Ally Invest Rated Best Low-Cost Broker for Option Traders by Benzinga
When it comes to options trading, DIY investors have a lot of online brokerages to choose from. After all, this is a lucrative market for the discount brokers, so they are going to great lengths to get your business. Among those vying for self-directed investors' attention, Ally Invest received the top scores in Benzinga's recent ranking of the best brokers to trade options with.
When determining which firms deserved the top rankings, Benzinga looked at commission costs, hidden fees such as platform and data fees, and different levels of research and education depending on the expertise of the investor. With that in mind, the financial media company found that Ally Financial Inc.'s (ALLY) Ally Invest is the cheapest of the brokers when trading options.
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Cost is particularly important for options traders, since turning a profit can be tough with commissions and fees weighing on returns. However, Ally Invest minimizes that by offering option pricing starting at $4.95 per trade plus $0.65 per contract. For those making 30 or more trades each month, that fee declines to $3.95 per trade and $0.50 per contract. Traders who don't buy and sell options at least 30 times per month can also access the $3.95 per trade plus $0.50 per contract price if they have at least $100,000 or more in their accounts.
On top of this attractive pricing, Benzinga said that Ally Invest provides "some of the lowest margin rates" among the major online trading platforms – at 8.75% for balances between $0.01 and $9,999. Rivals TD Ameritrade and E*TRADE charge 9.50% and 9.75%, respectively, in margin rates for similar balances.
The top ranking bodes well for Ally Invest as it attempts to stand out from a crowded marketplace and court younger investors. Last April, Ally spent $275 million to acquire TradeKing, betting that it can make a splash in self-directed online trading, particularly with millennials. While low-cost trading should be a main driver of business, features that millennials want, including technology, will also be important. This is an area in which Ally Invest is standing out.
For example, Ally Bank recently announced that it created an Amazon Alexa skill for its mobile banking clients. With it, customers can check their bank accounts via voice. While Ally Invest has not yet announced any similar new technology, it is not a stretch to assume that the Alexa skill will make its way to Ally's online investing platform as well.