This article comes from DR at The Dough Roller, a blog about how to make more money, spend less, and invest the rest.
As investors have become more and more comfortable trading stocks and options over the Internet, a number of online discount brokers have entered the market. Zecco was one of the first and best known for offering free stock trades. Today, there are many options for deep discount brokers. To give you an idea of what’s available, we’ve put together a list of seven brokers that offer stock trades for $7 or less.
As you evaluate these brokers, keep in mind two things. First, it is important to know what types of equities you plan to purchase. For example, if you plan to buy mutual funds, realize that not all discount brokers trade in mutual funds, and those that do don’t always offer a complete list of mutual funds to chose from. So know what you plan to invest in, and make sure the online broker you select offers those investments. Second, these brokers really do have feature-rich websites. They are easy to use and offer a lot of research and trading tools. You’ll also find instructional videos with most discount brokerage firms. You’ll likely find one that fits your investing style best, but fortunately you won’t have to sacrifice features with the available online brokers.
So with that, here are 7 brokers that offer stock trades for $7 or less:
Sogotrade is relatively new to the world of discount brokers, and this is good news for investors. In an effort to win investors’ business, Sogotrade charges just $3 per trade for stocks. As far as I know, $3/trade is one of the cheapest online stock trading you’ll find. And when you open a new account, you get 100 free trades during the first 30 days your account is open, for a savings of up to $300.
While $3 per trade is great, $2.50 is even better. And that’s exactly what Just2Trade charges. Whether you want to trade stocks or mutual funds, or limited, open or stop orders, the cost is $2.50. While Just2Trade does over online trading tools and resources, this is a no frills online discount broker. But if you are looking for rock bottom prices, Just2Trade is definitely worth considering.
With OptionsHouse, you can trade stocks, options or spreads. The cost to trade stocks is a flat $2.95. There are no maintenance fees or monthly minimums, either. According to OptionsHouse, it offers a professional-grade trading platform backed by PEAK6 Investments, one of the largest options trading firms in the world. It is from this platform that OptionsHouse offers an array of professional trading tools. For my money, OptionsHouse offers a good mix of low cost trades and a feature-rich trading site.
Trade King is another great low cost option, with stock trades costing $4.95. One of the big advantages offered by TradeKing is broker-assisted trades for not additional cost. Many other discount brokers charge up to $30 for an assisted trade. TradeKing has been ranked #1 in customer service by SmartMoney Magazine and Kiplinger’s. TradeKing also offers a Trader Network, which allows you to connect with other traders, share strategies and trading tips, and see the hottest trades of the day.
LowTrades charges $4.95 per stock trade, regardless of whether you place an open market order, limit order, or stop order. There is a $500 minimum to open an account ($2000 for margin accounts). While there is no minimum for a cash account, there is a monthly “trading desk fee” for accounts with less than $500 in equity.
Zecco is well known for offer completely free trades. With Zecco, you can get 10 free trades a month if you maintain a balance of at least $25,000 or trade at least 25 times a month. And paid trades cost just $4.95. On top of that, the Zecco website is extremely easy to use, and it has a lot of educational videos to help investors use the site and become better at stock trading.
Scottrade rounds out our list of deep discount brokers. With Scottrade you get stock trades for $7 per trade Scottrade ranked well in Smart Money’s 2009 survey, and it offers a number of account types, including IRAs and other retirement accounts. Scottrade does not charge opening, closing, annual or custodian fees. And unlike many other online discount brokers, Scottrade has physical branches if you need to speak to a representative in person. The account minimum is just $500.