Hey guys, I’m interested in starting to trade/invest in equities online but I am not sure what to look for in terms of online brokerage sites. What should I be looking for other than fees in these sites? Which sites do people use here? Thanks in advance!
Depends on what you want. Some sites let you trade for commissions of as low as $3-4, but don’t really offer anything in research, brokerage-assistance, and so on. There are others that have research and other features, but make you pay $7-10 per trade. If you’re dealing with large volumes of money EACH trade so that the commission and fees don’t take much out of your return, then you could just go with the one that has the most and best features (research, etc). There are some banks also that let you trade with no commissions since you’re paying in other ways for the account. I believe Bank of America does this. Not certain, though.
Thanks for the response. That kind of sucks but makes sense I guess. I did want to partake in soem fo the research works by the brokerages. Which sites are considered to have the best research? Also I’m in Canada so Bank of America’s kind of out of question but does anyone know if there’s a similar service like that in Canadian banks? Thanks
A lot of people in the industry use Interactive Brokers, as do I. The interface can be a bit intimidating when you’re new to it, but they have a demo version that allows you to practice without risking real money. Commissions are really low, like $1 for a small stock or ETF trade, so it makes active strategies with small account sizes more feasible if you are into that. The downside is that they don’t have bells and whistles as far as customer support is concerned.
I got my dough with TD Ameritrade. Can’t really complain but its $10 a trade + $0.75/contract if you are into options I just their thinkorswim trading program. As far as research goes, it is useless IMO. You can find more stuff online for free. So if you have a small account (under 25k) then pick the one with the lowest commissions (Interactive Broker) a large account (over 25k) then stick with the big names (e trade, TD, schwabb, etC)
Really? Well one of the reasons I wanted to start was to be able to read those research reports so I’m familiar and comfortable with them for when I try to pursue a career as an analyst. If you don’t mind, can you tell me where I can find these kinds of equity research reports for free? Thanks!
I’ve used Scottrade for a long time and have been very happy with it, except you can’t write puts. I figure we (people that post in a CFA forum) really shouldn’t need research reports. Do your own due diligence.
You might try third party research reports. Morningstar does some, and I’m sure there are others. The major retail services (ScottTrade, TD Ameritrade, Fidelity, etc.) generally provide them. Yahoo Finance sells research reports. Google Finance too, I think.
Wellll I went to have a look around and it looks like the majority of the sites suggested here aren’t compatible with the tax free savings account… Appreciate the comments either way! Would any of the Canadians here care to make a suggestion? Thanks
Interactive Brokers is NOT $1 per stock trade. It’s .005 per share so it can add up if you have to trade a large order. That being said, I still like the site. Great option rates. Options House is the best for commissions $3.95 per stock order (up to 40,000 shares) and $8.50 + .15/contract for option trades (up to 4,000 contracts).
I’m also looking to open one, if you’re not interested in reading research reports, are they all essentially the same? I’m thinking this is a commoditized industry, so we shoudl just pick the lowest cost provider?
Also, do the major brokerages give you access to preferred stock?
Palantir Wrote: ------------------------------------------------------- > I’m also looking to open one, if you’re not > interested in reading research reports, are they > all essentially the same? > > > I’m thinking this is a commoditized industry, so > we shoudl just pick the lowest cost provider? Yes. If you’re looking to trade options though, you need to investigate where the broker is sending their order flow to.
sounds like interactive trade is the cheapest? anyone uses tradeking, any comments? i don’t need research reports. no active trading. what’s the recommendation?
ManMythLegend Wrote: ------------------------------------------------------- > Yes. If you’re looking to trade options though, you need to investigate where the broker is sending their order flow to. What does it matter? Most likely the order is going to be internalized.
Interactive Broker is the cheapest and you can trade most securities and derivatives through them. Their margin rates are rock bottom. Also you can trade on many international exchanges through them as well. Need $10k to open an account.
I have an account with Interactive Brokers (and I’m a share holder too). They provide a great service and I highly recommend it, but it’s an a’ la carte service. The commissions are rock bottom, but you do have to pay for most real time data feeds and you do have to pay at least $10/month if your commissions don’t total that amount (e.g. if you have commissions of $6 in a month, then you’ll be charged $4 to meet the minimum). ZeroBonus - FYI - the current average equity in an account is $147k and IB is aggressively pursuing institutional investors to their platform. IB is great for all account sizes, particularly if you are an active trader or want to trade options. ManMythLegend - IB does not internalize customer order flow. http://seekingalpha.com/article/281051-interactive-brokers-ceo-discusses-q2-2011-results-earnings-call-transcript?source=yahoo On another note, did any IB users sign up for the securities lending program? It sounds interesting to me, but I haven’t had a chance to see what they are paying out on the stocks I hold. Now everyone open up an account, so that you can help the sagging share price! 
IB also has the most stringent margin requirements. If you want to sell uncovered options, that is certainly not the place to go.
no_slogan - It’s not to imply any particularly negative impact, IB still has some of the best rates available for retail. Peterffy’s remark is a point of semantics imo, and there’s no point in debating that. Simply, you should read their most recent (March 31, 2011) order routing report and then see if your view is different.