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best online trading platform

How The Major Online Brokers Stack Up

I’ve had an online stock trading account since I was 13 years old and I’ve used at least a dozen of the best online stock trading platforms. I’ve gained a few “learning experiences” from managing my own account and working as a proprietary day trader in Chicago for several years. I used that experience to dive into the best online trading platforms here.

The Simple Dollar’s Top Picks

Here are the 4 best online brokerage accounts for 2015:

OptionsHouse – Best Discount Broker (also Best Options Broker)
E*Trade – Best Trader Resources
Scottrade – Best Support and Service
TD Ameritrade – Best For Developing Traders

What Matters When You Trade Stocks on Your Own?

Managing your own money can be a stressful endeavor. To minimize this, and to minimize information overload that tends to come from watching the markets 24/7, there are a few must haves that I look for in an online broker.

Clean interface. When I trade, I want to be able to easily find my order entry ticket. I don’t want it buried under a number of drop downs. This interface should have intuitive access to see your balance, available cash, positions with real time P/L and all be easily navigated.
Quick access to basic charting. A chart tells me where the stock has been recently. I don’t trade minute to minute anymore, so I don’t need complex tools like stochastics or retracement lines. All that’s important is that I have a basic chart on a yearly, monthly, weekly, daily and intra day time period. I use a chart to see current price relative to those time periods, mainly to avoid purchasing at a bad price.
Low fees. Self explanatory.

There are over 50 online brokerages where you can open an account. Beyond the three must haves above, best online brokerage accounts aren’t just for trading stocks. Sure, many of them started as online stock trading accounts, but now they’re full-fledged trading, saving, investing, retirement planning, and banking machines.

This industry is more complex than the average person thinks. You shouldn’t just pick any online broker and sign up for an account. The best online broker for one person is often completely different for the next person. Use this resource as a guide to your decision process. Figure out what features are best for you, and make your selection.

What Makes a Great Online Broker?

I analyzed a number of elements to come to my decision on which brokers are the best. Later in this post, I provide full details on how I selected the best online brokerages.

When you take all the features, resources, trading platforms, and technology into account (while also considering every type of trader), the full-service brokers, likeE*Trade and TD Ameritrade are the best for the largest number of people.

For those simply looking to make cheap trades, I would recommend going withOptionsHouse.

If you’re a very advanced trader, high-volume trader, or a professional who manages money, I recommend going with Interactive Brokers. However, I didn’t include Interactive Brokers on my list because they’re best for a very small group of traders and the platform is very complex.

Top Qualities of Standout Online Trading Platforms

Quality trading tools and technology
Multiple trading platforms for all levels of traders
Excellent mobile trading features
Solid navigation that displays the relevant information where you want it
Quality educational resources and research for trader development

There’s more to selecting an online broker than price. You have to consider the resources you’re getting for the cost you pay per trade.

For example, my colleague, who is also an ex-trader, likes to use a combination of stock and options trade in his longer-term trading. He recently switched over to Fidelity because he really liked the cash management features, but was very disappointed by complex order entry, sub-par options execution and frustrating navigation. He’s currently making the switch to one of the brokers I profile here.

Analysis of the Best Online Brokers

OptionsHouse – Best Discount Broker

When it comes to getting a deal on a stock or options trade, it’s tough to beatOptionsHouse. Along with the low costs and fees, you’ll also have access to proprietary tools and technology. OptionsHouse isn’t a “full-service” broker like TD Ameritrade, which means you won’t find the same comprehensive financial resources and access to every investment product. OptionsHouse is good at what they do — providing very affordable trading prices, low margin rates, and unique tools for stock and options traders.

OptionsHouse Costs and Fees

Stock Trade: $4.95 for new traders, $3.95 for current traders
Options Trade: $4.95
Options Contract: $0.50
Mutual Funds Fee (Load): $9.95
Mutual Funds Fee (No-Load): $9.95
Futures Contract Cost: Not Offered
Margin Rates: 1.5%-5.0%
Minimum Deposit: $0

4 Reasons to Sign Up for OptionsHouse

Very Low Costs and Fees

If you compare OptionsHouse to the other best online stock trading firms, the cost to make a trade with TD Ameritrade and E*Trade will be about double. Simply put, if you’re looking for the best discount broker, OptionsHouse is your choice. The only other broker that’s cheaper is Interactive Brokers, but they require a $10,000 minimum deposit and their software is built for advanced traders.

Customizable Web-Based Trading Platform

The OptionsHouse web-based platform is completely customizable, meaning you can remove or add different components, minimize sections, and adjust the entire home screen to your preferences. One cool feature is that you can click on any of the components on your home screen and detach it so it shows up in a separate window. For example, if you have two monitors, or just want their charts opened separately, you can have your trade execution tools in one spot and your charts in another location.

Advanced Options Trading Tools

OptionsHouse is one of the three best options brokers (the others are optionsXpress and tradeMONSTER). Not only is OptionsHouse the cheapest for trading options, but they also provide you with an account view that enables you to look at an options calendar, options chains, and all kinds of option spreads. There are several proprietary tools that help you gain insight into your risk or exposure in addition to the quality options trading tools.

Quick Trading

For options traders and, more specifically, high-frequency traders, OptionsHouse is a solid choice because you can fire off trades with the quick-order entry ticket. If you simply type in a quote, you can instantly add a stock or option leg to a trade. Navigation is simple and everything is laid out to ensure you can move around your account efficiently while making options trades with ease.

2 Reasons to Avoid OptionsHouse

Lacking Access to Several Investment Products

If you’re someone who’s interested in trading a variety of markets or growing your trading knowledge, you probably shouldn’t open an account with OptionsHouse. As the name implies, this online brokerage is best for options traders and people who want to make cheap trades. You won’t be able to trade futures, forex, or international markets. This isn’t a big deal if you’re just looking to trade options or trade stocks for low prices.

Not a Full-Service Broker

Unlike TD Ameritrade, E*Trade, Scottrade, and other major brokers, OptionsHouse is built mostly for trading and not much else. You won’t have access to banking or comprehensive financial services, so expect to have your money split between multiple accounts versus keeping it all in one place.

OptionsHouse Is Best For:

Options Traders
High-Frequency Traders
Deal Seekers

Learn more on OptionsHouse website

E*Trade – Best Trader Resources

E*Trade is right there with TD Ameritrade and Scottrade if you’re looking for the all-around best online brokerage. What’s interesting about this comparison is that E*Trade excels in several different areas compared to TD Ameritrade and Scottrade, but also has many similar offerings. E*Trade’s web-based platform is incredibly advanced and a breeze to use, as is their mobile app. However, you have to pay for these features because E*Trade is just as pricey as TD Ameritrade and requires a $500 deposit to open an account (TD Ameritrade is free).

E*Trade Costs and Fees

Stock Trade: $9.99
Options Trade: $9.99
Options Contract: $0.75
Mutual Funds Fee (Load): Varies by fund
Mutual Funds Fee (No-Load): $19.99
Futures Contract Cost: $2.99
Margin Rates: 4.14%-8.14%
Minimum Deposit: $500

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