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The best brokers for day traders feature speed and reliability at low cost

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When choosing an online broker, day traders place a premium on speed, reliability, and low cost. Features designed to appeal to long-term, infrequent traders are unnecessary for day traders, who generally start a trading day with no positions in their portfolios, make a lot of transactions, and end the day having closed all of those trades.

Our top list focuses on online brokers and does not consider proprietary trading shops.

Best Online Brokers for Day Trading in May 2020:

Interactive Brokers: Best Online Broker for Day Trading
Interactive Brokers: Best Broker for Advanced Day Traders
Interactive Brokers: Best Charting Platform for Day Traders
Fidelity: Best Low-Cost Day Trading Platform

Best Broker for Day Trading, Best for Advanced Day Traders, and Best Charting Platform for Day Traders: Interactive Brokers

4.5

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Account Minimum: $0
Fees: Maximum $0.005 per share for Pro platform or 1% of trade value, $0 for IBKR Lite

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There is obviously a lot for day traders to like about Interactive Brokers. Interactive Brokers allows day traders to invest in a wide array of instruments on a global scale with access to 125 markets in 31 countries. The broker also offers you the widest array of order types and a wealth of analysis tools to find your next trading opportunity.

The only real weakness is the fact that Interactive Brokers went from one of the lowest cost brokers for day traders to one of the few that still charges fees (albeit still very low) while the rest of the industry has moved to zero. This fact has allowed Fidelity to prevent Interactive Brokers from sweeping the day trading portion of our review. Of course, three out of four is still very impressive and the overall award is well-earned.

Interactive Brokers’ primary platform for day traders, the Traders Workstation (TWS) platform, is excellent across the board. There are a few platforms that can beat it in a particular type of trading, such as options trading, but none offer the overall quality of trading experience across the same number of markets and instruments. TWS is the most customizable platform we reviewed, which comes as a trade-off in terms of a learning curve you have to climb before you can use the software to its full potential.

Interactive Brokers tied with TD Ameritrade in terms of the range and flexibility of the charting tools. These platforms allow you to trade directly from a chart and they allow you to customize your charting views to almost any conceivable specification. Interactive Brokers took this category for day trading based on its overall strength and the fact that there are so many more charts because the overall asset pool is much larger.

Advanced day traders will find that Interactive Brokers’ TWS gets better as you need more from it. Backtesting and all the other tools required to implement multi-layered trades with contingent orders are present and all among the best available. Moreover, TWS shines when it comes to controlling your entry and exit, which is critical to trading success in less liquid markets or assets. In addition to 60 supported order types, Interactive Brokers has third-party algorithms that can further fine tune order selection. The algorithms give you control over how a position is entered or exited so that you can minimize slippage or maximize speed. The algorithms take different approaches ranging from blasting orders to exchanges simultaneously to subtly working them into market close or breaking up a position through an iceberg order.

On top of the rich features, wide range of assets, and extensive order types, Interactive Brokers also offers the lowest margin interest rates of all the brokers we reviewed. While this may not matter to buy and hold investors, this changes some of the cost calculations for advanced traders expecting to utilize margin heavily in their trading. That being said, most day traders will see the cost aspect as secondary once they experience the capabilities of TWS and see the buffet of markets and assets offered by Interactive Brokers.

Pros

No broker can match Interactive Brokers in terms of the range of assets you can trade and the number of markets you can trade them in.
TWS is the strongest overall platform for day trading with customizations and tools that will satisfy even the most sophisticated traders.
Interactive Brokers allows fractional share trading - something that many of its direct competitors are still catching up on.

Cons

Interactive Brokers still charges nominal fees, meaning that other brokerages can offer an overall lower trading cost.
Day traders can only stream data to one device at a time, which may affect traders with a multi-device workflow.
TWS is very powerful and customizable, but this also means it takes some time to learn and fully unlock the potential.

Fidelity: Best Low-Cost Day Trading Platform

4.1

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Account Minimum: $0
Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade

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Fidelity is not only the best low-cost day trading platform in our review, but it was actually the overall runner-up to Interactive Brokers, coming in just slightly ahead of TD Ameritrade. When we are looking at Fidelity from the day trading perspective, it is all about Active Trader Pro. Active Trader Pro is an excellent free platform for trading that will meet the needs of most traders without missing a beat. That said, it is Fidelity’s pricing that adds the real value for a typical day trader.

Fidelity charges no fees on stocks, ETFs, or OTCBB (penny stock) trades. Although no-fee stocks and ETF trades are now commonplace, no-fee penny stocks are still relatively rare. There are some brokers that match Fidelity in this, but many of them scored lower in terms of trading technology and customizability. Another edge for Fidelity, however, is the firm’s order execution. Iomega lphd up3 driver for mac. Over 96% of Fidelity orders take place as a price that is better than the national best bid or offer. This results in cost savings for day traders on almost every trade. If you are primarily trading equities and you want to keep your costs down as low as possible, then Fidelity is the brokerage for you.

Pros

Fidelity’s costs are low, its order execution is exceptional, and it sweeps your idle cash to give you a little more return while you are waiting to deploy your money.
Fidelity offers a range of excellent research and screeners.
Active Trader Pro is a flexible and powerful trading platform that is a close competitor with Interactive Brokers’ TWS in terms of functionality.

Cons

Fidelity does not offer futures, futures options, or cryptocurrency trading.
Day traders looking for more fundamental research may have to use the web platform in addition to Active Trader Pro.

How Day Traders Use Their Online Broker

Day traders may place their trades manually, often from a chart, or set up an automated system that generates orders on their behalf. Fundamental data is not a concern, but the ability to monitor price volatility, liquidity, trading volume, and breaking news, is key to successful day trading.

Day traders often prefer brokers who charge per share (rather than per trade). Traders also need real-time margin and buying power updates. Each broker ranked here affords their day-trading customers the ability to enter orders quickly by customizing the size of trades and turning off the trade confirmation screen. We sought brokers who allow traders to place multiple orders simultaneously, designate which trading venue will handle the order, and customize trading defaults.

Are You a Day Trader?

A key consideration for day traders is trading platform quality, which can impact things such as execution speed and price quotes. Day traders, especially those who trade using their own algorithms, need flawless data feeds or they risk entering orders based on errors in the data. In an environment where high-frequency traders place transactions in milliseconds, human traders must possess the best tools. Most brokers offer speedy trade executions, but slippage remains a concern. Traders should test for themselves how long a platform takes to execute a trade.

Commissions, margin rates, and other expenses are also top concerns for day traders. Even if a day trader can consistently beat the market, the profit from those positions must exceed the cost of commissions. For a high volume trader, commission costs can easily run into the hundreds or thousands of dollars per day. Traders can check these rates by contacting the broker or checking the broker website, but most offer special rates for highly active day traders.

It is also important for day traders to consider factors such as customer service and the broker’s financial stability. Customer service is vital during times of crisis. A crisis could be a computer crash or other failure when you need to reach support to place a trade. The best brokers offer dedicated account representatives for highly active day traders to assist in this regard.

The financial strength of the firm is also important since small brokerages can and do go out of business, but the main player in whether or not you can recover your assets is the clearing firm. Take a look at FINRA's BrokerCheck page before signing on with a small firm to make sure they have not had claims filed against them for misdeeds or financial instability.

Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.

In addition, every broker we surveyed was required to fill out an extensive survey about all aspects of its platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of its platforms at our offices.

When choosing an online broker, day traders place a premium on speed, reliability, and low cost. Features designed to appeal to long-term infrequent traders are unnecessary for day traders, who generally start a trading day with no positions in its portfolios, make a lot of transactions, and end the day with having closed all of those trades. The ability to monitor price volatility, liquidity, trading volume, and breaking news is key to successful day trading. Traders need real-time margin and buying power updates. Each broker ranked here affords its day-trading customers the ability to enter orders quickly by customizing the size of trades and turning off the trade confirmation screen. We sought brokers who allow traders to place multiple orders simultaneously, designate which trading venue will handle the order, and customize trading defaults.

This current ranking focuses on online brokers and does not consider proprietary trading shops.

Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.

TradeStation and Interactive Brokers both ranked in our top five for 2019. Customers will find a nearly overwhelming supply of tools, data feeds, and customizable portfolio analysis features on both sites. Both have extensive connections to third-party apps, enabling more in-depth technical analysis and automated trading strategies. These brokers are better suited to experienced traders, though they are both making efforts to help new investors.

TradeStation's focus on high-quality market data and trade executions makes them an excellent choice for the active trader. They are also committed to superior customer service. Their systems are stable and remain available during market surges. Technical analysis and statistical modeling of trading strategies are also strengths of TradeStation. You can develop your own automatic trading system using the analysis tools and strategy backtesting. You can also generate income through the fully-paid stock lending program and enhance your trading skills with their extensive educational offerings.

Interactive Brokers ranks highly in our 2019 review due to its wealth of tools for sophisticated international investors. The firm makes a point of connecting to as many electronic exchanges as possible. You can trade equities, options, and futures around the world and around the clock. IB also offers short selling opportunities.

In our 2019 Best Online Brokers Awards, TradeStation received awards for Best Overall Online Brokers, Best for Penny Stocks, and Best for Day Trading.

Interactive Brokers received awards for Best Overall Online Brokers, Best for Low Costs, Best for Options Trading, Best for Penny Stocks, Best for Day Trading, and Best for International Trading.

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AccountMinimum: $2,000 for TS Select and $0 for TSgo
Fees: $0 stocks and ETFs, $0.60/contract and $0/trade options on TS Select, $0.50/contract and $0/trade

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Account Minimum: $0
Fees: Maximum $0.005 per share for Pro platform or 1% of trade value, $0 for IBKR Lite

OPEN AN ACCOUNT

Trade Experience

TradeStation Today is the first screen you'll see after logging into either the downloadable platform or the web platform. TradeStation Today includes featured videos, links to workspaces, the firm's Twitter feed, and an economic calendar. The desktop platform is a downloadable app, and it is extensively customizable. The web platform has most of the TradeStation tools, and it is a little easier to use. All data streams in real time.

You can place, modify, and cancel trades from charts on TradeStation. However, more advanced users may prefer using keyboard shortcuts. TradeStation’s trade ticket is called Matrix, and it adapts to the asset class you’re trading. Hovering your mouse over a bid or ask price opens a trade ticket. You can then modify the ticket before sending the order. Orders on TradeStation are routed to seek out and capture as much price improvement and hidden size as reasonably possible. TradeStation's price improvement efforts also take into account time and market impact.

Trader Workstation is Interactive Brokers' flagship platform, but you can also log into the web-based Client Portal. Client Portal offers access to portfolio analysis, a forum for clients, the Market Overview tool, and more. Several high-end analytical tools have been added to Client Portal, including scanners, global data, and customizable watchlists. There is streaming data everywhere on all platforms, though you can only have data updating on one device at a time. You can also enter orders from a graph or the matrix display in Trader Workstation.

Interactive Brokers' order execution engine has what could be the smartest order router in the business. It stays on top of changes in market conditions to reroute all or parts of your order. IB's order router seeks to achieve optimal execution, attain price improvement, and maximize any possible rebate. The router can also look for the best place to execute each leg of an option spread.

TradeStation

Place trades from the trade ticket, a graph, or using keyboard shortcuts
All data streams in real time
Orders are routed to capture price improvement without making a big impact on the market

Interactive Brokers

Trade on any global market that can be accessed electronically
All data streams in real time, but you can only have one active device at a time
Orders are routed to maximize rebates and could be split among venues to maximize price improvement

Mobile and Emerging Tech

TradeStation streams real-time prices on the mobile app and supports mobile trading of all options strategies. There are numerous customization settings for the mobile app, including bypassing a trade confirmation for faster order entry. The mobile apps sync with your desktop or web-based platform, so chart customization settings are shared. The firm added 22 new chart studies to the mobile app over the last year, including Ichimoku clouds. A hotlist tool showing major market movers is also included with the mobile app. In the emerging tech department, TradeStation has a chatbot to interact with on Facebook Messenger.

Interactive Brokers also provides streaming real-time data for watchlists and charts on its mobile app. Options trading on IB's mobile app is straightforward. You tap on tiles representing the strikes and expiry dates you want to trade to build a spread. You can compare two potential trades with the Performance Profile tool. There's a persistent Trade button letting you send orders to the market quickly. Interactive Brokers' AI-powered assistant IBot is built into the mobile app. IBot can help you find advanced order types and analytical tools on the app.

TradeStation

Streaming real-time data for all watchlists and charts
Technical chart studies, including Ichimoku clouds, enabled on mobile
Customer service via a chatbot on Facebook Messenger is available

Interactive Brokers

Streaming real-time data for all watchlists and charts
All options strategies can be traded on a mobile device, as well as many international equities and derivatives
The AI-powered assistant IBot helps customers find features easily

News and Research

The options strategy analyzer OptionStation Pro is built into the TradeStation desktop platform. The graphical display gives you a picture of the potential profitability of a strategy. You can adjust the strategy in the trade ticket at the bottom of the screen. RadarScreen is an incredibly flexible stock scanner. It lets you create stock screens based on technical or fundamental criteria.

TradeStation’s historical data set is second to none. They have over 50 years of daily history, 27 years of minute history, and six months of tick by tick history. TradeStation's in-house market commentary, called TradeStation Market Insights, is available on the desktop platform. TradeStation Market Insights is updated five to ten times during the trading day.

Interactive Brokers has built numerous options-specific research tools into Trader Workstation. Probability Lab lets you compare your market outlook to current conditions and suggests strategies you can trade. IB offers its clients free research from nearly 100 providers, including Alexandria Social Sentiment, Market Realist, Zacks, TipRanks, ValuEngine, Dow Jones, and many more. ESG ratings are available from Thomson Reuters. Interactive Brokers also offers discounted subscriptions to premium research. The Risk Navigator lets you stress-test your portfolio by seeing how a specific change in market conditions would affect your holdings.

TradeStation

OptionStation Pro is a flexible toolset for analyzing and placing options trades
Screen stocks in real time using RadarScreen
Historical data available for charting is unmatched in the industry

Interactive Brokers

Probability Lab helps customers build options strategies
Free research available from over 100 providers, with discounted subscriptions possible from additional premium research sites
The Risk Navigator lets you stress-test your portfolio

Education and Security

TradeStation offered more than 300 webinars in 2018, including lessons on placing trades, available asset classes, technical analysis, and options trading. They added to their YouTube channel’s video content and have been offering five-day “Master Class” events in Chicago and Florida. You’ll find live education events streaming on all platforms on topics such as using margin, trading ETFs, initial public offerings, and cryptocurrencies. TradeStation uses 256-bit data encryption (TLS/SSL) and Symantec VIP to protect customer accounts.

Interactive Brokers' Traders Academy offers free online courses on a wide array of topics. Topics range from TWS for Beginners up to in-depth explanations of various trading algorithms. Traders Academy is accessible from all platforms, including mobile. IB holds approximately 250 live webinars a year, and they have an archive with nearly 900 previously recorded webinars. The Traders' Insight blog includes educational content on retirement and tax topics, along with outlooks for U.S., Asia-Pacific, Europe, and various market sectors. The IBKR Quant Blog is there for clients who want to model the financial markets and write their own trading algorithms. Interactive Brokers supplies customers with a secure device for two-factor authentication of their accounts.

TradeStation

More than 300 webinars offered in 2018, with a similar number planned for 2019
TradeStation has a YouTube channel with constantly updated video content
TradeStation supports Symantec VIP for authentication

Interactive Brokers

Traders Academy offers free online classes on a wide variety of topics
Blogs on topics from retirement and tax planning to algorithmic trading
Request a device from IB to use two-factor authentication at login

Costs

TradeStation's TS Select clients pay no commission for trading U.S.-based equities (including OTCBB/penny stocks), and $0.60/contract for options trades. All other commissions are the same, as are margin rates. TS Select has a $2,000 account minimum.

TradeStation's TSgo clients pay no commission for trading U.S.-based equities (including OTCBB/penny stocks), and $0.50/contract for options trades. All other commissions are the same, as are margin rates. TSgo has no account minimum.

Interactive Brokers is one of the least expensive places to trade online. Clients can choose from a fixed-rate plan or a tiered plan, depending on trading volume. The fixed-rate plan is best for occasional traders who favor market orders. The tiered model minimizes trading costs for frequent traders who factor exchange rebates into their strategies. We used the fixed-rate plan for our calculations, which is $0.005 per share with a minimum of $1 per trade.

There is no per-leg fee for options trades at Interactive Brokers. Per-contract commission fees range from a maximum of $0.70 per contract to $0.15 per contract depending on volume. Margin rates were the lowest in our survey, and you can borrow against your assets for any reason—not just trading. IB also pays 1.7% on idle cash over $10,000.

IBKR Lite clients pay no commission on U.S.-based equities, but they are restricted to the web-based Client Portal and IB's mobile apps. The usual commission schedule applies to all other trades.

Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.

In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.