Finding an Affordable Online Stock Trading Platform
By: Jonathan Wagner
Online stock trading gives you the unprecedented freedom and flexibility to trade stocks according to your needs and goals. You can appreciate the do-it-yourself approach to stock trading for a variety of reasons, but at the heart of any do-it-yourself approach is the reality that you will be saving money. Now that’s enticing! Why pay a broker to trade stocks when you can make your own informed decisions and execute trades for a fraction of the cost? In fact, most online stock trading platforms grant you access to a variety of diagnostic and tracking tools so that you can make informed decisions. And there’s a certain pride that comes with accomplishing a new feat on your own.
But the decision to embark on an online trading journey can be a bit daunting. And the first decision you will be faced with will most assuredly be, ”Which online platform do I choose?” More specifically, the cost-conscious consumer will be asking, “Which platform will save me the most money?”
TradeKing is known as a very low-cost online trading platform. With this low cost comes fewer frills like detailed stock analysis. However, the cost per trade on the TradeKing platform is only $4.95. Option trades are an additional $0.65 per contract. The only stipulation to trading on the TradeKing platform is that you will need to meet or exceed a $100 minimum investment. For more information, read this TradeKing review.
OptionsHouse is another low-cost online trading platform. On July 25, 2016, OptionsHouse was actually acquired by the much larger E*TRADE. So, OptionsHouse is now supported by the extensive resources of E*TRADE, including their research platforms and educational resources. OptionsHouse offers a per-trade cost of just $4.95 and just an additional $0.50 per contract for option trades. For more information, read this OptionsHouse review.
TD Ameritrade offers straightforward pricing at a great value. The price per trade with TD Ameritrade is $9.99 regardless of your account balance or how often you trade. Option trades are an additional $0.75 per contract. This price is fairly standard for the industry. There is no minimum amount required for an initial deposit. And the frills afforded to you with the TD Ameritrade platform are impressive. The free third-party research platform is quite helpful and better than most research software found on competing platforms.
Scottrade quotes a competitive rate of $7 per trade. Option stock trades are an additional $0.70 per contract. However, Scottrade is not quite as straightforward as TD Ameritrade. If you are looking to purchase stocks priced under $1, you are subject to an additional 1/2% of the principal value. And you will need to be prepared to open your Scottrade account with a minimum initial deposit of $2,500.
E*TRADE prides itself in creating an online trading platform that supports the needs of all traders from novice to expert. The provided educational tools and analyses are well-designed and easy to use and access. E*TRADE charges $9.99 per trade but also offers reduced pricing at $7.99 for those conducting 150+ trades per quarter. Option trades are $9.99 plus an additional $0.75 per contract. The $7.99 discounted pricing for those making 150+ trades per quarter is also available on option trades. You will need to make a $500 minimum initial deposit when trading on the E*TRADE platform.
Hopefully, this information will help you to make a more informed decision on which trading platform will work best for you. The costs are fairly straightforward with most of these companies. Rest assured that trading online is much more affordable and practical than using a broker.
Learn more about the pros and cons to trading online vs. with a stock broker by checking out this informative article on the benefits of online stock trading and stock brokers.
About Jonathan Wagner