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Many traders will compare online brokers with a focus on the cost per trade. And the cost to place a stock trade has continued to come down over the years. Prior to online brokers coming onto the scene, you could pay around $50 to place a trade using a stock broker at one of the big brokerage houses. At that price, it is no surprise that the people placing those trades were in it for the long haul. That is to say, they could be properly called investors. Today, with trading prices in the single digits, nearly everyone at every budget level can trade, whether for the short-term or long-term.
Somewhat surprisingly is the fact that people who compare online brokers are still looking for the lowest possible price they can get. This is in spite of the fact that the higher rates of today, around $10.00 per trade, are still only a fraction of what they used to be. In a response to this market, the online brokers have continued to reduce their pricing consistently over the years. One of the bigger and more established names dropped their cost per trade by one dollar to $8.95. Another has restructured their tiered pricing, all but eliminating the top-tier that was over $10.00. They recognize that in order to compete, they need an entry price point in the single digits.
There are also some newer brokers that have become more recognizable over the past 3-5 years. Names like TradeKing were unknown only a few years ago, but today are considered among the leaders in terms of quality of service. One of the reasons they were able to gain a foothold so quickly was their $4.95 per trade pricing. In my opinion, that price is the dividing line between cheap online brokers and the not so cheap ones. Every broker at or below that rate gets a top rating in the pricing category.
As you compare online brokers for price, you should have an understanding of the variations in the pricing structure. These are the 3 categories the brokers fall into:
Flat Rate with no exceptions - several brokers charge a flat rate regardless of the circumstances. TD Ameritrade charges $9.99 no matter what type of trade you place.
Flat Rate with exceptions - Some brokers publish a flat rate, but with an asterisk. The asterisk is for certain conditions where there is an extra charge for certain kinds of trades. Many brokers charge a little extra for trading low-priced stocks which is typically defined as those less than one dollar.
Tiered - Some brokers have a tiered pricing structure where you pay different rates depending on the number of trades you place with them over the course of a month or quarter.
Keep these different price structures in mind as you compare online brokers based on price.
Many traders will compare online brokers with a focus on the cost per trade. And the cost to place a stock trade has continued to come down over the years. Prior to online brokers coming onto the scene, you could pay around $50 to place a trade using a stock broker at one of the big brokerage houses. At that price, it is no surprise that the people placing those trades were in it for the long haul. That is to say, they could be properly called investors. Today, with trading prices in the single digits, nearly everyone at every budget level can trade, whether for the short-term or long-term.
Somewhat surprisingly is the fact that people who compare online brokers are still looking for the lowest possible price they can get. This is in spite of the fact that the higher rates of today, around $10.00 per trade, are still only a fraction of what they used to be. In a response to this market, the online brokers have continued to reduce their pricing consistently over the years. One of the bigger and more established names dropped their cost per trade by one dollar to $8.95. Another has restructured their tiered pricing, all but eliminating the top-tier that was over $10.00. They recognize that in order to compete, they need an entry price point in the single digits.
There are also some newer brokers that have become more recognizable over the past 3-5 years. Names like TradeKing were unknown only a few years ago, but today are considered among the leaders in terms of quality of service. One of the reasons they were able to gain a foothold so quickly was their $4.95 per trade pricing. In my opinion, that price is the dividing line between cheap online brokers and the not so cheap ones. Every broker at or below that rate gets a top rating in the pricing category.
As you compare online brokers for price, you should have an understanding of the variations in the pricing structure. more info These are the 3 categories the brokers fall into:
Flat Rate with no exceptions - several brokers charge a flat rate regardless of the circumstances. TD Ameritrade charges $9.99 no matter what type of trade you place.
Flat Rate with exceptions - Some brokers publish a flat rate, but with an asterisk. The asterisk is for certain conditions where there is an extra charge for certain kinds of trades. Many brokers charge a little extra for trading low-priced stocks which is typically defined as those less than one dollar.
Tiered - Some brokers have a tiered pricing structure where you pay different rates depending on the number of trades you place with them over the course of a month or quarter.
Keep these different price structures in mind as you compare online brokers based on price.
Prior to online brokers coming onto the scene, you could pay around $50 to place a trade using a stock broker at one of the big brokerage houses. Many traders will compare online brokers with a focus on the cost per trade. Prior to online brokers coming onto the scene, you could pay around $50 to place a trade using a stock broker at one of the big brokerage houses. When searching for a good and reliable Forex broker for your trading, it is recommended to find out how - and especially how quickly and operatively - a broker can communicate with you. Generally, a broker can always offer you the major currency pairs, but if you're interested in exotic pairs like USD CZK, check this option before choosing your broker.