Best Stock Broker
I want to talk to you about the best stock broker. Now, here’s the deal. When you’re trading in general, you do need a
If you’re trading options, you need an options broker. Forex, a Forex broker. Now, you know how I personally feel about Forex. I don’t like it at all.
My favorite is trading stocks and options.
What to look for in the best stock broker
Let’s talk about what to look for so that you know you can make an informed decision of who would be the best stock broker for you.
The first thing is we want to know how much do we pay in commissions?
When trading you need to pay commissions to your broker. So it’s important to know how much your broker charges you.
And I want to compare commissions for those of you who are trading stocks and I also want to compare commissions for those of you who are interested in trading options.
Another thing that we need to know is what about the platform?
How good or bad is the trading platform? Because you do need a trading platform to place the trades, right?
You have to tell your broker what you want to do, and in order to do this you don’t call the broker. You’re a self-directed trader. That’s a beautiful thing about trading, it’s just you and the computer.
So you need to use their trading platform to tell the broker what you want to do.
The next thing is we want to compare the customer support.
Especially when you’re new to trading, you want to make sure that you’re getting customer support
For some of you, this might be important to know how much money you need to put in the account.
And the last thing is the account minimum.
Let’s talk about and compare different stock brokers
The first broker here is as Interactive Brokers.
Interactive Brokers is a broker that I personally use.
What I recommend when looking for a broker is that you go to their website. Commissions are subject to change, and they change all the time.
So let’s go to their website. I want to assume that you’re trading 100 shares to make this comparable.
You just go to pricing commissions and go for the tiered pricing. It’s really quick to find this information, and you’ll see they’re charging 0.0035 cents.
Let’s calculate this. 100 shares times 0.0035 means that it would be $0.35, which is also the minimum order.
Interactive Brokers is definitely dirt-cheap when it comes to commissions.
Let’s take a look at the pricing to trade one option on Interactive Brokers.
If the premium is more than $0.10, which most often will be, it’s $0.70 per contract. So, $0.70 per contract with a minimum of $1, but as you can see, this is definitely one of the cheapest brokers that are out there.
I personally think their platform looks like it’s from the 90’s. I have been using them since 1998 and I believe their platform is still the same and hasn’t changed much.
I would say it’s okay but would give it a minus. I do believe that there are better platforms out there.
I’m not impressed with their customer support at all.
When you try to call Interactive Brokers or contact them by chat, it is actually quite hilarious.
I have a screenshot where I asked them a very simple question about a combo selection tool. And after 20 minutes, I still haven’t received an answer here.
So, I don’t think that the customer support is any good.
They are not known for their customer support, which I guess is fine. You get what you pay for.
Let’s talk about this before we move on to some other brokers.
The account minimum is $10,000 – they’re more geared towards traders who know what they are doing.
When you know what you’re doing, and you don’t care about having the best platform, if you just want to enter an order, the platform is absolutely fine and does the trick.
And as you can see, it is really, really cheap.
Now let’s go to the other end of the spectrum and on the other end of the spectrum there is, in my opinion, TD Ameritrade.
And again, all of this is my opinion. I’m not being compensated by any of these brokers to say any of these things. T.D. Ameritrade, on the other hand, is a broker.
Let’s go to their website to get an idea.
Always make sure that you look up the latest commissions that they have because they’re subject to change and they might have better pricing by the time you read this article.
The pricing is pretty straightforward. It’s $6.95 per trade.
Compared to Interactive Brokers, a little bit more expensive.
For options you are actually paying $6.95 plus $0.75 – totaling $7.70.
Their platform is called Think or Swim and I believe it’s one of the best platforms out. Very powerful. I really like the platform. It’s almost too powerful.
There are so many features that in the beginning, it might be a steep learning curve.
I believe their customer support is definitely one of the best in the industry. And here’s why.
When you open an account with them, they know that they have a really powerful platform.
So, they call you and say, “Would you like us to walk you through this platform in detail?” And when you say, yes, they will. As you can see, this might be helpful for you.
The account minimum is a whopping $0.
You can open an account with $0. This is where TD Ameritrade is on the other side of the spectrum.
(H3 Heading) Other brokers
I want to basically say they are all pretty much the same.
For example, if you look at E-Trade, Schwab, Fidelity… They’re all pretty good.
Middle of the line here.
What does this mean? Their commissions are usually $4.95.
When trading options, it is $4.95 plus $0.65 per option – totaling $5.60.
Their platforms are usually pretty good. I’ll give them a plus.
Their customer support is also really good.
The account minimums are usually anywhere between a $1,000-$2,000 so not as low as TD Ameritrade but you need to have money in your account anyhow to trade.
The last platform that I want to talk about here is Robin Hood.
So, Robin Hood is a platform that is free.
What are the commissions for stocks? Free!
What are the commissions for options? Free!
You might wonder…
How do they make money?
Well, this is where they say, very easy. They publicly stated that they make money by selling your information.
When you open an account, you have to disclose your net worth, how much money you want to put in the trading account and your liquid assets.
There’s quite a few parts to the account process, and they will sell the data.
They will also sell the data of whether you make money, or you lose money, right?
And this is all in the disclaimers that you sign when you open an account.
You also don’t have a so-called margin account. And it might be difficult to short stocks.
When you want to do this, you have to pay for their premium platform.
Robin Hood Gold is the name of their premium subscription. It is $200 per month.
Now, when you do this, you get a margin account.
As a trader, you do want to have a margin account, and I’ll cover this in another article on what that means.
Wrap Up – What is the best stock broker?
Deep discount broker. Dirt cheap. Platform, so, so. Pretty bad customer support and the accounting minimum is pretty high.
The 900-pound gorilla in this industry.
Commissions are $6.95 so commissions are definitely higher. Often, you get a deal that you can trade for two months for free but then you’re paying pretty high commissions.
The platform, I believe is one of the best platforms out there. Customer support is a really, really good. The account minimum is $0.
E-Trade, Schwab, Fidelity, Merrill Lynch, etc.
The middle of the road brokers.
The commissions for stocks and options are Interactive Brokers and T.D. Ameritrade.
Platform, good. Customer support, good. Account minimum is usually $1,000-$2,000.
Which is free.
But again, you know there’s nothing free, that you always pay the price somehow.
You either have to upgrade to their gold platform for $200 per month, or they’re selling your data.
And the platform, which is okay, is on mobile. I don’t think that they have a desktop application, which for some of you, might be a minus.
I personally prefer to do things on my computer, but this is just me.
Their customer support, I don’t know much about it. Never talked to them. I would probably say it’s neutral.
I wouldn’t expect much in terms of their customer support here because again, it is free. So, they have a help center on the website.
What’s the best stock broker for you?
These are the stock brokers for 2019 along with a quick update of what to expect.
If you know what you’re doing, you might consider Interactive Brokers.
Again, very little support. The platform does the basics. You can enter an order and that’s all you need, right?
If you’re a beginner, I would say start with TD Ameritrade, it’s very helpful. They answer your questions. They get on the phone with you. They provide excellent customer support.
If you already have an account with E-trade Schwab or Fidelity – stick with them. They’re fine. There’s no need to switch brokers.
I personally would not trade on Robin Hood so it’s not one of my favorites.
But again, this is your decision, and this is why I’m doing this article on the best stock broker to quickly show you that you can make an informed decision of what broker is right for you.
If you found this helpful, please share it and comment below. The more you share it, the more people get exposed to it and I think it’s good information that I hope helps many traders.
This article is also available on my new podcast, The Truth About Trading: Listen Now
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