Best Stock Broker for Day Trading

August 17, 2018 — 4:48 PM EDT

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.

Day traders may place their trades manually, often from a chart, or set up an automated system that 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.  All the brokers ranked here give 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 let traders 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. 

Investopedia’s Top Brokers for Day Traders

See Interactive Brokers Full Review

  • Commission: Per-share pricing at $0.005/share
  • Account Minimum: $500, or $5,000 for IRA
  • Best for Trade Automation

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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 about 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.

✓  Pros

 

❌  Cons

•  Very low fees.   •  The learning curve to become proficient using TWS is relatively steeps.
•  Extremely customizable platform, with watchlists that can display over 450 columns.   •  Accounts with less than $100,000 in assets are subject to monthly inactivity fees, should the frequent trader choose to take a break.
•  More than 120 technical indicators available for charting.   •  Several other brokers offer deeper technical analysis toolsets.
•  Terrific market scanner to stay on top of current conditions.   •  Streaming real-time quotes are restricted to one device at a time
•  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.    
     

 

See TradeStation Full Review

  • Commission: Flat fee of $5 per trade, or per-share pricing at $0.01/share
  • Account Minimum: $500, or $5,000 for IRA
  • Best for Trade Automation

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TradeStation’s downloadable trading platform is packed with features for frequent traders.  The platform originated as a technical analysis and charting package which evolved 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.

✓  Pros

 

❌  Cons

•  Excellent charting and technical analysis capabilities.   •  No forex trading.
•  A massive collection of historical data for building a trading model, then backtesting and tweaking for additional profitability.   •  Cannot develop trading systems on mobile or web.
•  Portfolio Maestro feature shows which strategies are successful and which need improvement.   •  The language used to develop trading systems is difficult to learn.
•  Flexible and customizable real-time market scanners.    
•  Web-based and mobile access synched to the desktop platform with extensive charting capabilities.    
•  TradingApp Store features in-house and third-party tools, many of which are free, to add to your platform.    
     

 

See Lightspeed Full Review

  • Commission: $1.00-$1.50 minimum depending on platform
  • Account Minimum: $10,000 for Web Trader, $25,000 for Lightspeed Trader
  • Best for Platform Stability

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Lightspeed Trader, the downloadable platform for day traders, is exceptionally stable, and had no issues weathering the many trading surges of the last year.  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 that can be invoked with hot keys to expedite orders.

✓  Pros

 

❌  Cons

•  Very fast data feeds with flexible order routing.   •  No mutual funds or forex available.
•  Excellent support.   •  Low balance accounts must generate a minimum of $25/month in commissions, or pay an inactivity fee.
•  Livevol X, a free platform available to Lightspeed customers, has terrific options analysis tools.   •  Futures trading available only on the RealTick Pro platform, which costs $325/month.
     

 

See TD Ameritrade Full Review

  • Commission: $6.95. High velocity traders can negotiate lower rates
  • Account Minimum: $0
  • Best for Customizable Charting

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The thinkorswim platform from TD Ameritrade provides customers with dazzling charting tools that 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.  If you’re following multiple stocks, you can 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. 

✓  Pros

 

❌  Cons

•  Strong customizable charting package.   •  Standard commissions are very high for day traders, but frequent traders can negotiate their own fees.
•  Streaming real-time quotes can be utilized on multiple devices simultaneously.   •  The standard margin rates are also very high.
•  The Fast Beta study, which overweighs more recent prices, is useful for analyzing stocks with increasing volatility.   •  Smaller than average “Easy to Borrow” list for short sellers.
•  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.    
     

 

  • Commission: $5 to open a stock/ETF position, $0 to close
  • Account Minimum: $0
  • Best for Frequent Options Trading

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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.  This is key for people who aren’t always at their home base.  Even the mobile apps are power-packed. The tools are oriented to people who visualize their trades rather than looking at 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.

✓  Pros

 

❌  Cons

•  Innovative pricing structure results in fairly low costs, especially when trading options.   •  Commissions are fixed. There’s no negotiating for more active trader.
•  The platform is new (launched 2017) and built on the latest technology, so it’s fast and stable.   •  Margin fees are higher than average for frequent traders, but can be negotiated.
•  Scanners help you find securities that are becoming more volatile.   •  Cannot place multiple orders simultaneously, or stage orders for later entry.
•  Watchlists are sortable by up to 50 data points.    
•  Quotes are not throttled, so they load quickly.    
     

 

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.