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Best Brokers for Order Execution of June 2024

Sam Levine, CFA, CMT

Written by Sam Levine, CFA, CMT
Edited by Carolyn Kimball
Fact-checked by Steven Hatzakis
Reviewed by Blain Reinkensmeyer

March 04, 2024

If your broker isn’t charging you a commission on your trades, how can it stay in business? Zero-dollar commissions may seem like a big deal to us investors, but securities brokerages still have several other ways to make money.

Examples include loaning money to margin investors, lending out securities to sell short, or charging fees for incidentals, debit card swipes, or bringing new securities to the market. And there’s also payment for order flow, which might be affecting the prices you pay and receive for your stocks. Though PFOF accounts for only a few pennies per trade, we think the principle of putting clients first matters.

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Since 2009, we've helped over 20 million visitors research, compare, and choose an online broker. Our writers have collectively placed thousands of trades over their careers. Here's how we test.

Best Brokers for Order Execution

  • Fidelity - Best overall order execution
  • Interactive Brokers
    - Best order execution for professionals
Fidelity
5/5 Stars 5.0 Overall

Best overall order execution

Minimum Deposit$0.00
Stock Trades$0.00
Options (Per Contract)$0.65

Fidelity offers everyday investors uncomplicated access to $0 commission stock and ETF trades and it does not accept payment for order flow (PFOF). Read full review

Pros
  • Excellent research and mobile app
  • Top-notch education
  • Decades of reliable client service
Cons
  • No dedicated mobile app for active trading
Interactive Brokers
4.5/5 Stars 4.5 Overall

Best order execution for professionals

Minimum Deposit$0.00
Stock Trades$0.00
Options (Per Contract)$0.65

Interactive Brokers offers the most complete international trading experience, providing traders access to global markets (135 market centers in 33 countries). Additionally, professionals can take advantage of industry-leading commissions, which includes the lowest margin rates across all balance tiers. Read full review

Pros
  • Astounding array of customizable tools
  • Allows trading in foreign markets
  • Convenient apps for individual investors
Cons
  • Restrictive trading permissions
  • Main platforms might feel cold
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Winners Summary

Best overall order execution - Fidelity

Company Minimum Deposit Stock Trades Options (Per Contract) Offers Visit Site
Fidelity logoFidelity $0.00 $0.00 $0.65 Read Review

Fidelity offers everyday investors uncomplicated access to $0 commission stock and ETF trades and it does not accept payment for order flow (PFOF). Fidelity is also an industry standout for its great trading tools, industry-leading research, and feature-rich trading app. Read review.

Best order execution for professionals - Interactive Brokers

Company Minimum Deposit Stock Trades Options (Per Contract) Offers Visit Site
Interactive Brokers logoInteractive Brokers $0.00 $0.00 $0.65 New clients, special margin rates. Visit Site

Interactive Brokers offers the most complete international trading experience, providing traders access to global markets (135 market centers in 33 countries). Additionally, professionals can take advantage of industry-leading commissions, which includes the lowest margin rates across all balance tiers. Read review.

FAQs

What is PFOF?

One lesser-known way brokers make money is through referring your orders to market centers that pay them a referral fee, called payment for order flow (PFOF).

PFOF comes out of the tiny profits trading venues make between the bids and the offers for stocks. It might be as low as a few pennies per trade, but that can add up quickly to millions of dollars a year for brokers routing thousands of trades a day. PFOF is a hot topic because, in theory at least, brokers should be trying to execute your orders at the best prices they can get you instead of routing them to the market center that might pay the most.

To get a better grip on PFOF, let’s look at how a stock trade works. When you push the “submit order” button to trade, your order won’t go directly to an exchange. Instead, your broker electronically directs it to one of a variety of different market centers (which might include market makers, exchanges, alternate trading systems, electronic communication networks, or possibly even the broker itself). Then the order is filled, usually in a fraction of a second.

What is order execution quality?

Order execution quality is how much you pay or receive on a trade compared to the nationally published quote on a security, called the National Best Bid and Offer (NBBO). If you buy a stock less than the current offer, you are getting a high quality fill, and the more you save, the higher quality it is. The same relationship holds for selling stock. If you receive more per share than the published bid price, you are getting a high quality fill.

What is price improvement?

Price improvement means that your buy or sell order was filled at a price better than the National Best Bid and Offer (NBBO), which is the highest bid and the lowest offer for a stock at any moment. For a detailed, streaming real-time view of what the current bid and ask is for any stock, traders use Level 2 quotes.

What is SEC Rule 606 reporting?

Rule 606 reports show where brokers are routing their trades and how much payment from order flow they receive from market centers. The SEC requires each broker to file a Rule 606 report quarterly.

The two most important categories of information are, first, a table showing which market centers received orders and their respective share; and second, the payment for order flow (PFOF) the broker receives, on average, from each market center.

Unfortunately, Rule 606 reporting isn’t standardized well. There’s no universal measure that can be pulled and used to conduct an apples-to-apples comparison between PFOF brokers.

Why does PFOF matter?

Brokers, by regulation, have to execute your market orders at the best published price, officially known as the National Best Bid and Offer (NBBO), but there are often better prices available than the published price. By better, we’re talking pennies per share.

But why are there hidden prices? The reason is that huge traders, like mutual funds and pension plans, don’t like to give away their intentions. If word got out that a large mutual fund planned to buy a huge block of a company’s stock, other investors would pile in, driving the stock price up. And that would hurt the fund’s performance.

When brokers are able to get better prices than the NBBO, they report that as “price improvement.” Brokers advertise price improvement as one of the services they offer, but the amount of price improvement they get could be influenced by how aggressively the broker prioritizes PFOF over most price improvement.

Do all brokers use PFOF?

Not all brokers use PFOF, and the amount of payment per share varies across brokers. Fidelity is one broker that doesn’t accept PFOF, and it has repeatedly won a spot in our top picks for order execution. On the other side of the spectrum, Robinhood was being paid as high as 71 cents per market order of 100 shares, according to its Q4 2023 Rule 606 report.

Does order size impact order execution?

It’s not yet clear how much order size impacts execution. According to a Nasdaq blog post, exchanges don’t differentiate between round and odd lots, but algorithmic and routing traders do tend to emphasize round lots for stocks under $500 per share. We think choosing and holding the right stocks for the right length of time will have a far bigger impact on your success than concerning yourself about only buying in round lots.

Which broker has the best order execution?

For everyday investors, Fidelity offers the best order execution quality. For professional traders, Interactive Brokers, under the IBKR Pro commissions plan, offers the best order execution quality.

Which broker has the fastest order execution time?

In our testing, tastytrade’s downloadable platform stood out as lightning-fast. We think speed played a part in every decision tastytrade made while developing its platform. But we can’t say for certain which broker has the fastest execution, because internet connectivity plays a very large role.

Can brokers trade against their customers?

Some brokers might claim they don’t accept PFOF, but they trade against you instead. Operating a market maker and using an algorithm to pick and choose which customer orders you want to bet against certainly sounds like a losing proposition for the customer. However, as long as the broker meets the Best Execution standards, it's perfectly legal, and it's not technically PFOF. In our view, this sure sounds like profiting from order flow.

How the industry interprets the definition of PFOF is subject to much debate. For example, with options trading, if you think about "payment" more broadly as "profiting," then all brokers accept PFOF for options. More specifically, if the online broker receives rebates from the exchanges they route their customer options traders to (which they all do), then they are profiting from their customer order flow. So, isn't that PFOF? Our take is that yes, it is, but technically speaking, it's debatable.

What about equities, you may ask. Well, that's a bit more complicated. Some online brokers own and operate an Alternative Trading System (ATS). These firms technically do not accept PFOF; however, the ATS of each firm is a separate legal entity and is undoubtedly not operated as a nonprofit. So, are they generating revenue from their order flow? How does the overall order quality compare to other brokers who do not operate an ATS? In most cases, we believe these ATSes benefit customers, but we don't know with certainty.

Similarly, some online brokerages own and operate a market maker. In their disclosures, they acknowledge that they can internalize orders, meaning trade against their own customer orders. As a result, they keep any profit or loss realized from the trade. That also sounds like a losing proposition for the customer. However, as long as the broker meets the Best Execution standards, it's perfectly legal, and it's not technically PFOF. In our view, this sure sounds like profiting from order flow.

How do I get the best order execution?

A variety of factors come into play with your broker’s ability to provide quality order execution. If you’re trading large amounts of shares frequently, best execution is critical. Interactive Brokers’ sophisticated order routing algorithms make the broker a favorite for professionals. If you’re trading a few hundred shares a few times a year, you don’t need a library of algorithms to get satisfactory execution.

Here’s a list of factors in your control that directly impact execution quality:

  • The stock that's being traded. Companies in the S&P 500, for example, all boast extremely large market caps (they’re worth billions) and high average daily volumes of millions of shares per day. This means there is a lot of liquidity (buyers and sellers), which translates into consistently tight spreads (the difference in price between the bid and the ask). On the flip side, a micro-cap stock (or a penny stock traded on a non-major market, e.g. OTCBB) that trades only 10,000 shares per day, on average, has little liquidity. As a result, spreads are often very wide, which means you are less likely to obtain a quality fill on your order.
  • Time of day. The first 15 minutes of each trading day are statistically the most volatile, meaning stocks fluctuate the most during these times. More specifically, bid / ask spreads are wider, on average. Similarly, pre- and post-market hours have much wider spreads, including far less liquidity, as compared to regular market hours.
  • Order type. The most commonly used order type is a market order, which basically says, “buy or sell these shares immediately at whatever the best current market price is.” Limit orders, the second most commonly used order type, on the other hand, say, “buy or sell these shares only at the price I set, or better.” As one can imagine, limit orders may sometimes take longer to fill (if they fill at all), but, compared to a market order, have a better chance of being filled at a better price.
  • Order size. According to the Wall Street Journal, "nearly half of all trades in the U.S. stock market are in odd-lot sizes—in which fewer than 100 shares change hands." However, regulation does not currently cover these odd lot orders. Trading using round lots instead of an odd lot may result in a cleaner fill from your online broker.

Our Research

Why you should trust us

Sam Levine, CFA, CMT, the lead writer for StockBrokers.com, has over 30 years of investing experience and actively trades stocks, ETFs, options, futures, and options on futures. He's held roles as a portfolio manager, financial consultant, investment strategist and journalist. He holds the Chartered Financial Analyst (CFA) and the Chartered Market Technician (CMT) designations and served on the board of directors of the CMT Association.

Blain Reinkensmeyer, head of research at StockBrokers.com, has been investing and trading for over 25 years. After having placed over 2,000 trades in his late teens and early 20s, he became one of the first in digital media to review online brokerages. Blain created the original scoring rubric for StockBrokers.com and oversees all testing and rating methodologies.

For this guide:

  • Whenever possible, we used our own brokerage accounts for testing. For several brokers, we used a test account that was provided to us.
  • We fully tested the platforms of 17 U.S. online stock brokers, including placing trades for a variety of instruments.
  • We considered publicly available execution data.

How we tested

Since there is no single universal industry metric yet that identifies order execution quality, we focused our evaluation primarily on payment for order flow and each broker’s process for routing orders to achieve price improvement. Publicly available data, including third-party industry reports, SEC 606 reports, and self-reported execution data from each broker were also taken into consideration. Finally, it should be noted that all order sizes were considered relevant, from less than 100 shares to 1000+ shares or more.

StockBrokers.com uses a variety of computing devices to evaluate trading platforms. Our reviews were conducted using the following devices: iPhone 12 Pro, iPhone 15 Pro Max, MacBook Pro M1 with 8 GB RAM running the current MacOS, and a Dell Vostro 5402 laptop i5 with 8 GB RAM running Windows 11 Pro. In testing platforms and apps, our reviewers place actual trades for a variety of instruments.

As part of our data check process, we sent a data profile link to each broker summarizing the data we had on file and the data they provided us last year, with a field for entering any data that had since changed. For the brokers that filled out these profiles, we audited the information for any discrepancies between our data and the broker’s data to ensure accuracy.

As part of our review process, all brokers had the opportunity to provide updates and key milestones in a live meeting that took place in the fall. Meetings with broker teams also took place throughout the year as new products rolled out. Insights gathered from these calls helped steer our testing efforts to ensure every feature and tool was assessed.

Trading platforms tested

We tested 17 online trading platforms for this guide:

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About the Editorial Team

Sam Levine, CFA, CMT
Sam Levine, CFA, CMT

Sam Levine has over 30 years of experience in the investing field as a portfolio manager, financial consultant, investment strategist and writer. He also taught investing as an adjunct professor of finance at Wayne State University. Sam holds the Chartered Financial Analyst and the Chartered Market Technician designations and is pursuing a master's in personal financial planning at the College for Financial Planning. Previously, he was a contributing editor at BetterInvesting Magazine and a contributor to The Penny Hoarder and other media outlets.

Carolyn Kimball
Carolyn Kimball

Carolyn Kimball is managing editor for Reink Media and the lead editor for the StockBrokers.com Annual Review. Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. She specializes in coverage of personal financial products and services, wielding her editing skills to clarify complex (some might say befuddling) topics to help consumers make informed decisions about their money.

Steven Hatzakis
Steven Hatzakis

Steven Hatzakis is the Global Director of Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.

Blain Reinkensmeyer
Blain Reinkensmeyer

Blain Reinkensmeyer has 20 years of trading experience with over 2,500 trades placed during that time. He heads research for all U.S.-based brokerages on StockBrokers.com and is respected by executives as the leading expert covering the online broker industry. Blain’s insights have been featured in the New York Times, Wall Street Journal, Forbes, and the Chicago Tribune, among other media outlets.

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