Discount Broker Options

Discount brokers are becoming more common for investors to use.

The Internet has revolutionized the brokerage industry and made buying and selling stocks easier than ever. Discount brokers are now a viable choice for most investors with a reasonable familiarity with the stock market. Investors have several options they can take to access these discount brokers.

Scottrade

Scottrade has become a very popular nationwide discount brokerage due to its offline and online business model. The firm charges a $7 commission for a stock trade online, and it also has convenient locations around the country to discuss more advanced options with a broker. The firm's portal website provides research, education and handy graphs to understand your investment portfolio. Scottrade also provides a wealth of retirement options, including IRAs, for its account holders.

Options House

Options House might be the cheapest discount broker, with rates of only $3.95 per stock trade. It also charges only $5 per five options contracts, which may be the lowest in the industry for retail investors. Options House is backed by Peak 6 Investments, a large, professional options investing firm, and also provides streaming data, charts and a trading platform for its customers.

OptionsXpress

OptionsXpress is a large discount broker for trading the more illiquid contracts called stock options. As of 2011, the firm has over 350,000 accounts (with $7.2 billion in assets) trading a number of different kinds of products. Options cost only $1.25 per contract to trade, with futures costing $2.99. The company charges slightly more than its competitors for stock trades because it does not focus on that type of trading.

Discount Broker Considerations

Discount brokers can provide cheap, no-frills brokerage services for stocks, bonds, options, futures and other products. However, the difference of a few dollars per trade for commission might not be worth it if you do not like the firm's trading platform or data feed. Instead, choose a company with an intuitive software that makes you feel comfortable trading. The exception would be if you are a rapid-fire day trader making tens of trades a day. In that case, the lowest commission per trade would be the best for you.

References

• Scottrade: Investment Products and Services
• OptionsXpress: Pricing and Commission
• Options House: Competitive Rates