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Best Online Trading Platforms for Day Trading

February 7, 2018
Brokers, Investing

NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent.

We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers.

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.

One note before you begin: Pattern day traders — as defined by the SEC — must have at least $25,000 in equity in their accounts and be approved for margin trading, regardless of whether their broker’s account minimum is lower. If you can’t meet that minimum, you might want to check out our picks for the best brokerage accounts for stock trading instead.

» New to this world? Learn the basics with our guide to how day trading works.

NerdWallet’s top online trading platforms for day trading

NerdWallet rating

Fees

$4.95

per trade

Account minimum

$0

Promotion

$50-$3,500

in cash bonus with a qualifying deposit

The bottom line

Ally Invest’s robust trading platform and lineup of free research, charting, data and analytical tools make it a good choice for active traders. But it’s also appropriate for beginning investors who will appreciate that there is no account minimum and no annual fees.

Show pros & cons

Pros

  • Low commissions.

  • No account minimum.

  • Strong web-based platform.

  • Robust research and tools.

Cons

  • No commission-free ETFs.

  • No no-transaction-fee mutual funds.

Read full review
NerdWallet rating

Fees

$6.95

per trade

Account minimum

$0

Promotion

500

commission-free trades + up to $600 with qualifying deposit

The bottom line

TD Ameritrade makes up for higher-than-average trading commissions with better-than-average service, research and trading tools that will make everyone from beginner investors to active traders happy.

Show pros & cons

Pros

  • Large investment selection.

  • Free research.

  • High-quality trading platforms.

  • No account minimum.

  • Good customer support.

Cons

  • Higher trade commission.

  • Costly broker-assisted trades.

  • High short-term ETF trading fee.

Read full review
NerdWallet rating

Fees

$5

per trade

Account minimum

$500

Promotion

None available

The bottom line

TradeStation is the gold standard among active stock, options and futures investors who rely on the broker’s high-octane trading platform, reams of research and sophisticated analytical tools. The firm offers three commission plans — flat-fee, per share/per contract and unbundled pricing plan (the latter two which will be attractive to active traders). The lack of commission-free ETFs and mutual funds can be a turnoff to some investors.

Show pros & cons

Pros

  • High-quality trading platforms

  • Comprehensive research

  • Low commissions

  • Advanced tools

  • Active trader community

Cons

  • No commission-free ETFs

  • Minimum balance requirement for active trading platform

Read full review
NerdWallet rating

Fees

$0.005

per share

Account minimum

$10,000

Promotion

None available

The bottom line

Interactive Brokers is a strong option for advanced, frequent traders: The broker offers international trade capabilities, low commissions and a quality trading platform. New traders might be turned off by inactivity fees, high balance requirements and a lack of educational resources.

Show pros & cons

Pros

  • Low commissions

  • Quality trading platform

  • Advanced tools

  • Low margin rates

  • Wide investment selection

Cons

  • Inactivity fees

  • High minimum balance requirement

  • Complex pricing

  • Minimal educational resources

Read full review
NerdWallet rating

Fees

$4.95

per trade

Account minimum

$1,000

Promotion

$100

cash bonus with a qualifying deposit

The bottom line

Charles Schwab has earned its strong reputation: The broker offers high-quality customer service, two robust trading platforms and a wide selection of commission-free ETFs and no-transaction-fee mutual funds.

Show pros & cons

Pros

  • No inactivity fees.

  • Two platforms with no minimum or fees.

  • Above-average mobile app.

  • Extensive research.

  • Strong customer support.

Cons

  • Higher trade commissions.

  • Higher account minimum.

Read full review
NerdWallet rating

Fees

$3

per trade

Account minimum

$500

Promotion

None

no promotion available at this time

The bottom line

EOption’s provides an efficient, no-frills platform for active investors who prioritize low costs over a fancy platform. The savings can be significant for advanced stock and options traders who have other sources for the research and data they need.

Show pros & cons

Pros

  • Deep discount commissions

  • Low margin rates

  • Can serve international investors

Cons

  • Very basic trading platform

  • Limited data and research

Read full review


Best platforms for day trading: summary

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

Ally Invest

Ally Invest
Options trading
Free high-quality trading platform
$4.95
base + $0.65 per contract
$100 cash bonus or up to $500 in free trades with a qualifying deposit
$0

TD Ameritrade

Overall
+
Trading Platform
Top research; two powerful trade platforms; educational content
$6.95
per trade
$100 to $600 cash bonus, depending on account size
$0

TradeStation

TradeStation
Options trading
Advanced research and tools, speedy execution
$5 Per Trade + $.50 Per Contract for Options + $1.50 Per Contract Per Side for Futures
None
$500

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)

Charles Schwab

Charles Schwab
Trading Platform
Extensive research; two trading platforms
$4.95
per trade
$100 referral award for first-time clients
$1,000

EOption

Low margin rates
Attractive margin rates
$3.00
per trade
None
$500

Our rating methodology

NerdWallet’s ratings for brokers and robo-advisors are weighted averages of several categories, including investment selection, customer support, account fees, account minimum, trading costs and more. Our survey of brokers and robo-advisors includes the largest U.S. providers by assets under management, plus notable and/or emerging players in the industry. Factors we consider, depending on the category, include advisory fees, branch access, user-facing technology, customer service and mobile features. The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

Day trading FAQs

Day trading is a strategy of buying and selling assets (often stocks) over a short timeframe, often one day. The goal of day trading is to make a tiny profit on each trade, which will add up over time. Learn more about day trading.

The SEC requires that pattern day traders maintain at least $25,000 in equity in their accounts. Under the SEC rules, you’re a pattern day trader if you day-trade four or more times within five business days, and the day trades represent more than 6% of your total trading activity in that same five-day period.

Because day trading involves making a lot of trades, ideally each at an incremental profit, the associated commissions with those trades can quickly become expensive. That’s why active day traders prioritize brokers that offer low per-trade costs or offer volume discounts.

The SEC requires that pattern day traders maintain at least $25,000 in equity in their accounts (see the “rules” question above for more details). That means you should have a significant amount of money to engage in day trading, because that $25,000 should represent just a small piece of your overall investment portfolio — the bulk of which should be invested for longer-term goals such as retirement.

Four of the most common day trading strategies are:

  • Swing, or range, trading: Find a stock that tends to bounce around between a low and high price and buy when it’s near the low, then sell when the stock nears the high.
  • Spread trading: A high-speed technique to profit from temporary changes in sentiment by exploiting the bid-ask spread for a stock. This strategy entails buying when another buyer’s bid price drops suddenly, then quickly reselling at the stock’s ask price (or higher). The profit earned on the transaction is the spread.
  • Fading: With this strategy, a trader short-sells a stock whose price has gone up too quickly when buying interest starts to wane. The trader then will close that short position (by buying the stock) when the price falls.
  • Momentum, or trend, following: A trader using this strategy tries to ride the wave of a stock price that’s moving — either up or down — based on some type of news, in anticipation that the momentum will continue.

Day trading magnifies all the inherent risks of investing and should be considered a secondary strategy after investing for long-term goals. To test the waters of day trading, open a virtual or paper-trading account, available at many brokerages. Paper trading allows you to make simulated stock trades so you can learn how the market works without risking any money. You’ll also get a sense of the broker’s platform and functionality.

 

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