Online Broker Review 2011
For those independent investors that trade actively, the game of online trading changes, as it is more serious and, in some cases, is a full-time job. While an investor planning for retirement cares about third-party research reports and fund management fees, the active trader has his or her focus on a completely different spectrum.
Having active trading experience ourselves and knowing many active traders, we understand that commissions, site speed and ease-of-use, execution, customer service, and a robust trading platform are the focal points in an active or day trader’s world. As a result, these were our focus areas for our research, and what we ended up finding was that competition is fierce and the key to success for some firms is honing in on one area and working hard to have the best offering.
When it comes to the best platform for active traders, we found that the thinkorswim platform by TD Ameritrade* stood out as number one. The thinkorswim* platform offers traders flexibility, speed, and endless professional tools. During testing, we expanded 16 charts across our three 24" LED monitors and experienced no speed issues while performing advanced technical analysis and monitoring level II quotes and real-time sales for numerous securities. We then started to stream live CNBC coverage on our sidebar, read news on the fly, and talked stocks with other traders in the Trader Lounge, one of eight different chat rooms. What makes the thinkorswim platform really stand out, though is the technical staff managing and constantly updating the software, as well as the customer service team that’s ready to assist traders via online chat support. All in all, TD Ameritrade's thinkorswim platform* is the real deal.
For the investor looking to trade it all — stocks, options, futures, and forex — MB Trading is the broker to trade with. Competitive commissions and multiple platforms give each investor the tools, flexibility, and speed they need to handle their demanding needs. MBT Desktop Pro is offered for equities, futures, and also includes the Options Strategist tool, which we found to be one of the best offerings for trading options. From performing technical analysis with more than 100 different indicators to writing custom alert scripts, MBT Desktop Pro is a full offering. For forex trading where the broker shines the most because of its ultra-tight spreads and clear offering, MBT Metatrader 4 is available to clients. Metatrader is most widely used for front-end application in the forex industry as a whole.
Active traders who are investing internationally will find that Interactive Brokers is the leader among its peers by providing access to more than 80 different markets worldwide through its flexible platform, competitive commissions, and quality executions. While E*TRADE is also very notable in this area for international trading, active traders will find that the Interactive Brokers offers trading through more markets with lower overall costs.
As far as commissions were concerned, Lightspeed, Interactive Brokers, and MB Trading all stood out as best of class solutions for active traders. Interactive Brokers offers heavily discounted commissions for the active traders trading stocks and ETFs that Lightspeed, while still very competitive, could not match. And while Lightspeed did have the best options rates, $.60 per contract with no minimums, the broker charges $25 for each exercise or assignment, whereas Interactive Brokers is free. Looking beyond equities and options, MB Trading shined with its ultra-tight spreads, no hidden markups, and straightforward routing fees.
|Interactive Brokers||Review||Open an account|
|TD Ameritrade*||Review||Open an account|
|TradeStation||Review||Open an account|
|Lightspeed||Review||Open an account|
Lastly, it is important to note that online brokers, regardless of their size, are very aware that active traders accumulate the most commissions and ultimately bring in the most profits. Out of all the active traders we spoke with for this review, the most common theme we found was that customer service is the backbone for a long-term relationship. Top-notch customer support gives active traders the confidence that their broker is not only dependable but on their side. Most often this means that long-term, commission rates are reduced and extra services fees are also waived. Since many active traders are investing as a primary source of income, settling for just an average broker is not an option.
* - TD Ameritrade includes thinkorswim platform. Merger to be completed in 2011.