Best Brokers for Day Trading: November 2019

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. 

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.

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

Best for Day Trading

Our list of the top five brokers for day trading:

  • Interactive Brokers
  • Lightspeed
  • TD Ameritrade
  • TradeStation
  • tastyworks

Interactive Brokers

  • Account Minimum: $0
  • Fees: $0.005 per share for the standard platform, $0 for IBKR Lite

The longtime leader in low-cost trading, Interactive Brokers is geared for very active traders. Though they have been adding features for less frequent traders over the last few years, their priority is keeping fees down. The speedy downloadable platform, Trader Workstation (TWS), includes dozens of professional-grade trading algorithms, such as the Adaptive Algo, which finds better prices for filling orders. You can customize the algorithm to fill your market order at the midpoint between bid and ask, thereby seeking opportunities within the spread to chisel a fraction of a penny more for your profits.

IB’s margin rates are practically the lowest you will find, especially for traders who use more than $100,000 of margin. You can automate a trading strategy using an API plug-in, or by subscribing to a strategy on their Investors’ Marketplace.

Interactive Brokers has also recently launched their IBKR Lite platform that allows clients to pay no commission on U.S.-based equities, but they are restricted to the web-based Client Portal and IB’s mobile apps.

Pros

  • Very low fees

  • An extremely customizable platform with watchlists capable of displaying over 450 columns

  • More than 120 technical indicators available for charting

  • Terrific market scanner to stay on top of current conditions

  • Algorithmic trading with automated trading capabilities available via API

Cons

  • The learning curve to become proficient using TWS is relatively steep

  • Accounts with less than $100,000 in assets are subject to monthly inactivity fees should the frequent trader choose to take a break

  • Several other brokers offer deeper technical analysis toolsets

  • Streaming real-time quotes are restricted to one device at a time

Lightspeed

  • Account Minimum: $10,000 (web), $25,000 (software)
  • Fees: Max $4.50/stock trade, $0.65/options contract. No charge per leg
  • Best for: Cost-conscious & active traders

Lightspeed Trader, the downloadable platform for day traders, is exceptionally stable, having had no issues weathering the many trading surges of the last few years. It’s customizable and includes streaming real-time quotes on all of the assets you can trade. The charts display and update rapidly and let you apply technical studies and Level II quotes, among other powerful features. 

Lightspeed Trader is highly secure. The login process includes a virtual private network (VPN), especially crucial for those with wireless Internet connections. A soft token is offered for those who use the web platform. Customers can set up complex order entry defaults which can be invoked with hotkeys to expedite orders. Frequent options traders can use the LivevolX platform.

Pros

  •  Fast data feeds with flexible order routing

  • Excellent support and a stable platform

  • Livevol X, a free platform available to Lightspeed customers, has terrific options analysis tools

Cons

  • Low balance accounts must generate a minimum of $25/month in commissions or pay an inactivity fee

  • Futures trading available only on the RealTick Pro platform, which costs $325/month

  • No mutual funds or forex available

TD Ameritrade (thinkorswim)

  • Account Minimum: $0
  • Fees: Free stock, ETF, and per-leg options trading commissions in the U.S., as of October 3rd, 2019. $0.65 per options contract.

The thinkorswim platform from TD Ameritrade provides customers with dazzling charting tools which can be customized to your heart’s content. Streaming real-time quotes power the intra-day charts, and you can send orders from a chart with a mouse click. To follow multiple stocks, simply tile charts on your monitor. If you want to automate a trading strategy, the thinkScript language allows you to use one of 300 built-in strategies, or set up your own from the hundreds of technical indicators included in the platform. The trading simulator, paperMoney, lets you work out your strategies without risking money. Also, TD Ameritrade has eliminated base trading commissions on equities, ETFs, and options for U.S.-based customers.

TradeStation

  • Account Minimum: $500 ($5,000 for IRA)
  • Fees: $5 stocks and ETFs, $0.50/contract and $5/trade options

TradeStation’s downloadable trading platform is packed with features for frequent traders. The platform originated as a technical analysis and charting package, evolving into a brokerage in 2001. You can route your orders yourself, selecting a trading venue, or use TradeStation’s smart order routing engine.

One of the strengths of this broker is the ability to build, backtest, and deploy an automated trading strategy based on technical triggers. The streaming real-time data is clean, so your strategies don’t send trades to market based on an erroneous feed. The TradingApp Store features in-house and third-party tools, many of which are free, to add to your platform. The web-based and mobile platforms are synched to the desktop platform, and offer extensive charting capabilities.

TradeStation has also just added a new platform called TSgo. 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.

Pros

  • Excellent charting and technical analysis capabilities.

  • A massive collection of historical data.

  • Portfolio Maestro feature helps fine-tune trading strategies.

  • Flexible and customizable real-time market scanners.

tastyworks

  • Account Minimum: $0
  • Fees: $0.00 stock trades, $1.00 to open options trades $0.00 to close

Tastyworks is a fast, reliable platform focused on options analysis and trading, but there are also plenty of tools for stock/ETF traders. The dashboard layout is easily customizable. Unlike other brokers, the browser platform has almost every feature as the downloadable one — key for those who aren’t always at home base. Even the mobile apps are power-packed. 

The tools are designed for people who visualize prospective trades rather than following a flow of time and sales data. They focus on liquidity, volatility, and the probability of a profit. On quote pages, implied volatility appears before a quote in order to help customers understand market opportunity.

Pros

  • Innovative pricing structure results in relatively low costs, particularly when trading options.

  • The platform is new (launched 2017) and built on the latest technology, so it is fast and stable.

  • Scanners help you find securities that are becoming more volatile.

  • Watchlists are sortable by up to 50 data points.

  • Quotes are not throttled, so they load quickly.

Cons

  • Commissions are fixed. There’s no negotiating for a more active trader.

  • Margin fees are higher than average for frequent traders but can be negotiated.

  • Investors cannot place multiple orders simultaneously or stage orders for a later entry.

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. 

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.

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.

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