Cost-conscious buyers look for brokers with very low fees. Here are our top five brokers for low costs:
- Interactive Brokers
- Robinhood
- tastyworks
- eOption
- Lightspeed
Bells and whistles, such as fancy graph or idea generation features? No thanks, just make trading cheap. Hand holding? Investing education? Not so much, barely cut costs. Another aspect of keeping trading costs low is quality order executions. Trading engines that invite out price improvement can save money on buy orders, or find a higher price for sell orders.
We looked for brokers who proffer deeply discounted trades and low margin fees. Using our regular scoring rubric, we overweighted the Costs score, persevere in the Trading Technology weight the same, and underweighted the remaining factors. Some brokers charge a per-leg fee for options trades, so continual spread traders might want to look for brokers who only charge a per-contract fee.
Interactive Brokers
Interactive Stockbrokers’ order routing system is likely to find you enough price improvement to offset any trading costs. Their toolset for numerous traders helps find appropriate trades.
Interactive Brokers also received awards for Best Overall Online Middlemen, Best for International Trading, Best for Options Trading, Best for Penny Stocks, and Best for Day Trading.
Pros
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Low patron costs and margin rates
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The platform and services are geared for active traders
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Clients can trade on 120 markets in 31 provinces, using 23 currencies
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Good charting and portfolio analysis
Cons
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Small or inactive accounts are subject to additional honoraria
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Mosaic, the primary platform, has a steep learning curve
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Quotes stream on only one device at a time
Robinhood
- Account Littlest: $0
- Fees: $0
- Best for: Low Costs and a sleek app
Robinhood does not charge any trading commissions, but you pay a monthly fee up face for their Gold service, which gives you access to margin loans. Orders are not routed to get you the best possible bounty, so your actual trading costs are likely to be higher.
Cons
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Snapshot quotes only, no streaming
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Very mini research available
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Trades may not be routed in the customer’s best interest
tastyworks
- Account Minimum: $0
- Fees: $5.00 stock trades $1.00 alternatives trades
Bargain hunters, especially those who trade options frequently, will feel favourably impressed by tastyworks’ pricing schedule. The firm charges commissions only to open a position; closing a position is free. Tastyworks also betters 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.
tastyworks also underwent awards for Best for Day Trading and Best for Options Trading.
Cons
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Limited portfolio reporting in platform
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Platform may discombobulate new traders
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Must call a live broker for mutual funds
eOption
eOption’s low-cost, no-frills web platform furnishes speedy executions but few creature comforts. You can connect to their trading engine using Sterling Trader Pro or DAS Trader if you desire better charting and analysis.
eOption also received an award for Best for Penny Stocks.
Pros
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Great value for patronize options traders
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Ability to auto-trade newsletter alerts
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Easy to use web-based platform
Cons
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Limited education contributions
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News and research is limited
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Basic web platform feels dated
Lightspeed
- Account Minimum: $10,000 (web), $25,000 (software)
- Remunerations: Max $4.50/stock trade, $0.65/options contract. No charge per leg.
- Best for: Cost-conscious & active traders.
Lightspeed aims its technology and services at high-velocity stock and options traders. Its commission schedule is tiered, so the more you career, the less you will pay per transaction. Account minimums are high, but the cost of trading is low.
Note: Costs for frequent trader are undoubtedly to be lower if the customer switches to per-share pricing from flat-rate.
Lightspeed also received awards for Best for Opportunities Trading, and Best for Day Trading.
Pros
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Customers can route their own orders
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Very fast trade executions
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Timely, professional customer service
Methodology
Investopedia’s mission is to provide investors with unbiased, comprehensive reviews and ratings of online stockjobbers. 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 exchange executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We installed a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our incomparable scoring system.
In addition, every broker we surveyed was required to fill out a 320-point survey about all lights of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person presentations 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 profuse online investing platforms for users at all levels. Click here to read our full methodology.