Best Online Trading Platforms for Day Trading

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.

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

Summary: Best Online Trading Platforms for Day Trading

 

 


 

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.

TD Ameritrade 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. TD Ameritrade offers a very competitive flat rate and no minimum balance requirement. Both brokerages offer a very extensive investment selection, including futures options and forex trading, while Interactive Brokers also offers precious metals.

The best trading platforms

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

Both top picks, TD Ameritrade and Interactive Brokers, have strong trading platforms. But TD Ameritrade also excels here, as does Charles Schwab. 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 strongest tools for options traders.

Ally Invest 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. (Note: In March 2017 the company eliminated monthly service fees for its desktop, mobile and web-trading apps for non-professional subscribers on the per-trade pricing plan.) Active but low-volume options investors will probably prefer TradeStation’s per-share/per-contract commission schedule ($1 per option contract, no base or ticket charge, with a minimum one contract market or limit order).

Options traders at Ally Invest (formerly TradeKing) pay a $4.95 base plus 65 cents per contract with only one base charge per spread. They also get access to a powerful platform with no additional charge, including free options trading tools for screening and advanced charting. Navigation is intuitive, and customers can create a custom dashboard that includes the data and features they want to use. The setup extends to all devices, including mobile and tablet.

The online brokers with the lowest margin rates

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

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. (Keep in mind that margin trading maintenance and margin call rules can vary based on how much you borrow and what you’re buying.) 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

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

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

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

TradeStation

TradeStation
Options trading
Advanced research and tools, speedy execution
$5 base + $0.50/contract; volume discounts available
20% off trade commissions
$5,000

EOption

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

Learn more about day trading before diving in

What is day trading?

Day trading is buying and selling stocks within a short time frame, often inside a day. The goal is to capitalize on stocks with rapid and frequent price fluctuations. Day traders often buy a stock they expect to rise in price, or short-sell a stock they expect to fall.

Day trading isn’t for the faint of heart — it magnifies all the inherent risks of investing — and should be used as a secondary strategy, after you’ve invested for long-term goals like retirement. To learn more, read our primer on day trading.

How much money do you need to day trade?

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. Day trading, defined by the SEC, is buying and selling or short-selling and buying the same security on the same day.

In our view, that means you should have an awful lot 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 the long term.

What’s the safest way to day trade?

Our guide to how to day trade gets into advice for minimizing risk, but as a quick synopsis: Rule No. 1 is only put up money you wouldn’t mind parting with. In other words, treat day trading like gambling, not long-term investing.

Beyond that, be sure to do your research before you jump in, and establish an exit plan. It’s easy to make rash decisions when your positions start going bad, so setting rational strategies in advance can help curtail emotional reactions.

How do you learn how to day trade?

Practice. Many brokers offer virtual trading accounts that essentially let you test the waters with Monopoly money. It’s a great way to get started without the risk.

We’ve put together a list of virtual trading platforms, along with more information about how these work. We highly recommend testing out your trades on a virtual platform before putting your money on the line.

What securities are best suited for day trading?

Most day traders trade stocks, though you can day trade bonds, currencies or commodities, too. Generally, you want to look for securities that are:

  • Highly liquid, with large trade volume.
  • Relatively volatile. You want frequent price changes, which allows you to make a profit quickly.
  • Known to you. An understanding of the stock’s price history, and how it reacts to various events — earnings reports, economic shifts — is key. Many day traders trade only a few specific stocks, developing expertise in those companies and narrowing their focus.
  • Newsworthy. Coverage of a stock will trigger people to buy or sell it. As a day trader, you’ll want to follow the news to find trade ideas.

» Don’t think day trading is for you? Here are other suggestions for how to invest.

Updated Sept. 22, 2017.

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