Best brokerage account for day trading stocks and ETFs. Top platform to day trade stocks online.

Top Day Trading Accounts

Day traders and swing traders often turn to Interactive Brokers and Firstrade for the software and commission schedules the two firms provide. Here is what makes them the best brokers for day trading:

Firstrade

Stock, option, and ETF transactions are $0.00 at Firstrade. This amazing price even applies to over-the-counter securities. Exchange and regulatory fees are passed onto the trader; although these surcharges are usually just pennies per sale. Furthermore, option exercises and assignments are $14.95 each. If you’re submitting lots of trades every week, and not getting assigned or exercising contracts, Firstrade would be a huge cost advantage.

The drawback of going with Firstrade is the lack of a desktop or browser platform. Most brokers that specialize in day trading do offer one or both. Firstrade’s emphasis on budget trading makes such software cost prohibitive.


Firstrade day trading


What the brokerage firm does provide is a very good trade bar. It appears at the bottom of the browser window. During our testing, we found it easy to use. We especially like the ability to trade option contracts on it.

Option chains can be expanded from the trade bar. Multiple expiration dates and several complex strategies are available. A drop-down menu displays calendars, verticals, and a long straddle. Greek values can also be shown. Clicking on a bid or ask price automatically populates the trade bar.

Real-time trade information is displayed on the bar, which obviously will benefit day traders. These numbers include volume, bid-ask spread, last trade price, and the day’s change.

For stocks and ETF’s, the trade bar displays long and short margin requirements to enter a position. This is a handy service because some securities will have special requirements. The broker has a dedicated web page that updates this list regularly. Most stocks have an initial margin requirement of 50%, while 30% is used for maintenance.

A small graph icon appears on the trade bar. Clicking on this generates a daily graph with one-minute intervals up to 30-minutes. The graph is displayed on a new web page that sits right above the trade bar. So you can trade from the bar while looking at price action on a graph. There are a few technical indicators available, including Relative Strength Index and Bollinger Bands. During our testing, we didn’t find the software setup to be quite up to par with other trading systems; although we think it can be used for day and swing trading.

News articles can be displayed from the bar. You can access up-to-the-minute articles by clicking on a news icon. It’s also possible to access these important resources by clicking on ‘More Info’ on the bar. Using this method, links will be displayed directly on the bar.

Buying power is updated immediately after a trade. This data is shown on the right-hand side of the bar.

Firstrade Incentive to Open Account

$0 commissions + up to $200 in transfer fee rebates.

Open Firstrade Account

Interactive Brokers

IB traders have to pay commissions, but they are very low. The company has two pricing schedules for equities. The first is a fixed system that charges half a penny per share, with a $1 minimum and a maximum of 1.0% of trade value.

The second plan is a tiered schedule that varies based on monthly trade volume. An account that trades less than 300,000 shares for the month pays 0.35¢ per share. Above 10,000,000 shares, the rate drops to 0.05¢. The minimum commission is always 35¢ with a maximum of 1.0% of trade value. Interactive Brokers does impose a $10 monthly commission minimum for all US-based accounts.

Options have only one commission schedule, which is the tiered system. At all levels, the commission is less than a dollar per contract with a $1 minimum commission.

And what do traders get in return for actually paying commissions? As it turns out, quite a bit. IB has a very good desktop platform. One of the first features we noticed was a Level II window. Firstrade does not offer Level II quotes, so this is the first advantage for paying just a little more.

Moving onto the trade ticket, we also get direct-access routing, another service not available at Firstrade. The default destination is SMART, which allows an IB software program to choose the market maker or ECN. The drop-down menu reveals several venues, including BATS, CBOE, ARCA, and PSX.


IB day trading


But that’s not all. The order form also delivers a lot of advanced order types. These include one cancels other (OCO), midprice, snap market, adaptive, on-the-close, and more. As with Firstrade, stop and trailing orders are integrated. And these of course are musts for day traders.

Another great feature on the IB platform is hot keys. These can be adjusted if you don’t like the defaults. Available choices include stop loss, bracket, and profit taker.

Charting on the platform delivers over a hundred technical studies, far more than Firstrade provides. A graph can also be expanded the width of the monitor, or kept in a smaller window next to the trading ticket.

Margin at Interactive Brokers is as follows: initial is set at 50%, while maintenance is a lower 25%. A really nice feature on the IB platform is a margin check tool located on the trade ticket. Just click on ‘Advanced’ and then select ‘Check Margin.’ A pop-up window will display the impact on trading the security in question. It will also display the margin requirements for that particular security. As with Firstrade, margin requirements can vary based on the particular instrument.

Open Interactive Brokers Account

Open account and get $200 for a friend you refer.

Open IB Account

Final Thoughts and Recommendations

Firstrade is the ideal choice if you want the lowest possible commissions and are willing to sacrifice trading tools. While it is possible to use Firstrade’s charting software, it does not lend itself easily to day trading with technical studies.

Interactive Brokers’ software is on a professional level, which means there is some learning curve involved; but once you get down the basics, it delivers some very powerful tools.

Another noteworthy advantage IB offers over Firstrade is futures and forex trading. These instruments are well suited to day and swing trading.


Firstrade


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