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How to pick online broker

Personal Finance & Money Asked by Yura on January 26, 2021

I’m looking for the way to pick online broker. I suppose to buy ETFs and rarely some other securities. There are a lot of online brokers ratings. Mostly it consist of 5-7 same items like TD Ameritrade, Fidelity, Charles Schwab, Interactive Brokers, E*TRADE.

Of course I try to simplify complicated choice, but however. How to choose?

I know good feedbacks about Interactive Brokers. But it looks like they have some commissions for trading non US securities. Maybe someone has reasonable way to pick one.

All advices and links are highly appreciated.

2 Answers

Well, there is not really more than this:

  • Check availability of markets and obvious fee and account size issues that you may hit.
  • Choose the one who you like best from what is left by technical measures (i.e. what platforms / API they allow).

There is not a lot more.

Note that "fees in non us securities" is not a non-starter - depending what you talk about here, there is no "free" trading in many jurisdictions because exchanges need to get paid (while you CAN work around THAT in the US, by refinancing via selling the order flow and some other things, those are not necessarily legal / available in some jurisdictions). Basically: Do your homework finding brokers and eliminating them (i.e. are you really interested in trading gold in saudi arabia on weekends?), make a decision matrix, decide.

Answered by TomTom on January 26, 2021

Best broker? First and foremost would be no commissions unless the broker offers some special services that aren't available elsewhere, then low commissions. After that, the best broker would depend on what your needs are. Some possible desired features might be:

  • Low margin rates?
  • Portfolio margin?
  • Quality research?
  • Easy to manage and stable platform?
  • Few service outages
  • Good tech support?
  • Good customer service?
  • Good option analytics?
  • Good charting?
  • Trading algorithms beyond basic stop orders?
  • Real time news?
  • Prompt execution and prompt account updating?
  • Stable and easy to use platform?
  • Are they effective at obtaining borrowable shares for shorting?
  • Maker/taker rebates?
  • No platform or data fees

Some of these are applicable to investors, some to traders, and some to both.

Answered by Bob Baerker on January 26, 2021

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