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Best Discount Brokers for 2019

August 17, 2018 — 3:34 PM EDT

Cost-conscious traders look for brokers with very low fees. Bells and whistles, such as fancy charting or idea generation features? No thanks, just make trading cheap. Hand holding? Investing education? Not so much, just cut costs. Another aspect of keeping trading costs low is quality order executions. Trading engines that seek out price improvement can save money on buy orders, or find a higher price for sell orders.

We looked for brokers who offer deep discounted trades. The costs displayed for each broker represent the fees for trading 10 blocks of 500 shares of stock or exchange-traded funds (ETFs), along with the cost to open and close a two-legged options spread of 5 contracts each, such as a bull call spread. Some brokers charge a per-leg fee for options trades, so frequent spread traders might want to look for brokers who only charge a per-contract fee. We also show the margin rates for a $15,000 balance for those who trade on margin.

Investopedia’s Top Discount Brokers

See Interactive Brokers Full Review

  • Commissions: 10 stock trades of 500 shares:  $25
    • Open and close 2 leg options spread of 5 contracts each: $14
    • Margin interest on $15,000 balance: 3.41%
  • Account Minimum: $0
  • Best in Overall Low Costs

Open Account

The long-time leader in low-cost trading, Interactive Brokers is geared for very active traders. The firm’s priority is keeping commissions and margin rates down, and they do an excellent job maintaining their position on the low end of the pricing scale. 

Even though costs are low, you’ll find a platform packed with features and customizable trading algorithms. Stock/ETF commissions are priced at $0.005 per share with a minimum of $1, while options trades are $0.70 per contract with no per-leg fee.

✓  Pros

 

❌  Cons

•  Very low fees and margin rates.   •  The learning curve to become proficient using TWS is relatively steep.
•  Customizable platform, Traders Workstation (TWS), has three versions: downloadable, web-based, or mobile app.   •  Accounts with less than $100,000 in assets are subject to monthly inactivity fees should you generate less than $10 in commissions.
•  Paper trading capability lets you test strategies without risking real money.   •  Streaming real-time quotes are restricted to one device at a time.   
•  You can trade products around the clock and around the globe with IB’s connections to numerous international markets.    
•  No per-leg fee for options trades.    
     

 

See Sogotrade Full Review

  • Commission: 10 stock trades of 500 shares:  $28.80-48.80
    • Open and close 2 leg options spread of 5 contracts each: $19.76
    • Margin interest on $15,000 balance: 9.5%
  • Account Minimum: $0
  • Best for Chinese customers

Open Account

Sogotrade’s pricing schedule has three tiers depending on trading activity. The lowest tier is $2.88 for stock/ETF transactions regardless of the number of shares traded. The platform can be translated into Chinese with a toggle, and the firm has Chinese-speaking representatives in the U.S. and in Taiwan to help them out. 

In the last year, Sogotrade has redesigned its front end so that it’s more appealing and easier to use. They also added online cash transfers and electronic account opening. Their SogoPlay options tool includes a feature that looks at your current open positions and recommends options strategies that can enhance returns. 

✓  Pros

 

❌  Cons

•  If you open an account with $10,000 or more, you get the $2.88/trade commission for a year, regardless of trading activity.   •  Prepaid trades cannot be used in IRAs.
•  You can buy a package of 20 trades at $3.88, or 50 trades at $2.88, per stock trade or options base fee that can be used for one year.   •  IRAs incur a $35/year management fee.
•  Choose from four desktop platforms or two mobile apps. Options traders can use the easily configurable SogoOptions platform, which includes a variety of risk management and analysis tools.   •  Accounts under $100 with no trades in the last year incur a $50 low equity fee.   
•  Login security includes a PIN that must be entered using an on-screen keypad, so keystroke capturing malware is thwarted.   •  Margin rates are on the high side.  
     

 

See Fidelity Investments Full Review

  • Commission: 10 stock trades of 500 shares:  $49.50
    • Open and close 2 leg options spread of 5 contracts each: $22.90
    • Margin interest on $15,000 balance: 9.325%
  • Account Minimum: $0
  • Best in Price Improvement

Open Account

Fidelity’s standard commission of $4.95 is on the high side for this group of brokers, but their trade execution technology can save more than the commission charged by seeking out price improvement. Its website is packed with education content and screeners. Frequent traders or those with high account balances can qualify for the Active Trader Pro platform.

✓  Pros

 

❌  Cons

•  You could end up saving more than you pay in commissions thanks to Fidelity’s price improvement-focused order routing engine.   •  Surges in trading have caused Fidelity’s platform to crash. The firm says they are working to improve their infrastructure to avoid these problems in the future..
•  There are 265 commission-free ETFs to choose from, further keeping costs down.   •  Margin rates are on the high end of the scale.
•  Tons of planning tools and educational content to help you become a better investor.   •  No futures trading available.   
•  When you need help from a human, you’ll find excellent support.    
     

 

See Firstrade Full Review

  • Commission: 10 stock trades of 500 shares:  $29.50
    • Open and close 2 leg options spread of 5 contracts each: $15.90
    • Margin interest on $15,000 balance: 9.0%
  • Account Minimum: $0
  • Best in Commission-Free ETFs

Open Account

Firstrade is positioning itself between the brokers who offer every feature under the sun but charge higher rates, and the stripped-down brokers who offer “free” trades with very little service. They cut their commissions over the last couple of years and have streamlined their digital processes.

The mobile apps have been upgraded and include Morningstar research and interactive charting. Firstrade offers over 700 commission-free ETFs, which is the most available at any online broker..

✓  Pros

 

❌  Cons

•  Simple website that is easy to navigate.   •  Cannot customize trading defaults.
•  Over 700 commission-free ETFs from 40 fund families available.   •  There is a 30-day holding period for the commission-free ETFs. If you sell it within that period, you’ll be charged $2.95.
•  OptionsPlay integrated into platform for strategy scanning.   •  Limited research reports.   
     

 

Full Review Coming Soon!

  • Commission: 10 stock trades of 500 shares:  $25.00
    • Open and close 2 leg options spread of 5 contracts each: $10
    • Margin interest on $15,000 balance: 8.0%
  • Account Minimum: $0
  • Best for Low Cost Options Trading

Open Account

Bargain hunters, especially those who trade options frequently, will like tastyworks’ pricing schedule. The firm charges commissions only to open a position; closing a position is free. Tastyworks also caps its options fees at $10 per leg, so if you trade spreads with 20 or 30 contracts per leg, you will save a lot of money.

All of the tools on this configurable platform are designed to you focused on liquidity, probability, and volatility. Newcomers to options trading might be uncomfortable at first, but you can watch the video feed from companion tastytrade to learn more.

✓  Pros

 

❌  Cons

•  Options trades are capped at $10 per leg, no matter how many contracts you trade.   • Tastyworks does not offer any mutual funds, nor does it have a robo-advisory.
•  For both options and stocks/ETFs, you only pay a commission to open a position.  Closing trades are free.   •  No portfolio margining available.
•  Built-in video feed from tastytrade allows you to follow trades from hosts of the show, and learn their strategies.   •  Beyond the video feed from tastytrade, there is no other research built into the platform.   
•  Simple-looking platform that can be customized as you wish.    
     

About Our Methodology

At Investopedia, we started from scratch to build a better brokerage recommendation tool and objective reviews of self-directed brokerages. Our mission is to provide an unbiased and accurate analysis – so you can make smarter investing decisions.

We want to help find you the best online stock broker so we examined over 100 variables, from pricing and fees to trading platforms to special features. No single online broker was the best in every category, so you should review the complete list to identify the firm that best matches your priorities.