The Best Online Brokers For Stocks and Option Trading – E*TRADE, OptionsHouse, TradeKing – Review and Ratings

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If you are thinking of investing in the rising stock market or just looking to start an IRA then you need an online broker. In today’s online world there are lots of good choices, but the key things to look for are still around cost, convenience and customer support. Luckily Barron’s, the leading investment magazine for everyday investor’s, has shortened this list in its annual survey of Best Online Brokers. The survey measures overall brokerage performance based on eight key aspects: trade experience, trading technology, usability, range of offerings, research amenities, portfolio analysis and reporting, customer service and education, and cost. So without further ado, here are my picks from the survey:

(4 Stars ****) E*TRADE. The trading platform is a one-stop shopping destination (convenient), and features terrific mobile-trading applications. The broker has enhanced a number of services, including fixed income, research, retirement planning, active trader and advice-based tools. It’s also implemented some navigation improvements, allowing for greater site customization and focused on better customer service. Mobile Pro for the iPhone is one of the best mobile-trading apps we’ve seen, and includes streaming video and options quotes. As the year goes on, E*TRADE plans to improve its mobile applications further; the firm is being rewarded by a huge increase in trades placed via mobile devices. This long established and leading broker recently announced a special promotion where new clients can get up to $500 plus 60 days of free trades

(****) OptionsHouse was again awarded a “Best for Options Traders” ranking. It also has very cheap $3.95 stock trades. The survey found the broker’s packed with tools for options traders, and it has added some for stock traders, too. It was awarded four stars for Trade Experience, Research Amenities, Portfolio Analysis; Report, and Customer Service; Education. The core of the Options- House platform is its risk viewer. President George Ruhana says, “We really want people to understand the risk associated with their positions.” He notes that a customer may have a position that is suitable on the basis of his margin but inappropriate for the size of his account. The potential effects of a change in the market on your positions, and your overall portfolio, are nicely laid out and understandable. Clients place approximately 100 trades per year. They are also currently running a special offer their new customers who get 100 free trades after they fund an account. Best of all, there are no time limit for trades.

(****) TradeKing. For the fourth consecutive year, online broker TradeKing has received high ratings. The firm was awarded a four-star rating on the strength of its options trading tools, as well as for its “Trader Network” that enables investors to interact to share ideas, its fixed income offerings, and its broad range of educational offerings, including its trademark Options Playbook and “All-Star” webinar series. On the downside, Barron’s said that there is some portfolio analysis functionality that is not available unless you use the Trader Network. You also can’t select a tax lot online when closing a position. The CEO of TradeKing, Don Montanaro, said, “Growing numbers of investors are putting their faith in online brokers like TradeKing to provide a better trading and client experience than they received from their professionally-managed relationships, and we aim to delight. From TradeKing, investors can expect to see a whole lot more product development, integrated social capabilities, education and all with our consistently stellar customer service in the year ahead.”

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{ 9 comments… read them below or add one }

Germany guy May 23, 2010 at 8:03 pm

>A small correction: OptionsHouse 100 free trade has a 60 day limit. I recently joined OH and wrote a review about them. Love their commissions, hate the platform! But overall, the experience has been good.
Absolute true!!!
Faced that during the worktime.

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Ferienhaus April 21, 2010 at 12:41 am

>OptionsXpress has a lot going for it. You'll like its fast service, wide fund selection and low fund prices. It's very simple and easy to use.

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Anonymous April 20, 2010 at 9:52 pm

>I know this sounds like spam but I had some capital losses this year and used a wonderful new application from netbasis.com to figure out my cost basis. They had information dating back to the 1920s. Cut major time from asking my slow ass cpa to do it. If anyone used something similar or needs to for their extensions please check it out…seriously. Great article too.

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Navin April 17, 2010 at 10:17 am

>Choosing an able broker is one of the most important decisions a trader has to make before trading begins. The primary factors influencing the choice of broker are the spreads offered by the broker, the execution time for trades, and the comfort level with the trading platform.

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Anonymous April 13, 2010 at 1:24 am

>Choosing the right broker can make all the difference. Really. From trade execution to margin rates, your broker can impact your bottom line.

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MoneyCone April 8, 2010 at 4:12 pm

>A small correction: OptionsHouse 100 free trade has a 60 day limit. I recently joined OH and wrote a review about them. Love their commissions, hate the platform! But overall, the experience has been good.

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Anonymous March 31, 2010 at 11:14 pm

>Have you seen Kiplinger's rankings For a $50,000 Account

1) OptionsXpress

2) Muriel Siebert

3) Wells Fargo

4) Schwab

5) Fidelity

6) Vanguard

6) Firstrade

7) TradeKing

8) Schwab

9) E*Trade

10) Scottrade

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Hunter March 31, 2010 at 11:13 pm

>OptionsXpress has a lot going for it. You'll like its fast service, wide fund selection and low fund prices. It's very simple and easy to use.

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Anonymous March 31, 2010 at 11:11 pm

>What about Fidelity? It offers a full range of services to online investors, from international trading to checking accounts. The firm is known for its large selection of investment products. Its easy-to-use website provides great… education, planning and analysis resources to help you make the best choices. Fidelity has a three-tier commission structure; those who make fewer than 36 trades a year and have less than $50,000 in assets pay $19.95 per trade, for example. There are no extra fees, and the minimum is $2,500 to open an account. Fidelity provides mobile applications, and you can check your accounts or make trades while on the go.

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