How To Compare Stock Brokers

If you want to know how to compare stock brokers, then you are probably most interested in online brokers. These are the most popular today, as the majority of investors are now making their trades over the internet as opposed to the phone. Even the traditionally offline brokers now have online platforms that allow you to make trades over the net.

When they compare online stock brokers, naturally many investors focus on price, and for good reason. The price of trading is not as much as it used to be. Before internet brokers, you could often expect to pay around $40-50 for a single trade. This discouraged day trading, because of the fact that each trade cost so much money.

However, internet brokers are much cheaper. The cheapest companies today charge just $5 to make a trade online, and only $20 to make it over the phone using a broker. Even the more expensive ones will not go over $10 for an internet transaction, and $30 for a phone trade.

Also, keep in mind that there are different categories of pricing as well. For instance, many brokers use the flat rate pricing, which is charging the same amount for any kind of trade. Then, there are others that also charge a flat rate, but they might charge more for specific kinds of trades. A common example is that many brokers charge more for trading penny stocks.

Then, there are the tier structured brokers. They charge based on the quantity of trades you make. Obviously the more you make, the lower you will pay. Therefore, if you are a day trader, you might want to use a tier structured company.

However, price is not the only factor to look at for stock broker comparison. As you can see from the above information, the difference between broker prices is not that big anyway. Another important factor is customer service. Some of the better brokers will allow you to contact them around the clock.

Most brokers have a number you can call as well as a live chat feature on their website, and make sure you go with the ones that give you prompt service. Some of them make you wait around forever before they can help you. In some cases, you might need to talk with someone immediately, and therefore going with a company with fast service is imperative.

In addition, the trading platform itself is another thing to consider. The best platforms will be simple and easy to understand, and will include plenty of tutorials to help you find your way around better. You would think that every brokerage would have this feature, but some platforms are so complicated that it takes an MIT degree to understand them.

The bottom line is that looking at a number of variables is how to compare stock brokers. Price is important, but it is not everything. If you take your time and read reviews, you should find the best broker for you shortly.

Three of the leading online brokers taking into account price, ease-of-use, and customer service are Tradeking, Zecco, and Scottrade. Fidelity, Schwab, and ETrade are also respected options.