Greatest Low cost Brokers of 2019

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Cost-conscious traders look for brokers with very low fees. Here are our top five brokers for low costs:


  • Interactive Brokers
  • Robinhood
  • tastyworks
  • eOption
  • Lightspeed


Bells and whistles, such as fancy charting or idea generation features? No thanks, just make trading cheap. Hand holding? Investing education? Not so much, just cut costs. Another aspect of keeping trading costs low is quality order executions. Trading engines that seek out price improvement can save money on buy orders, or find a higher price for sell orders.


We looked for brokers who offer deeply discounted trades and low margin fees. Using our regular scoring rubric, we overweighted the Costs score, kept the Trading Technology weight the same, and underweighted the remaining factors. Some brokers charge a per-leg fee for options trades, so frequent spread traders might want to look for brokers who only charge a per-contract fee. 



Interactive Brokers



  • Account Minimum: $0
  • Fees: $0.005 per share


Interactive Brokers’ order routing system is likely to find you enough price improvement to offset any trading costs. Their toolset for frequent traders helps find appropriate trades.


Interactive Brokers also received awards for Best Overall Online Brokers, Best for International Trading, Best for Options Trading, Best for Penny Stocks, and Best for Day Trading.


Pros

  • Low trading costs and margin rates

  • The platform and services are geared for active traders

  • Clients can trade on 120 markets in 31 countries, using 23 currencies

  • Good charting and portfolio analysis

Cons

  • Small or inactive accounts are subject to additional fees

  • Mosaic, the primary platform, has a steep learning curve

  • Quotes stream on only one device at a time



Robinhood



  • Account Minimum: $0
  • Fees: $0
  • Best for: Low Costs and a sleek app


Robinhood does not charge any trading commissions, but you pay a monthly fee up front for their Gold service, which gives you access to margin loans. Orders are not routed to get you the best possible price, so your actual trading costs are likely to be higher.


Pros

  • Stocks and options trade commission-free

  • Mobile app and website are very easy to use

Cons

  • Snapshot quotes only, no streaming

  • Very little research available

  • Trades may not be routed in the customer’s best interest



tastyworks



  • Account Minimum: $0
  • Fees: $5.00 stock trades $1.00 options trades


Bargain hunters, especially those who trade options frequently, will like tastyworks’ pricing schedule. The firm charges commissions only to open a position; closing a position is free. Tastyworks also caps its options fees at $10 per leg, so if you trade spreads with 20 or 30 contracts per leg, you will save a lot of money.


tastyworks also received awards for Best for Day Trading and Best for Options Trading. 


Pros

  • Very stable platform

  • Commissions charged only for opening positions

  • Excellent tools for analyzing derivatives

Cons

  • Limited portfolio reporting in platform

  • Platform may overwhelm new traders

  • Must call a live broker for mutual funds



eOption



  • Account Minimum: $500
  • Fees: $3.00 per trade


eOption’s low-cost, no-frills web platform offers speedy executions but few creature comforts. You can connect to their trading engine using Sterling Trader Pro or DAS Trader if you want better charting and analysis.


eOption also received an award for Best for Penny Stocks. 


Pros

  • Great value for frequent options traders

  • Ability to auto-trade newsletter alerts

  • Easy to use web-based platform

Cons

  • Limited education offerings

  • News and research is limited

  • Basic web platform feels dated



Lightspeed



  • Account Minimum: $10,000 (web), $25,000 (software)
  • Fees: Max $4.50/stock trade, $0.65/options contract. No charge per leg.
  • Best for: Cost-conscious & active traders.


Lightspeed aims its technology and services at high-velocity stock and options traders. Its commission schedule is tiered, so the more you trade, the less you will pay per transaction. Account minimums are high, but the cost of trading is low.


Note: Costs for frequent trader are likely to be lower if the customer switches to per-share pricing from flat-rate.


Lightspeed also received awards for Best for Options Trading, and Best for Day Trading. 


Pros

  • Customers can route their own orders

  • Very fast trade executions

  • Prompt, professional customer service

Cons

  • High minimums to open account

  • Professional platform is hard to use

  • Few creature comforts

Methodology

Investopedia’s mission is to provide investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.

In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.

Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.



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