When choosing an online broker, day traders place a premium on speed, reliability, and low cost. Features designed to appeal to long-term infrequent traders are unnecessary for day traders, who generally start a trading day with no positions in their portfolios, make a lot of transactions, and end the day having closed all of those trades. Here are our top brokers for day trading:
- Interactive Brokers
- TD Ameritrade
Day traders may place their trades manually, often from a chart, or set up an automated system which generates orders on their behalf. Fundamental data is not a concern, but the ability to monitor price volatility, liquidity, trading volume, and breaking news is key.
Day traders often prefer brokers who charge per share (rather than per trade). They also need real-time margin and buying power updates. Each broker ranked here affords their day-trading customers the ability to enter orders very quickly by customizing the size of trades and turning off the trade confirmation screen. We sought brokers who allow traders to place multiple orders simultaneously, designate which trading venue will handle the order, and customize trading defaults.
This ranking focuses on online brokers and does not consider proprietary trading shops.
- Account Minimum: $0
- Fees: $0.005 per share
The longtime leader in low-cost trading, Interactive Brokers is geared for very active traders. Though they have been adding features for less frequent traders over the last few years, their priority is keeping fees down. The speedy downloadable platform, Trader Workstation (TWS), includes dozens of professional-grade trading algorithms, such as the Adaptive Algo, which finds better prices for filling orders. You can customize the algorithm to fill your market order at the midpoint between bid and ask, thereby seeking opportunities within the spread to chisel a fraction of a penny more for your profits.
IB’s margin rates are practically the lowest you will find, especially for traders who use more than $100,000 of margin. You can automate a trading strategy using an API plug-in, or by subscribing to a strategy on their Investors’ Marketplace.
Interactive Brokers also received awards for Best Overall Online Brokers, Best for International Trading, Best for Low Costs, Best for Options Trading and Best for Penny Stocks.
Very low fees.
An extremely customizable platform, with watchlists capable of displaying over 450 columns.
More than 120 technical indicators available for charting.
Terrific market scanner to stay on top of current conditions.
Algorithmic trading with automated trading capabilities available via API. Paper trading capability lets you test strategies without risking money: a great way to familiarize yourself with the algorithm.
The learning curve to become proficient using TWS is relatively steep.
Accounts with less than $100,000 in assets are subject to monthly inactivity fees, should the frequent trader choose to take a break.
Several other brokers offer deeper technical analysis toolsets.
Streaming real-time quotes are restricted to one device at a time.
- Account Minimum: $10,000 (web), $25,000 (software)
- Fees: Max $4.50/stock trade, $0.65/options contract. No charge per leg.
- Best for: Cost-conscious & active traders.
Lightspeed Trader, the downloadable platform for day traders, is exceptionally stable, having had no issues weathering the many trading surges of the last few years. It’s customizable and includes streaming real-time quotes on all of the assets you can trade. The charts display and update rapidly and let you apply technical studies and Level II quotes, among other powerful features.
Lightspeed Trader is highly secure. The login process includes a virtual private network (VPN), especially crucial for those with wireless Internet connections. A soft token is offered for those who use the web platform. Customers can set up complex order entry defaults which can be invoked with hotkeys to expedite orders. Frequent options traders can use the LivevolX platform.
Lightspeed also received awards for Best for Low Costs and Best for Options Trading.
Very fast data feeds with flexible order routing
Excellent support and a stable platform
Livevol X, a free platform available to Lightspeed customers, has terrific options analysis tools
Low balance accounts must generate a minimum of $25/month in commissions, or pay an inactivity fee
Futures trading available only on the RealTick Pro platform, which costs $325/month
No mutual funds or forex available
- Account Minimum: $500 ($5,000 for IRA)
- Fees: $5 stocks and ETFs, $0.50/contract and $5/trade options
TradeStation’s downloadable trading platform is packed with features for frequent traders. The platform originated as a technical analysis and charting package, evolving into a brokerage in 2001. You can route your orders yourself, selecting a trading venue, or use TradeStation’s smart order routing engine.
One of the strengths of this broker is the ability to build, backtest, and deploy an automated trading strategy based on technical triggers. The streaming real-time data is clean, so your strategies don’t send trades to market based on an erroneous feed. The TradingApp Store features in-house and third-party tools, many of which are free, to add to your platform. The web-based and mobile platforms are synched to the desktop platform, and offer extensive charting capabilities.
TradeStation also received awards for Best Overall Online Brokers and Best for Penny Stocks.
Excellent charting and technical analysis capabilities
A massive collection of historical data
Portfolio Maestro feature helps fine-tune trading strategies
Flexible and customizable real-time market scanners.
No forex trading.
Cannot develop trading systems on mobile or web.
The language used to develop trading systems is difficult to learn.
TD Ameritrade (thinkorswim)
- Account Minimum: $0
- Fees: $6.95 for stock and ETF trades, $6.95 per leg plus $0.75 for options
The thinkorswim platform from TD Ameritrade provides customers with dazzling charting tools which can be customized to your heart’s content. Streaming real-time quotes power the intra-day charts, and you can send orders from a chart with a mouse click. To follow multiple stocks, simply tile charts on your monitor. If you want to automate a trading strategy, the thinkScript language allows you to use one of 300 built-in strategies, or set up your own from the hundreds of technical indicators included in the platform. The trading simulator, paperMoney, lets you work out your strategies without risking money.
TD Ameritrade also received awards for Best Overall Online Brokers, Best for Options Trading, Best Web Trading Platforms, Best for Beginners, Best for ETFs, Best for Roth IRAs, Best for IRAs and Best Stock Trading Apps.
Strong customizable charting package.
Streaming real-time quotes can be utilized on multiple devices simultaneously
The Fast Beta study, which overweighs more recent prices, is useful for analyzing stocks with increasing volatility.
A variety of scanners help you filter stocks, options, futures, and forex for trading opportunities.
You can set up defaults for order entry to speed sending an order to market.
Standard commissions are very high for day traders, but frequent traders can negotiate their own fees.
The standard margin rates are also very high.
Smaller than average “Easy to Borrow” list for short sellers.
- Account Minimum: $0
- Fees: $5.00 stock trades $1.00 options trades
Tastyworks is a fast, reliable platform focused on options analysis and trading, but there are also plenty of tools for stock/ETF traders. The dashboard layout is easily customizable. Unlike other brokers, the browser platform has almost every feature as the downloadable one -- key for those who aren’t always at home base. Even the mobile apps are power-packed.
The tools are designed for people who visualize prospective trades rather than following a flow of time and sales data. They focus on liquidity, volatility, and the probability of a profit. On quote pages, implied volatility appears before a quote in order to help customers understand market opportunity.
Tastyworks also received awards for Best for Low Costs, and Best for Options Trading.
Innovative pricing structure results in fairly low costs, especially when trading options.
The platform is new (launched 2017) and built on the latest technology, so it’s fast and stable.
Scanners help you find securities that are becoming more volatile.
Watchlists are sortable by up to 50 data points.
Quotes are not throttled, so they load quickly.
Commissions are fixed. There’s no negotiating for a more active trader.
Margin fees are higher than average for frequent traders but can be negotiated.
Cannot place multiple orders simultaneously, or stage orders for a later entry.
Are You a Day Trader?
A key consideration for day traders is trading platform quality, which can impact things such as execution speed and price quotes. Day traders, especially those who trade using their own algorithms, need flawless data feeds, or they risk entering orders based on errors in the data. In an environment where high-frequency traders placing transactions in milliseconds, human traders must possess the best tools. Most brokers offer speedy trade executions, but slippage remains a concern. Traders should test for themselves how long a platform takes to execute a trade.
Commissions, margin rates, and other expenses are also top concerns for day traders. Even if a day trader can consistently beat the market, the profit from those positions must exceed the cost of commissions, and for a high volume trader, commission costs can easily run into the hundreds or thousands of dollars per day. Traders can check these rates by contacting the broker or checking the broker website, but most offer special rates for highly active day traders.
It’s also important for day traders to consider factors like customer service and the broker’s financial stability. Customer service plays a key role during times of crisis – such as a computer crash or other failure when you need to reach support to place a trade. The best brokers offer dedicated account representatives for highly active day traders to assist in this regard.
The financial strength of the firm is also important since small brokerages can and do go out of business, but the main player in whether or not you can recover your assets is the clearing firm. Take a look at FINRA's BrokerCheck page before signing on with a small firm, to make sure they haven't had claims filed against them for misdeeds or financial instability.
Investopedia’s mission is to provide investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.
In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.
Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.