When choosing an online broker for cheap stock trading, the cost of placing trades is naturally the most important factor. For this review, we not only looked at the lowest broker commissions for both stocks and options, but we also focused on brokers that were easy to use and had low minimum deposits to get started.

Trading cheaply is fairly straight forward, however investors should be careful when deciding on a final broker. The regular prices paid for stock and option trades are not the only cost factor that matters. Some other points to consider:

  1. Are there tiered commission rates? Most brokers offer a flat rate per stock trade. Some brokers though, especially active trading focused brokers, also offer a per-share rate plan. Both have their pros and cons; it really depends on the order size you are trading. Most investors (and brokers) keep it simple by sticking with a flat rate charge per trade.
  2. Are there extra charges for market data access? Some brokers will charge extra for access to market data such as level II quotes and international exchanges. Furthermore, brokers can sometimes charge monthly data fees that can only be waived if a certain commission spend threshold is met.
  3. Are there extra fees for trading penny stocks or OTCBB? Most discount brokers charge extra for penny stocks (stocks under $1 per share) and pink sheets. If you like trading these types of securities, you may be better off with a broker like TD Ameritrade or ETRADE where the costs, despite a higher regular rate per trade, are actually less expensive for trading penny stocks.
  4. Are there any inactivity fees? Inactivity fees are rare now a days, but it is still something to keep in mind. Monthly market data access fees (see point 2 above) are far more common.
  5. If opening an IRA, does the broker offer no-fee IRAs? If opening a retirement account, check to make sure you are not charged a yearly fee or an IRA closure fee. IRA Closure fees typically run around $50, and are something to keep an eye out for.
  6. What's the latest promotional offer? Make sure you are getting the best deal. Here at StockBrokers.com we update all stock broker offers daily to ensure you are getting the best deal possible for your new account.

Before choosing a broker for cheap trading, make sure to read their full broker review and compare them side by side to determine the best broker for you. Each review includes a complete commissions schedule breakdown so you can exactly what you are paying for before opening an account.

Discover more savings - To see exactly how much money can be saved by switching to one of the brokers featured above use the trade cost calculator tool to calculate potential savings over a 1, 2, or 3 year period.