Brokerage Firms for Day Traders: I through S
If you are going to start day trading, you will need an online brokerage account. The firms usually belong to all the exchanges, so you can trade almost anything anywhere in the world through them. Here are a few firms you may want to consider in alphabetical order. The list is not exhaustive and does not imply an endorsement of anyone’s services.
Interactive Brokers offers software-based direct access trading, with special expertise in international markets. It has options, futures, and foreign exchange trading services, as well as trading in stocks. Traders can use a range of order types and order-management features to work complicated strategies.
Just2Trade targets equity day traders with low commissions. The company’s goal is to provide fast execution through its web-based platform, which is useful to day traders who are looking to move quickly. Its services include real-time Level I and Level II quotes at no extra fee. It doesn't offer the analysis tools that some of the other brokerage firms do — here, it's all nice and simple.
In 2010, Lightspeed Trading acquired Terra Nova, another brokerage firm that worked with active traders. The combined firm specializes in low commission trades and has robust information services for day traders. Lightspeed also offers programming and testing services for traders who want to develop their own automated trading systems that include high-frequency trading capabilities. In addition, Lightspeed promotes its community services to help those who are learning trading or looking for order ideas.
Scottrade is an online stock broker that offers additional services for those customers with more than $25,000 in their accounts. Under the name ScottradeELITE, it gives these customers web-based access to NASDAQ Level II and detailed NASDAQ TotalView quotes as long as they do 15 trades a month; otherwise, this access costs $15. The firm can handle stock, bond, option, ETF, and international trading.
SogoTrade started life as a stock brokerage firm, but the company has added a lot of features for options traders. Its commissions are low: $3 for stock trades, $5 for options. The website has basic educational services, screeners, and other tools to help people get started.
Brokerage firms don’t make money just on the commission. Other sources of revenue include monthly service charges, fees for real-time quotes, interest on margin loans to customers, and the spread, which is the difference between what you pay for a security and what the firm paid to get it.
So don’t let the commission be the critical factor in deciding among brokerage firms. Think about the services you need and the relative cost to you of different account offerings.