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Best Day Trading Platforms for 2020

Blain Reinkensmeyer

The StockBrokers.com best online brokers 2020 review (10th annual) took six months to complete and produced over 30,000 words of research. Here's how we tested.

Day Trading, which is buying and selling shares during the same trading session, exploded in popularity back in the booming stock market of the 1990s. Everyone was trying to get in and out of securities and make a profit on an intraday basis. After the dot-com market crash in 2000, the SEC and FINRA established the “Pattern Day Trader” rule in 2001, which increased the requirements to day trade in an effort to better protect consumers.

To day trade today, you have at least $25,000 to comply with the Pattern Day Trader rule. Traders must also meet margin requirements. The government put these laws into place to protect investors. Bottom line: day trading is risky.

To day trade effectively, you need to choose a day trading platform. As a day trader, you need a combination of low-cost trades coupled with a feature-rich trading platform and great trading tools. Price isn't everything; therefore, many day traders are willing to pay more to get the tools they need to trade more efficiently.

Best Trading Platforms

Here's a breakdown of some of the best online brokers for day trading.

TradeStation

Best platform technology - Open Account
Promo Offer: Commission-Free Trades on Stocks, ETFs & Options Trades

As a trading technology leader, TradeStation shines, supporting traders through its web-based platform as well as its desktop platform, which we rated No. 1 for Platform Technology. Both are excellent. Tools in the TradeStation arsenal include Radar Screen (real-time streaming watch lists with 329 customizable columns), Scanner (custom screening), Matrix (ladder trading), and Walk-Forward Optimizer (advanced strategy testing), among others. Using TradeStation's proprietary coding language, EasyLanguage, traders can even code their own apps for the platform and make them available in TradeStation's own TradingApp Store. Read full review

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TD Ameritrade

Best desktop platform - Open Account
Exclusive Offer: Get up to $375 and trade commission-free with TD Ameritrade.

TD Ameritrade thinkorswim is our No. 1 desktop platform for 2020 and is home to an impressive array of tools. Highlights include virtual trading with fake money, performing advanced earnings analysis, plotting economic (FRED) data, charting social sentiment, backtesting, and even replaying historical markets tick-by-tick. TD Ameritrade also enables traders to create and conduct real-time stock scans, share charts and workspace layouts, and perform advanced options analysis. Read full review

Interactive Brokers

Best for professionals - Open Account
Exclusive Offer: New clients that open an account today receive a special margin rate.

As our top pick for professionals in 2020, the Interactive Brokers Trader Workstation (TWS) platform offers programmable hotkeys and a slew of order types for placing every possible trade imaginable, including algorithmic orders. Popular among the institutional community, including hedge funds, Interactive Brokers isn't beginner-friendly but does offer the lowest margin rates in the industry. Just beware, Interactive Brokers requires a $100,000 minimum deposit for margin accounts. Read full review

Fidelity

Best order execution - Open Account
Trade Commission-Free: No commissions to trade online U.S. stocks, ETFs, and options.1

Fidelity was ranked first overall for order execution, providing traders industry-leading order fills alongside a competitive platform. For day traders, Active Trader Pro (ATP) is Fidelity’s flagship desktop platform, and includes several unique, in-house brewed tools, including Real-Time Analytics (streaming trade signals) and Trade Armor (real-time position analysis). Read full review

ETRADE

Best web-based platform - Open Account
Current Offer: $0 Commissions for online stock, ETF, & options trades. Join E*TRADE today!

Built as a web-based platform, Power E*TRADE innovates and delivers speed, ease of use, and the tools needed for traders to succeed. Once again, in our 2020 Review, Power E*TRADE won our award, "Best Web-Based Platform." E*TRADE also took our top spot for options trading. Read full review

Day Trading Platform Features Comparison

Is there a specific feature you require for your trading? Popular tools used by day traders include ladder trading, level II quotes, trade hot keys, direct market routing, stock alerts, streaming time & sales, and strategy backtesting, among many others.

Lucky for you, StockBrokers.com operates the largest verified database on the web for online brokerages. For a deeper comparison of 150+ features, use our online brokerage comparison tool.

Feature TradeStation
Open Account
TD Ameritrade
Open Account
Interactive Brokers
Open Account
Fidelity
Open Account
Stock Alerts - Basic Fields Yes Yes Yes Yes
Stock Alerts - Advanced Fields Yes Yes No Yes
Streaming Time & Sales Yes Yes Yes No
Streaming TV No Yes Yes Yes
Direct Market Routing - Stocks Yes Yes Yes Yes
Direct Market Routing - Options Yes Yes Yes Yes
Ladder Trading Yes Yes Yes No
Trade Hot Keys Yes Yes Yes Yes
Level 2 Quotes - Stocks Yes Yes Yes Yes
Level 2 Quotes - Options Yes Yes Yes Yes
Trade Ideas - Backtesting Yes Yes Yes No
Short Locator Yes No Yes Yes
Order Liquidity Rebates Yes No Yes No


What is a day trading?

FINRA rules define a day trade as, "The purchase and sale, or the sale and purchase, of the same security on the same day in a margin account. This definition encompasses any security, including options. Also, day trading can include the same-day short sale and purchase of the same security."

Day trading is a strategy in which stock traders buy and sell throughout the day with a goal of making small profits with each trade. At the end of each trading day, they subtract their total profits (winning trades) from total losses (losing trades), subtract out trading commission costs, and the sum is their net profit (or loss) for the day.

How much money do I need to day trade?

To day trade, traders must maintain an account balance of at least $25,000 to comply with the Pattern Day Trader rule, which grants them access to 4:1 margin during the day. It is important to remember, day trading is risky.

What is a "pattern day trader"?

FINRA rules define a pattern day trader as, "Any customer who executes four or more 'day trades' within five business days, provided that the number of day trades represents more than six percent of the customer's total trades in the margin account for that same five-business-day period."

Why does the pattern day trading rule require $25,000?

The SEC believes that while all forms of investing are risky, day trading is an especially high risk practice. The pattern day trader rule was said to be put in place to limit potential losses and protect the consumer.

As a result, the pattern day trader rule is enforced by every major US online brokerage, as according to law. The SEC believes that those whose account value is less than $25,000 are more likely to be less sophisticated traders. After the dot-com market crash, the SEC and FINRA decided that previous day trading rules did not properly address the inherent risks with day trading.

How do I choose a day trading platform?

All in all, finding the right platform for day trading first requires understanding the laws and making sure you have at least $25,000 for Pattern Day Trader status. Next, ask yourself, “How important are low trading commissions?” and, “How important are tools?” Assume that lower trade costs usually mean less quality in such areas as research, trading tools, mobile trading apps, or ease of use. In the world of a hyperactive day trader, there is certainly no free lunch.

Which brokers offer market rebates for adding liquidity?

Interactive Brokers, Lightspeed, TradeStation, Cobra Trading, and SpeedTrader all offer what are known as “unbundled” rates, which means they pass 100% of all market rebates (or charges) for adding (or taking) liquidity back to their clients. Many market exchanges (examples include Citadel, Bats, and KCG (Virtu)) will pay your broker for routing your order to them. These rebates are usually no more than a tenth of a penny or two per share, but they add up. See: Order Execution Guide.

Using a broker such as Lightspeed, routing a 1,000-share buy limit order on the NYSE will currently net you $0.0014 per share. Lightspeed’s base rate is $.0045 per share, so the original $4.50 trade now becomes only $3.10, thanks to a $1.40 rebate from the NYSE. This represents a savings of 31 percent. Note, however, this goes both ways, as routing a straight market order to the NYSE instead would incur a charge of $.0027 per share, thus increasing the cost of the trade.

Read Next

Explore our other online trading guides:

Methodology

For the StockBrokers.com tenth annual best online brokers review published in January 2020, a total of 3,540 data points were collected over six months and used to score brokers. This makes StockBrokers.com home to the largest independent database on the web covering the online broker industry.

Participation is required to be included. Each broker completed an in-depth data profile and provided executive time (live in person or over the web) for an annual update meeting. Our rigorous data validation process yields an error rate of less than .001% each year, providing site visitors quality data they can trust. Learn more about how we test.

Still aren't sure which online broker to choose? Email us a question! Whether you are a beginner investor learning the ropes or a professional trader, we are here to help. Email us your online broker specific question and we will respond within one business day.

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Blain Reinkensmeyer

About the author: As Head of Research at StockBrokers.com, Blain Reinkensmeyer has 18 years of trading experience with over 1,000 trades placed during that time. Referenced as a leading expert on the US online brokerage industry, Blain has been quoted in the Wall Street Journal, The New York Times, Forbes, and the Chicago Tribune, among others.


All pricing data was obtained from a published web site as of 01/20/2020 and is believed to be accurate, but is not guaranteed. For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.

TD Ameritrade, Inc. and StockBrokers.com are separate, unaffiliated companies and are not responsible for each other’s services and products. View terms.

1$0.00 commission applies to online U.S. equity trades, exchange-traded funds (ETFs), and options (+ $0.65 per contract fee) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). There is an Options Regulatory Fee (from $0.03 to $0.05 per contract), which applies to both option buy and sell transactions. The fee is subject to change. Other exclusions and conditions may apply. See Fidelity.com/commissions for details. Employee equity compensation transactions and accounts managed by advisors or intermediaries through Fidelity Clearing & Custody Solutions® are subject to different commission schedules.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

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