Best Online Trading Platforms for Day Trading 2016

February 25, 2016 Brokers, Investing
Through glass wall shot of young manager working on laptop

If you’re an active trader looking to try your hand at beating the market, you probably have a good idea of what you want in a brokerage: low costs, premium research, innovative strategy tools and a comprehensive trading platform. Below, we’ve selected the best online brokers in a variety of categories so you can choose one based on your personal priorities.

The best online brokers for day trading

These brokers are our best overall picks because of their competitive pricing and strong trading platforms and tools.

optionshouselogo 5.0-stars
  • Provides low commissions and superior trading tools, particularly for options traders. See our OptionsHouse review.
  • Commission: $4.95 per trade
  • Account minimum: $0
  • Promotion: $1,000 in free trade commissions with deposit of $5,000 or more
interactive-brokers 4.0-stars
  • Frequent traders benefit from volume discounts and one of the best trading platforms available. See our Interactive Brokers review.
  • Commission: $0.005 per share; minimum $1 and maximum 0.5% of trade value
  • Account minimum: $10,000 ($5,000 for IRAs)
  • Special terms for younger traders: Lower minimum activity and balance requirements for clients 25 and younger

OptionsHouse and Interactive Brokers have that powerful combination that every trader wants: Low commissions paired with advanced trading tools and platforms. Interactive Brokers may have an edge with traders who prefer per-share pricing and can meet the $10,000 account minimum and $10 monthly commission minimum — both of which docked the broker slightly in our star ratings. OptionsHouse offers a very competitive flat rate and no minimum balance requirement. However, the company doesn’t offer forex, while Interactive Brokers offers a very extensive investment selection, including precious metals, forex and futures options.

The best trading platforms

These brokers offer some of the most powerful trading platforms available, with no minimums or fees.  

td-ameritrade 5.0-stars
  • Provides top-tier research and two trading platforms available to all customers. See our TD Ameritrade review.
  • Commission: $9.99 per trade
  • Account minimum: $0
  • Promotion: Cash bonuses ranging from $100 for deposits of $25,000 to $99,999, to $600 for deposits of $250,000 or more
Chales Schwab 5.0-stars
  • Extensive research and two trading platforms available to all customers. See our Charles Schwab review.
  • Commission: $8.95 per trade
  • Account minimum: $1,000, waived with monthly auto-deposits of $100 or more
  • Promotion: 500 commission-free trades with deposit of $100,000 or more

Both top picks, OptionsHouse and Interactive Brokers, have strong trading platforms. But TD Ameritrade and Charles Schwab also excel here. TD Ameritrade offers what may be the best trading platform available, thinkorswim, along with Trade Architect, a second platform designed for simplicity. Charles Schwab also offers two excellent platforms: Streetsmart.com, a Web platform suitable for beginners, and StreetSmart Edge, a more advanced option with elevated charting functionality. Both brokers make all of their tools and platforms available to all customers with no trade activity or balance minimums (taking into account Schwab’s easily avoidable $1,000 account minimum).

The best online brokers for options trading

These brokers offer the most competitive pricing and strongest tools for options traders.

OptionsXpress-Logo 4.5-stars
  • Offers a large investment selection with significant discounts for high-volume traders. See our optionsXpress review.
  • Commission: $8.95 per trade
  • Account minimum: $0
  • Promotion: 50 commission-free trades with deposit of $5,000 or more
tradestation 3.0-stars
  • In-depth research, advanced trading tools and speedy, accurate order execution. See our TradeStation review.
  • Commission: $4.99-$9.99 per trade, with volume discounts available
  • Account minimum: $5,000 ($5,500 for IRAs)
  • Promotion: Save 20% on commissions for trades through September 2016

OptionsXpress and TradeStation are both superior brokers for options traders, though their appeal depends largely on trade activity and platform needs. TradeStation is for seriously committed traders: The company’s platform — which is outstanding — comes with a $99.95 monthly fee, waived only for those who in the previous month carried a $100,000 account balance or traded at least 5,000 shares, 50 options contracts or 10 round-turn futures/futures option contracts. TradeStation’s pricing also favors bulk traders, with volume discounts and either flat or per-contract fees. OptionsXpress doesn’t carry the extra fees and trade or account balance minimums, and offers similarly competitive commissions, though its trading platform isn’t as robust. Options trades at OptionsXpress are just $1.25 per contract for active traders, with a $12.95 minimum for 10 contracts or fewer.

The online brokers with the lowest margin rates

Traders who utilize margin should prioritize a broker’s margin rates in their search.

interactive-brokers 4.0-stars
  • Maximum margin rate is benchmark rate plus 1.5%. See our Interactive Brokers review.
  • Commission: $0.005 per share; minimum $1 and maximum 0.5% of trade value
  • Account minimum: $10,000 ($5,000 for IRAs)
  • Special terms for younger traders: Lower minimum activity and balance requirements for clients 25 and younger
eoption-review-logo 3.5-stars
  • Maximum margin rate of 5.25%. See our eOption review.
  • Commission: $3 per trade
  • Account minimum: $500

Our top choice for best online broker wins here, too — in fact, no one comes close to Interactive Brokers when it comes to margin rates, so if that’s your No. 1 priority, you’ll likely find your home there. The broker charges a blended rate based on account balance, but features a calculator on its website to help investors quickly do the math. As noted above, Interactive Brokers does impose monthly trade minimums. EOption has a lower minimum deposit requirement and more reasonable trade requirements, charging a $50 inactivity fee only on accounts that haven’t traded at least twice in the past 12 months or have less than $10,000 in credit or debit balances. Both brokers charge very competitive commissions for stock and options trades.


Best platforms for day trading: summary

Broker
Best
for
Highlights
Commiss-
ions
Promotion
Account minimum
Start investing

OptionsHouse

OptionsHouse
Overall
Low commissions; superior tools, particularly for options
$4.95
per trade
$1,000 in free trade commissions with deposit of $5,000 or more
$0

Interactive Brokers

Overall
+
Low margin rates
Discounts for frequent traders; max margin rate is benchmark +1.5%
$0.005
per share;
min. $1, max. 0.5% of trade value
Lower min. activity and balance limits for clients ≤25
$10,000
($5,000 for IRAs)

TD Ameritrade

Trading Platform
Top research; two powerful trade platforms; educational content
$9.99
per trade
$100 to $600 cash bonus, depending on account size
$0

Charles Schwab

Charles Schwab
Trading Platform
Extensive research; two trading platforms
$8.95
per trade
500 commission-free trades with deposit of $100,000 or more
$1,000

OptionsXpress

OptionsXpress
Options trading
Large selection; discounts for high-volume traders
$8.95
per trade
50 commission-free trades with deposit of $5,000 or more
$0

TradeStation

TradeStation
Options trading
Advanced research and tools, speedy execution
$4.99-9.99
per trade
20% off trade commissions
$5,000 ($5,500 for IRAs)

EOption

Low margin rates
Maximum margin rate of 5.25%
$3.00
per trade
None
$500

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.

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