Getting Antsy to Invest? Make sure you Choose the Right Stock Broker!
The first thing you want to think about when choosing a stock broker is whether you would like to have a stock broker to talk you through your trades and give you advice. I personally like to promote self learning and investing and having confidence in yourself to make the right trades. But if you are dying for personal attention, feel free to sign up at Fidelity, Smith Barney, Morgan Stanley etc, where the commissions for each of your stock purchases and sales will be through the roof compared to the commission fee of online brokers.
Plus its annoying to have to make your purchases through the phone. Remember commissions are for both sides of the trade, so when you buy or sell each has a different commission, or when you short and buy to cover same thing.
I'm not going to sit here and research and look up every type of online brokerage for you. However here are my thoughts. I have a Scottrade account and they try their best with customer service, but sometimes they are slow with dividend deposits. They offer $7 flat fee limit trades and I will say their Scottrade Elite Platform is very user friendly.
I have heard great positive reviews on Choicetrade, where there is a $5 flat fee limit trade. I have heard that the platform is also user friendly and pretty complete.
I personally think that Etrade has the best platform, and for advanced traders the $9.99 flat fee for a limit trade is worth it for access to the platform. I'm not sure, but I'd imagine you may be able to call them and get them to adjust your commissions lower, maybe to something like $7.
My favorite broker though is ThinkorSwim. They have just gotten bought out by Ameritrade so I'm hoping this doesn't have any effect. ThinkorSwim has the best customer service in the industry in my opinion, they are very detail oriented and efficient. Their platform is phenomenal, basic enough for normal users, and super sophisticated for advanced users. I love all of the tools they provide. My favorite feature though is their live tech support. Through the platform or on their website you can talk to customer service regarding anything you can think of.
The best part though is that you can use the ThinkorSwim chat to try and locate shares of a stock that you would like to short, where the shares are classified as "hard to borrow". This is extremely convenient for those that use shorting as a common strategy. Many brokers such as Scottrade for example, do not allow you to short stocks below $5. It is a myth that you can't short penny stocks. The key is for the brokerage to be able to locate shares to short of these stocks. ThinkorSwim does an excellent job at this and I have effectively been able to short many stocks even below $1.
Lastly, ThinkorSwim has competitive rates, I e-mailed them and told them I pay $7 at Scottrade and in a flash they set my commissions to $7 flat fee for limit orders.
Honestly, when looking at brokers, all of them have pretty good execution speed on your trade, so I look for the best value of price, customer support, platform, and availability to short. ThinkorSwim in my opinion is the best overall value, but when it comes down to beginning traders, Choicetrade at $5 commissions may be a good starting option.
