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Online Broker Features & Fees Glossary

Blain Reinkensmeyer

Jan 10, 2022

This page summarizes 21 of the most common online broker features and fees. For a deeper dive, use the online broker comparison tool.

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Stock and Options Trading Fees

Guides: 5 Best Online Brokers, 6 Best Brokers for Free Trading, 5 Best Options Brokers, 5 Best Penny Stock Brokers.

Minimum Deposit: The minimum amount of money required to open a new online brokerage account. While most brokers do not require a minimum deposit to open a new account, some do.

Stock Trade Fee (Flat): Flat fee trading means the broker charges a single rate no matter how many shares are purchased or what stock is purchased. This is the model most brokerages use.

Stock Trade Fee (Per Share): A per share rate means that a price is charged for every share traded. Most day trading brokers use this commission structure. Since most brokers do not offer a per share commission plan, these brokers are listed with "N/A" throughout the site.

Broker Assisted Trade Fee: When clients do not have access to the internet, or are trying to trade a specialty security, a broker assisted trade can be placed via phone to execute the order. Broker assisted trades are different than Interactive Voice Response, or IVR, trades. IVR trades allow clients to simply use their phone to place a trade without human assistance, whereas a broker assisted trade is placed by a licensed broker live.

Mutual Fund Trade Fee: The commission charged to place a mutual fund trade depends first on the type of fund you are trading. No Transaction Fee, or NTF, mutual funds do not carry a trade fee, for example, but an early redemption fee may be charged if you sell the fund too quickly (typically within 60 to 90 days). The online broker mutual fund trade costs listed below are the standard published rates listed by the brokers and cover the majority of mutual funds including load and no-load funds. Note that some online brokerages do not offer mutual fund trading at all.

Options Trading Base Fee: When trading options online through an online brokerage, most brokers will charge a base fee per trade plus a per contract fee. Other brokers, specifically day trading brokers, typically charge only a per contract fee and no base fee. Brokers that do not charge a base rate are listed as "$0.00" throughout the site.

Options Trading Per Contract Fee: Most online brokers charge a base option fee and then a commission for each individual contract. Some brokers have multiple tiers or several different commission structures for options trading to give clients flexibility in their rates depending on how many contracts they trade.

Options Trading Exercise Fee: Online brokers charge an exercise fee to long option holders when they exercise their rights to buy or sell the underlying shares that each options contract represents. Because all options expire worthless if not exercised, when you hold an options contract, it can either be exercised automatically upon expiration by your broker, or you can direct your broker to do so manually at any time; in either case the exercise fee is charged. For example, if you hold a long put (right to sell) or call (right to buy), you can exercise those rights; but if you are short a call or put, the holder who purchased those contracts from you retains the exercise right and will incur any related fees.

Options Trading Assignment Fees: Online brokers charge an assignment fee to short option holders whose positions (short call or short put) have become exercised by their underlying holders (that is, the buyer of the long call or long put). Remember, for every option trade there is a buyer and a seller, so if you are short an option, there is someone out there who is long that option and who could exercise. An assignment is an obligation for you to deliver shares — lend them to a seller or sell them to a buyer — when you hold a short options position.

Feature Ally Invest Charles Schwab
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Minimum Deposit $0.00 $0.00 $0.00
Stock Trades $0.00 $0.00 $0.00
ETF Trade Fee $0.00 $0.00 $0.00
Mutual Fund Trade Fee $9.95 $49.95 $19.99
Options (Base Fee) $0.00 $0.00 $0.00
Options (Per Contract) $0.50 $0.65 $0.65
Futures (Per Contract) N/A $2.25 $1.50
Broker Assisted Trade Fee $20.00 $25.00 $25.00

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Margin Trading Fees

Guides: Best Brokers for Day Trading

Margin Interest Rate: Margin is money borrowed from a stock broker to purchase stocks, ETFs, options, or other investments. By borrowing money on margin, traders can increase their position size. The margin rate is the interest rate brokers charge for the portion of funds borrowed. For example, the US standard margin leverage is 2:1, meaning you can borrow $1 for every $1 you invest. So, if you buy $100 worth of stock, your online broker will provide you an additional $100, for a total of $200 to invest.

Margin Trading Fee: Beyond the standard commission rate (nearly all brokers offer $0 trades), online brokers do not charge a fee for trading stocks, ETFs, and similar instruments on margin. Instead, they charge an interest rate on the net balance borrowed. For example, if you buy $2,000 worth of Apple (AAPL) stock, with $1,000 of it borrowed on margin, you will pay interest on the $1,000 borrowed.

Margin Call: When traders use leverage to buy shares of stocks, ETFs, or trade options on margin, they can be subject to a margin call from their online broker. A margin call occurs when the trader no longer has enough personal capital in the position to offset the unrealized losses due to the trade going sour. For example, if you short $1000 of stock XYZ at $10 ($500 cash, $500 margin), and it trades up to $20, you now owe not only the original $500 borrowed, but also an additional $1000 from the position doubling in price. Unless you deposit additional cash funds into your brokerage account, your online broker will likely issue a margin call, and force liquidate the position.

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Under $24,999.99 7.75% 8.33% 8.95%
$25,000.00 to $49,999.99 7.50% 7.83% 8.45%
$50,000.00 to $99,999.99 6.75% 6.88% 7.95%
$100,000.00 to $249,999.99 5.50% 6.83% 7.45%
$250,000.00 to $499,999.99 4.50% 6.58% 6.95%
$500,000.00 to $999,999.99 4.00% 5.08% 6.45%
Above $1,000,000.00 3.25% 4.75% 5.45%

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Beginner Trading Features

Guides: Best Brokers for Beginners

Virtual Trading: Not every investor is ready to jump right in the water and trade stocks and options with real money. Because of this, online brokers will often offer virtual trading so users can practice trading first. With virtual trading, also known as paper trading, investors are given a practice portfolio of fake money alongside access to the broker's trade platform. Using delayed quotes, users can then trade both stocks, options, and even forex and futures if they're offered.

Feature Ally Invest Charles Schwab
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Education (Stocks) Yes Yes Yes
Education (ETFs) Yes Yes Yes
Education (Options) Yes Yes Yes
Education (Mutual Funds) Yes Yes Yes
Education (Bonds) Yes Yes Yes
Education (Retirement) Yes Yes Yes
Retirement Calculator No Yes Yes
Investor Dictionary Yes Yes Yes
Paper Trading No No Yes
Videos No Yes Yes
Webinars (Monthly Avg) 15 100 30
Webinars (Archived) Yes Yes Yes
Progress Tracking No No No
Interactive Learning - Quizzes No No Yes

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About the Author

Blain Reinkensmeyer

As Head of Research at, Blain Reinkensmeyer has 20 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, the Chicago Tribune, and Fast Company, among others.

All pricing data was obtained from a published web site as of 01/10/2022 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.

1 Fidelity Sell orders are subject to an activity assessment fee from $0.01 to $0.03 per $1,000 of principal. 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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