being a subsidiary of a larger organization. ShareBuilder and Merrill Edge, for example, are a part of Capital One and Bank of America, respectively.

Mortgages: There are not too many online brokers that also offer clients access to formal home loans and mortgage financing. This is because brokerages tend to stick to what they know best, online trading of stocks and options. That said, there are several US brokers that also offer formal mortgage services through their banking arm.

Online Broker Checking Accounts Savings Accounts Credit Cards Debit Cards Mortgage Loans
Ally Invest Yes Yes Yes Yes Yes
Charles Schwab Yes Yes Yes Yes Yes
Cobra Trading No No No No No
ChoiceTrade No No No No No
E*TRADE Yes Yes No Yes No
Fidelity Yes Yes Yes Yes No
Firstrade Yes No No Yes No
Interactive Brokers Yes No No Yes No
Just2Trade No No No No No
Lightspeed No No No No No
Merrill Edge Yes Yes Yes Yes Yes
Robinhood No No No Yes No
SogoTrade No No No No No
SpeedTrader No No No No No
TD Ameritrade Yes No Yes Yes No
TradeStation No No No No No

Clearing Firms

All trades must be cleared by a clearing house or firm. There are a large number of clearing firms (see this list from the CME Group), and with online brokers, especially larger ones, it is very common for them to self-clear. By self-clearing trades, brokerages gain valuable control and operational synergies, all while cutting net costs and increasing their margins. The upfront costs are significant but the advantages are widespread.

Here is a list of the clearing firms used by the most common online stock and option brokers.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Choice!
    Free Trading Education!
    Free Demo Account!
    Big Sign-Up Bonus!

  • Binomo
    Binomo

    Good Choice For Experienced Traders!!!

Like this post? Please share to your friends:
Binary Options Trading Guide
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: