Which brokers are best for day trading?

Day traders have different requirements of their brokers when compared with less active investors. A day trader wants low cost, reliability, and fast order execution. Many of the features offered to appeal to longterm and infrequent traders are irrelevant for day traders. Remember that day traders close out all their positions at the end of a trading day and begin each trading day with a clean slate. They also make many transactions, so they have different criteria when deciding on the best brokers. Day traders typically aren’t concerned with fundamental data since they often place their trades from a chart based on technical analysis. What is important is the ability to receive breaking news while monitoring trading volumes, price activity and market liquidity. In deciding which brokers are best for day trading we focused on brokers that make it easy to enter different trade types and sizes quickly. We also wanted brokers that allow customers to place multiple, simultaneous orders, have customizable trade platforms, and will allow clients to designate their preferred trading venue.

Interactive Brokers

Interactive Brokers has long been the leader in low-cost trading. They prioritize low fees and focus on the active trader. Their Trader Workstation platform comes with dozens of trading algorithms, including one which finds the best price when filling orders. Day traders know IB has the lowest margin rates around, especially for traders using more than $100,000 in margin. And IB offers “unbundled” rates where customers receive 100% of market rebates for adding or taking market liquidity.

TradeStation

TradeStation began as a charting service, transitioned into a broker in 2001, and is now a top choice for active investors of stocks, options and futures. TradeStation provides clients with the best analytical tools, piles of research, and one of the best trading platforms in the industry. Clients can choose from three different commission plans: a flat fee plan, a per share/contract plan, and an unbundled plan. Active day traders will especially like the unbundled plan. One of the favorite features of the TradeStation platform is the ability to create and backtest an automated trading strategy from technical triggers.