I've been trading stocks online since 1998. I've been through a bunch of online stock brokers.

I started with TD Canada Trust, which treated me to "bargain-basement" commissions of $39.95 per trade. Like everyone else on the planet, I bailed once I heard of E-Trade, and switched my account over. The problem with E-Trade was that at the time, they were not reliable, and often went down on extremely heavy volume market days (just the day that you usually want to sell or buy something.) After that, I switched over to Cybertrader, which offered decent commissions but a tremendous suite of trading tools. Cybertrader was my home for years, until Cybertrader was forced to close my account because they didn't have a physical office in Canada, and according to Canadian securities law, a company must have a physical office in Canada in order to accept Canadian clients (stupid, I know.) Eventually, after months of foot-dragging by the Canadian government, Cybertrader finally partnered with a company called Questrade in Canada, and I was able to trade at Cybertrader again via Questrade.

So that's my story. What's your story? In order to properly select an online stock broker, you need to first ask yourself the question: how much am I planning on trading?

If you are a fairly active trader, meaning once a day or more, I would highly recommend that you open an account at an online brokerages which can give you the tools necessary to proper move in and out of stocks. In your case, it is nice to have a broker that offers level II quotes and the ability to easily track baskets of stocks. You should also go with a broker that offers a per share commissions, instead of a flat rate commission. You should avoid opening an account at your bank's online stock brokerage; it may be tempting, as your brokerage account and bank account will be linked, but I can guarantee you that you will suffer from high commissions and sub-standard service. If you are a fairly active trader, I would highly recommend Cybertrader.com, as I have been using them for years with no problems. And no, they aren't paying me to say this.

If you don't trade that much, let's say maybe a couple of times per month at the most, then I would recommend something that is cheap and bare bones but still gets the job done. Interactivebrokers.com is the company for you. Bargain basement commissions, but tons of functionality. They are a hugely popular publicly traded company, so don't let their thrifty nature fool you; they are a proven and very popular company. If you are looking to keep your commission and data costs down, they are the brokerage for you. If you need a bit more of the bells and whistles, then I would recommend Cybertrader. Either way, you can't really go wrong. Just avoid the banks for your online brokerage account, you'll thank me later.

Filed under: Stock Market Education | General Knowledge

5 COMMENTS - What Say You?

Comment by Karim on October 20, 2008 @ 9:44 pm

Thanks for your article. I have been daytrading since 1999 until 2004 with those 2 (cybertrader and IB), and at that time I have tried so many and i found that they are the best. I use cybertrader for its great platform as a decision tool and IB to execute the orders. I use to make 5 to 10 trades a day.
Since then I have not done any market research on providers. Your article confirm me that I was using the right providers for me. thanks again

--

Comment by GomiGralaylow on February 07, 2009 @ 3:03 am

I Thanks Your site is very useful.

--

Comment by Aaron on December 22, 2009 @ 1:56 pm

Thanks for writing this article. I have a trading account with RBC who charges me 28.95 per trade PLUS an extra $20 per QUARTER (which by my math = $80 per year) for "account maintenance". What are they maintaining? I'm doing all of the research and trading. Needless to say, that does not make me happy. I will investigate cybertrader.

--

Comment by Dave on December 22, 2009 @ 2:16 pm

Hey Aaron

This article is a bit old - Cybertrader was swallowed up by Charles Schwab.

Do you live in Canada? If so, then I recommend Questrade. I use them myself. Much cheaper than your current broker.

--

Comment by Shawn G on May 16, 2012 @ 8:21 am

I would like to enter in penny stocks trade and am totally new to this area! can somebody recommend me a broker (cheap and reliable) so I can start my penny stocks trading!

--

Leave a Reply

Related Articles