Brokerage firms are more abundant than they’ve ever been before. Whether you are looking for a local stock brokerage firm or an online stock brokerage firm, you’re sure to find plenty to choose from. Unfortunately, this won’t make your choice any easier. Searching for traditional stock brokerage firms can be just as difficult as searching for online brokerage firms.
One of the best ways to find a traditional stock brokerage firm is by talking to friends who have first-hand experience with them. They will be able to tell you if they are happy with their return on investments, the amount of attention their account gets, and the amount of commission they are being charged. A local stock brokerage firm can be a great asset or a great waste of money. Many local stock brokerage firms get paid whenever you place a trade with them. These charges will range anywhere from $30 - $100 per trade, thus making you wonder when their advice to sell and buy a different stock is truly sincere. Other brokerage firms will get paid based off a success fee which means the more they earn for you, the more they get paid. Both commission methods have their pros and cons, thus making a recommendation from a friend or colleague that much more valuable. Regardless, for some people a local brokerage firm will be the best option, but for many others (as you’ll find out by asking friends and colleagues) an online stock brokerage firm is the quicker, better, and more cost effective option.
There are well over 25 online stock brokerage firms that all have unique offerings. After using many different stock brokers and hours of research I’ve come up with a list of some of the more reputable brokers that stand out from the others along with a few alternatives to a typical traditional or online stock brokerage firm.
If you’re looking to trade options, then Optionshouse is a no-brainer. Optionshouse earned 4.5 stars from Barron’s for one of the best for options traders in 2012. However, they do offer more than option trading. While the Optionshouse name implies they are only an options trading broker, they are far from being only limited to trading options. In fact, they tout one of lowest stock trade commissions in the industry and come with the #1 ranking for mobile platforms from Barron’s. Even with the ultra-low commission they offer some essential, yet free stock trading tools such as Streaming Charts & News and a Stock Screener. Optionshouse is worth a second look for stock or options traders.
Zecco $4.95 stock trades
Zecco is somewhat new, but quickly gaining respect among brokerage firms. Zecco exploded with popularity during their first years as a brokerage firm due to their zero cost (hence the name Zecco) stock commissions. As their clientele rapidly grew, the demand for more trading tools, top rated customer service, and a full featured trading community grew just as quick. With all the extra features Zecco no longer offers free stock trades, but is still a force to be reckoned with at a mere $4.95 per stock trade. Even at this discounted rate, Zecco still has found a way to compete with other top notched brokerage firms. Zecco’s discounted pricing doesn’t stop at only trading stocks. They also offer $4.95 option trades with $.65 per contract. Lastly, Zecco took it a step further and offers an attractive forex trading platform with attractive low spreads and a risk-free virtual trading platform to test out before making any real trades.
TradeKing $4.95 stock trades
Any stock brokerage firm that is given 5 stars for customer service by Smart Money, 4 stars overall from Barron’s, and rated #1 for site usability by Barron’s and can still provide among the lowest cost stock trades cannot be ignored when selecting a stock broker. Tradeking also offers better than average stock trading tools and even stronger options trading tools including the Options Playbook. The Options Playbook includes 40 option strategies for option traders of all levels.
ShareBuilder $4
ShareBuilder by ING Direct is more than just a place to buy stocks. ShareBuilder also offers banking, home loans, retirement plans, and research tools. One of the unique features at ShareBuilder is the Automatic Investing option. This allows a person to automatically buy stocks, mutual funds, or ETF’s based on a specified dollar amount and pre-selected dollar amount. You don’t have to bank with ING Direct to use automatic investing, you can link your existing bank account up to make the automatic investments. The deposits are made similar to the way a 401k does, but with more control over your account. ShareBuilder also offers retirement plans like Traditional and Roth IRA’s. ShareBuilder is a great alternative to using a more expensive traditional brokerage firm.
TradeMONSTER $7.50
What attracts many people to TradeMONSTER is their unique strategy finding tools. Any active investor knows that finding a strategy that provides consistent results is the key to profiting in the stock market. The thing that’s so exciting about TradeMONSTER is that even a beginner stock trader can use the strategy finding tools. I encourage anyone considering this broker to watch the TradeMonster strategy tool demonstration video and to at least sign up for a free virtual trading account to try it for yourself.
SpeedTrader $.39 per 100 shares
You may not hear much about this broker unless you’re an avid day trader. However, SpeedTrader is among the fastest growing private companies in the United States and is on track to compete with the best of the best in stock brokerage firms. At prices as low as $.39 per 100 shares, SpeedTrader is a no-brainer for stock traders making 3 or more trades a day. For stock traders that require high speed trading and direct access trading as part of their strategy, SpeedTrader is the obvious choice.
