Cheapest Online Stock Trading
Dec 15th, 2009
The cheapest online stock trading sites vary for each individual. There are so many factors that add up to the cost of trading stocks online that it is impossible to say that “broker x” is the cheapest stock trading site. Anyone who is an active trader or is looking into becoming a day trader must realize how big a factor the commissions from a stock broker are.
Commissions from your stock trading broker can add up to be an enormous expense over the course of a year. There are ways to manage the impact the commissions have on your bottom line, but there is no way to completely remove the costs of trading stocks. One of the bigger online trading sites is TD Ameritrade. They charge $9.99 per trade for unlimited shares. This is an amazing price compared to the standard broker assisted prices that were once the norm. Even with the reasonable per trade price the costs will add up quickly. If you were to make 5 trades a day (buy and sell 5 stocks a day) you would end up spending $24,975.00 over the course of a year. That assumes you make those five trades every day for 50 weeks out of the year. 25 thousand dollars is a lot of money to have to make up by trade profits. With this little example you can see just how important it is for the active trader to find the cheapest online stock trading platform possible.
If you were to sign up with a broker that charged $5.00 a trade you could save yourself over 12 thousand dollars in one year. That’s like getting a raise of over $5.00/hr for a full time job. It’s a lot of money. I’ve found a few of the cheapest online stock trading companies and have some of the criteria listed below. I don’t have any experience with sogotrade or zecco, so I can’t say anything about how well the platforms work. Any time we talk about opening a new stock trading account we recommend opening a practice stock trading account first. Try out the broker before you deposit any money. You will have to make your own decision as to the balance between cheap trading prices and the quality of the trading interface.
Trade King
Trade King offers $4.95 stock trades. This is a very good price and I’ve found the company to be very easy to work with. They have a nice community section of the site that is a good resource for new traders to learn. They also have regular webinars for education purposes. They charge $0.65 per option contract. Overall Trade King has a very solid pricing structure.
Zecco
Zecco offers $4.50 trades with $0.50 per option contract. I have no personal experience using this broker but the pricing schedule is very appealing. The prices get even better for very active traders. If you make 25 trades per month you get 10 free trades. If you carry an account balance of over $25,000 dollars you get the 10 free trades per month without any activity minimum. Very cheap trading prices indeed.
Sogotrade
Sogotrade is another discount broker that I have no personal experience with. They are the cheapest online stock trading site that I have found with trades of unlimited shares for $3.00 on stocks and ETF’s. They charge $5.00 + $0.65 per contract for option trades. Simply put this is an incredible price. I would definitely open a demo account before putting any money in, but I think they are worth checking out.
These are just a few of the cheaper online trading sites that I have found in my research. Hopefully you will be able to read some of the fine print on the sites and come to an informed decision. Always do your own research before signing up with a stock trading broker.
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