Optionshouse is currently the low cost leader among discount online brokers. In addition to having the lowest cost per trade online they also have one of the best deals for new customers:

100 Free Trades for New Accounts.

But how does Optionshouse stack up against other brokers? This review will explore the pros, cons, and provide a summary and recommendation.

Pros:
Optionshouse has the best commission structure in the industry.
Fast execution and plenty of servers for a fast interface.
Ability to replicate an order very quickly.
One of the best margin rates anywhere.
Very good customer service.
They are backed by Peak6, a professional trading company.

Cons:
Their tools and resources are good but not the best.
They don’t have charts for each individual option.
Strictly web-based.

Summary
If you are a bargain shopper OptionsHouse cannot be beat. If you like trading both stocks and options these guys are a great choice. It would be safe to say these guys are here to stay and they’ll be releasing improved services each year.

Background
OptionsXpress was one of the first brokers to embrace options as an online discount broker. Their development brought options trading online much faster. As a company they have always pushed the envelope on professional trading tools and have always provided them for free. OptionsXpress was one of the first companies providing entry-level and advanced education for free to their customers. Their pricing strategy has driven down the cost of commissions and per contract fees industry wide. Overall they are an excellent company.

Pros
Has the best tools and resources for the active options trader.
Advanced option trading.
Very good execution on trades.
Considered the best options trading broker.
No minimum account balance required to start trading.
Charts for individual options are available.

Cons
Their commissions are competitive but not the lowest online.

Please visit the online discount broker review page to see the best brokers compared.

eOption is one of the newest discount brokers to hit the online scene but they have over 30 years of experience in trading options. Since 2007 they have offered one of the lowest commissions in the industry to win market share. Their interface is straight forward and very good strategic option trading. While trading capabilities are as good as other brokers eOption’s tools aren’t as advanced as Think or Swim’s tools (but very few brokers have the caliber of tools TOS offers). As time goes on eOption’s set of tools and capabilities as other online option brokers. Direct access and multiple platforms are available for active traders. One of the standout features eOption provides is the ability to close multi-leg trade in a single click.

They provide free IRA accounts with no maintenance fees and are overall very good with not charging unnecessary fees. They are one of the few brokers that allow you to open account if you’re not a US citizen (good for international customers). They provide after-hours trading which is a nice feature not provided by most brokers. Execution routes through Citibank and speed is relatively fast and accurate. They support a number of ways to access and transfer your cash including a checking account, a visa check card/ATM card, and web bill pay.

The downside to eOption is that they require a minimum balance of $500 to open an account. Live streaming quotes are $15/month unless you trade at least 10 times.

Fees
Option + Contract = $3.00 + 0.10 per contract
Stock Trade = $3.00 per trade
Note: Some investors are claiming if you call eOptions you can get the per contract fee down to 0.05 per contract.

Pros:
One of the lowest cost brokers online.
No Fee IRAs.
Offer a wide range of investment options including stock, bonds, options, and more.
Supports international accounts (Accounts can be created for people outside the USA)
One click execution of multiple leg orders.

Cons:
Minimum of $500 to start an account required.
Streaming quotes and live charts are an additional $15/month if you trade infrequently.

Please visit the online discount broker review page to see the best brokers compared.

Company
Based out of Illinois, Think or Swim is a broker specializing in option trading. Their pricing structure caters to high volume traders and is intended to weed out smaller investors not willing to purchase large quantities in a single trade. They don’t charge some of the maintenance or inactivity fees you’ll see at other brokers. Their customer service is top notch and actually proactive if you are a big enough client. Overall ThinkorSwim is pushing the envelope on tools, software, and charting but may not be the best choice for newbie investors. If you are new to the game it doesn’t hurt to open an account because they don’t have an inactivity fee.

Pros:
No inactivity or IRA fees.
Three free mutual fund trades per month.
Top rated software and mobile applications.
Barron’s top choice two years in a row (2009 & 2010).
One of the best educational services around (including free paper trading accounts).
Desktop application is rated one of the best tools for option trading.
Charts provided are some of the best for technical analysis.

Cons:
Can be intimidating for newbie investors.
Minimum Required Balance of $3,500.
Bond pricing is not favorable.
FOREX Trading is not optimal here but have improved lately.
Commission structure can be expensive for newbies and penny stock traders.

Notes on ThinkorSwim
Some investors have been able to price match a competitors commissions just by asking for them. These investors have confirmed receiving TradeKing commission on their thinkorswim account. It’s worth a try.

Coupons & Promotions
Refer a friend and get $50 for each successful account created.
$100 Account Transfer Rebate – When you transfer to Think or Swim (TOS) they will reimburse any fees you incurred from your previous broker up to $100.
Active Trader Rebate – If you make more than 40 trades a month they’ll credit you $39 to cover some of your internet bill.

Please visit the online discount broker review page to see the best brokers compared.

Company
Based out of Illinois, Think or Swim is a broker specializing in option trading. Their pricing structure caters to high volume traders and is intended to weed out smaller investors not willing to purchase large quantities in a single trade. They don’t charge some of the maintenance or inactivity fees you’ll see at other brokers. Their customer service is top notch and actually proactive if you are a big enough client. Overall ThinkorSwim is pushing the envelope on tools, software, and charting but may not be the best choice for newbie investors. If you are new to the game it doesn’t hurt to open an account because they don’t have an inactivity fee.

Pros:
No inactivity or IRA fees.
Three free mutual fund trades per month.
Top rated software and mobile applications.
Barron’s top choice two years in a row (2009 & 2010).
One of the best educational services around (including free paper trading accounts).
Desktop application is rated one of the best tools for option trading.
Charts provided are some of the best for technical analysis.

Cons:
Can be intimidating for newbie investors.
Minimum Required Balance of $3,500.
Bond pricing is not favorable.
FOREX Trading is not optimal here but have improved lately.
Commission structure can be expensive for newbies and penny stock traders.

Notes on ThinkorSwim
Some investors have been able to price match a competitors commissions just by asking for them. These investors have confirmed receiving TradeKing commission on their thinkorswim account. It’s worth a try.

Coupons & Promotions
Refer a friend and get $50 for each successful account created.
$100 Account Transfer Rebate – When you transfer to Think or Swim (TOS) they will reimburse any fees you incurred from your previous broker up to $100.
Active Trader Rebate – If you make more than 40 trades a month they’ll credit you $39 to cover some of your internet bill.

Background
OptionsXpress was one of the first brokers to embrace options as an online discount broker. Their development brought options trading online much faster. As a company they have always pushed the envelope on professional trading tools and have always provided them for free. OptionsXpress was one of the first companies providing entry-level and advanced education for free to their customers. Their pricing strategy has driven down the cost of commissions and per contract fees industry wide. Overall they are an excellent company.

Pros
Has the best tools and resources for the active options trader.
Advanced option trading.
Very good execution on trades.
Considered the best options trading broker.
No minimum account balance required to start trading.
Charts for individual options are available.

Cons
Their commissions are competitive but not the lowest online.

Please visit the online discount broker review page to see the best brokers compared.

eOption is one of the newest discount brokers to hit the online scene but they have over 30 years of experience in trading options. Since 2007 they have offered one of the lowest commissions in the industry to win market share. Their interface is straight forward and very good strategic option trading. While trading capabilities are as good as other brokers eOption’s tools aren’t as advanced as Think or Swim’s tools (but very few brokers have the caliber of tools Think or Swim offers). As time goes on eOption’s set of tools and capabilities will match those of other online option brokers. Direct access and multiple platforms are available for active traders. One of the standout features eOption provides is the ability to close multi-leg trade in a single click.

They provide free IRA accounts with no maintenance fees and are overall very good with not charging unnecessary fees. They are one of the few brokers that allow you to open account if you’re not a US citizen (good for international customers). They provide after-hours trading which is a nice feature not provided by most brokers. Execution routes through Citibank and speed is relatively fast and accurate. They support a number of ways to access and transfer your cash including a checking account, a visa check card/ATM card, and web bill pay.

The downside to eOption is that they require a minimum balance of $500 to open an account. Live streaming quotes are $15/month unless you trade at least 10 times.

Fees
Option + Contract = $3.00 + 0.10 per contract
Stock Trade = $3.00 per trade
Note: Some investors are claiming if you call eOptions you can get the per contract fee down to 0.05 per contract. Shawn from eOptions commented that the .10 per contract is their very best contract price.

Pros:
One of the lowest cost brokers online.
No Fee IRAs.
Offer a wide range of investment options including stock, bonds, options, and more.
Supports international accounts (Accounts can be created for people outside the USA)
One click execution of multiple leg orders.

Cons:
Minimum of $500 to start an account required.
Streaming quotes and live charts are an additional $15/month if you trade infrequently.

Optionshouse is currently the low cost leader among discount online brokers. In addition to having the lowest cost per trade online they also have one of the best deals for new customers:

100 Free Trades for New Accounts.

But how does Optionshouse stack up against other brokers? This review will explore the pros, cons, and provide a summary and recommendation.

Pros:
Optionshouse has the best commission structure in the industry.
Fast execution and plenty of servers for a fast interface.
Ability to replicate an order very quickly.
One of the best margin rates anywhere.
Very good customer service.
They are backed by Peak6, a professional trading company.

Cons:
Their tools and resources are good but not the best.
They don’t have charts for each individual option.
Strictly web-based.

Summary
If you are a bargain shopper OptionsHouse cannot be beat. If you like trading both stocks and options these guys are a great choice. It would be safe to say these guys are here to stay and they’ll be releasing improved services each year.

To make this concise there are some companies I deliberately left off. The three reasons most companies didn’t make the list is that they 1) didn’t have a mature offering 2) they weren’t technically online discount brokers 3) They were so close in price and offering to other players that including them would have been redundant. For example, Ameriprise is not on the list because they aren’t a true discount broker. They are more interested in using financial advisors instead of individuals trading. Another one I left off is BuyandHold.com due to their oversimplified offering. Lastly, there are many companies I left off because their pricing all hovered around $19.95/order and their offering was very close to Wells Fargo or Vanguard.

This list is a sample of unique discount stock brokers.

Best All Around Winner

Overall TradeKing Rating

Pros:

• Very low online trading cost $4.95
• Lowest broker assisted trades at $4.95
• No minimum balance required
• Lowest amount of fees compared to other brokers
• IRA friendly with no maintenance fee.
• Trade Stock, Options, Mutual Funds, Bonds, and CDs
• Top rated website for usability.
• Generous interest rate on cash balances
• Best interest rates on margin accounts for small and medium accounts
• Full suite of investing tools
• No gimmicks or subscriptions to get the best price and service

Cons:

• They are lower on their cash balance interest rate than Sharebuilder’s money market sweep. But it’s only by 0.7%.
• For accounts with $1 Million+ OptionsXpress and Fidelity’s Margin interest rate is 5.25% instead of TradeKings flat rate of 7.25%. If you have less then a million dollars in your account TradeKing smashes the competition in their margin interest rate.
• If you trade heavily with options they are second place to Zecco’s price.
• No checking or debit card.

Absolute Lowest Cost (Stocks & Options): OptionsHouse.com

Only $2.95 for stock trades and $9.95 flat rate for options (no additional contract fees). This is by far the best pricing on stock trading online. The best part is that they are backed by professonal grade investment tools. There are no maintenence fees, volume penalties, low account fees, and broker assisted trades are only $2.95. It took a little digging but they support bonds and mutual funds in addition to stock and option trading. This is the best deal I’ve seen in a long time. Visit OptionsHouse | See Full Comparison

Update: Get 100 Free trades when you open an account today. Click Here to Redeem Offer

Low Cost with Powerful Trading Tools: OptionsXpress.com

Specializing in option tools and eductions as well as stocks, futures, mutual funds, bonds, ETFs, and SSFs. They are very competitive on pricing across the board with ultra low cost on option trading. No unexpected fees and no maintenance fee on IRAs or any other account. No extra cost for broker assisted trades, webinars, or tool center. | See Full Comparison

Low Cost with Forex Trading: ZECCO

Update:Zecco just added Forex trading. With Zecco there are no minimum balances to open an account. Stock trades are only 4.95 a trade. Their fees are minimal or non-existent with the exception of a $30 annual fee on IRA accounts. Signing up for an account online has been streamlined and is as easy as any other broker. To get 10 free trades a month you must make 25 trades or have a $25,000 minimum balance. | See Full Comparision

Long term stock investing:SOGOINVEST.com

Only $3 in and out for stock purchases. No maintenance fee on IRA or any other accounts. Allow fractional share purchases, automated stock purchases investing, and dividend re-investment. The only downside is a $2,500 minimum investment.

Best mid-range broker: Scottrade.com - Use Code HXOA4390

Get Three Free Trades with Scottrade Code: QXEH0544
This is for the best broker that is in the middle between Premium and Standard discount brokers. Scottrade offers competitive rates with a lot of service and tools. They have the most physical branches than anyone else in the country. Scottrade is a broker that you can grow into and still feel comfortable with. They accommodate the small and large accounts nicely.

These are the complete numbers from the research:

*Only with dividend reinvestment

*Sharebuilder uses DBMXX money market account.

The first step is to get the required equipment for online trade. These include a PC with plenty of memory, a large monitor or monitors, trading software, a broadband internet connection and a UPS. Beginners should also open a bank account where profits can be deposited and purchases can be paid for.

For beginners, information and learning are the keys to successful trading. There are books by famous stock traders available at online shopping portals and in bookstores to help a beginner to understand the many facets of online trade. E books, articles and courses are available online for free and for a fee. Online classes and webinars on online trading can be accessed on the internet.
Beginners should keep a small amount of money in their budget while trading online. The budget can increase as profits flow in. The trader should not trade beyond the budget for starters. Any profit made should be wisely invested. The budget should include fees and commissions charged by the broker for each transaction.

Beginners should explore and experiment with different strategies. They should mix and match different methods to find the strategy that suits their needs best. Beginners should keep backup strategies in case the strategy used does not work. The best approach is a flexible approach. Beginners should learn to combine strategies or use a single strategy at different times to make the trade profitable.
Stock trading aspirants should use demos and simulated trading platforms that are available online for as long as they remain uncomfortable about investing real money. Experts believe that beginners should trade with money after making at least ten successful simulated profits. Beginners should make as serious an effort in simulated trading as they should when trading with money.
Beginners should find a good trading platform and sign up. The trading platform should be a well known low cost platform that caters to traders with a low budget. Beginners should choose a platform that has an efficient support system. There should be tools on the broker’s website that offer instant access to the account of the trader and the trader should be able to view all transactions instantly. The platform should be secure and the broker should be a member of an investor protection organization. The system must have state of the art hacker proof functions in place.

Success in online stock trading is a slow and steady business. With careful study and experimenting with strategies, beginners can start making profits in online trade in a matter of months. It is also a good idea to compare online discount brokers for the best value.

Obviously one of your main requirements is that of the accessibility online. So to answer this question, you will need to find out if they operate a software platform, meaning you have to download software in order to use it, or does it have an encrypted account that you have to log into. In deciding which of these two options are important for you, you will need to examine your current situation. Are you continuously traveling, and say, prefer to do your Stock trading while on the beach in Baja, or is this a part-time hobby, and you have a set location. Basically you need to determine the level of security you’re prepared to accept.

Find out what hidden fees there are and also what the minimum deposit is. The majority of brokers will have a minimum deposit for you to open accounts. Bearing in mind some of the larger companies will require between $5000 and $10,000 deposit and if you haven’t made your millions just yet, this might be an unrealistic requirement for you. Be sure to read and study the fine print, there are all sorts of clauses and restrictions, don’t think just because there is no minimum balance that you get away scot free. Most of the time, they will have a higher maintenance fee. Ideally you should find a broker that meets your deposit budget and has a low maintenance fee. Another issue to consider is your commissions, although they are a normal part of trading. You don’t want your profits being shared out to graciously to your broker. The best is to find a flat fee for stock trading.

Depending on the type of person and personality you have on trading, the tools your online stockbroker provides will also help sway your decision, as well as what up to date information or news they can provide you. Remember to always use the free trial offer or send an e-mail asking to get limited access to their back office to see all the tools and features and how user-friendly they are for you. Some online brokers, depending on the situations will also offer you broker assisted trading; this will provide a world of benefits to you and can help you conduct trades. If you ever get stuck or unsure the broker might be able to point you in the right direction.

Overall TradeKing Rating

Having an online community for traders is also very handy. It will allow you to converse with other traders, and learn from their mistakes.

With Zecco there are no minimum balances to open an account. To get 10 free trades a month a $2,500 minimum is required. They have very little fees with the exception of a 30 annual fee on IRA accounts. When I signed up for Zecco the paperwork was a nightmare but I think they’ve fixed that now. They seem to be adding more and more to their offering and will be a viable broker into the future.

Start an Account with Zecco

Overall Scottrade Rating

Get free trades using code HXOA4390 when you sign up.

Summary

Scottrade strikes a good balance between quality and value. They have the most physical branches than anyone else online. This gives them an edge with customer service and convenience. With their online set of tools Scottrade is one of the best brokers around. Scottrades biggest downside is that they are more expensive than other brokers with comparable service.

Fees & Pricing

Scottrade is slightly more expensive than other discount brokers. Any additional fees are kept to a minimum and many costs found in more expensive brokers don’t exist. Most notably is their no fee IRA, no fee for inactiviy, and no minimum balance. Their no

Stock Trade (limit and market) : $7.00
Broker Assisted Trade: $27
Options $7.00 + $1.25 per contract

Mutual Funds (No Load, No Fee): Free
Mutual Funds (No Load): $17

IRA Fees: None
Inactivity Fee: None
Closing Fee: None

Minimum Initial Deposit: $500

Investment Products

Scottrade offers a full range of investment products including: stocks, options, mutual funds, IRAs, ETF, and ESAs. Their fixed income products include: US Treasuries, bonds, and CDs.

Tools and Resources

Scottrade has led the pack in real-time, up to the minute, reporting tools. They continue to push the envelope with their ScottradeElite trading platform (but you need $25K to access it). All of their tools have ample video tutorials and documentation to help first time users get started. Their web trading platform is also quite nice with fully customizable columns, reports, and charts.

In addition to software they also provide free access to Dow Jones News.

Scottrade Cons

Scottrade’s network of brokers is a good thing and a bad thing. It’s good because you can talk to a real person very quickly. It’s bad because they want you to use that instead of resolving many problems through email. They have also made parts of their online program lazy because of the dependence on these branches. To get your money into and out of Scottrade is a real pain. With no electronic transfer to and from a bank account you need to send your money to a Scottrade office for processing. To get your money out you need to request a check. With electronic transfers it cuts the time to a third of what you’d expect at Scottrade. UPDATE: Scottrade now accepts and supports ACH deposits and withdrawls. There was a time they didn’t have this option.

No automatic dividend reinvestment (DRIP) is kind of a downside too. If you invest heavily in dividend stock and like reinvesting the dividends Scottrade might not be for you.

For more advanced trading Scottrade’s system and customer support can be lacking. If you are an experienced trader executing non-traditional trades Scottrade might not be equip to help you much. If, on the other hand, you are a executing standard trades they will work great for you.

Scottrade Summary

Scottrade offers a competitive investment service and at $7.00 a trade they are hard to beat. The biggest complaint with Scottrade is that they don’t serve the more sophisticated or advanced trader very well. But for 95% of active traders Scottrade is one of the best options around. I still prefer TradeKing or Zecco because they provide the same level of service with less commissions. With that aside they provide a great value and offer a wide range of investment vehicles.