Best Online Broker for Day Trading

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Let’s review the best online broker for day trading in 2018 based on fees, trading platforms, customer service, and overall ease-of-use.

Day trading, where traders only hold positions in stocks for for minutes and hours at a time, always closing out the position before the end of the day, is a popular investing strategy among experienced investors.

Best Online Broker for Day Trading

Overall, Ally Invest is the best online broker for day trading. Ally has the lowest fees, best 24/7 customer service, and easiest to use trading platforms in the industry. There are never any inactivity or maintenance fees, software fees, or market data fees. Summary of Short Selling Brokers

Best Online Broker for Day Trading

Stock Broker

Trade Fee

Account Minimum

Ally Invest

$3.95

$0.00

tastyworks

$4.95

$2,000

TradeStation

$5.00

$500

TD Ameritrade

$6.95

$0.00

SpeedTrader

$4.49

$30,000

Interactive Brokers

$1.00

$10,000

Overview of the Best Online Brokers for Day Trading

Ally Invest – Best for all investors and traders
Special Offer: Up to $3,500 cash bonus + commission free trades for new accounts

With virtually all of the same features of high-priced, well-known brokerages like TD Ameritrade, Ally Invest charges a fraction of the cost for stock trades, which is a huge benefit for active for day traders. Commissions go as low as $3.95, Ally’s platform is free and effective. Keep reading…


TradeStation – Best for professional investors
Special Offer: None 🙁

Since TradeStation underwent a massive rebranding effort, the once “professional trader only” brokerage is now very welcoming to all traders, but TradeStation’s PC-based trading platforms cater to an elite level of traders. Keep reading…


tastyworks – Best for highly active traders
Special Offer: New for 2018! Commissions on Equity Options Trades Capped at $10 Per Leg!

The same fine people who developed TD Ameritrade’s popular downloadable trading platform, thinkorswim, went on to make another hit piece of trading software yet again. tastyworks offers free closing trades and is an excellent choice for investors who know they will quickly enter and exit positions in the market on a day-to-day basis. Keep reading…


TD Ameritrade – Best for non-cost conscious
Special Offer: $300 cash and 90 days of commission-free trades when you deposit $100,000

Although it won’t come cheap, TD Ameritrade offers quality service with quality investing technology. If cost is no object, and you don’t mind paying $6.95 for every trade, TD’s free trading platforms (thinkorswim), 24/7 customer service, and access to educational market material are excellent. Keep reading…

Do Brokers Really Matter for Day Trading?

Simply put, yet. Because day trading involves buying and selling stocks in the same day, commissions add up fast.

If you think of day trading as a business, where you (the trader) are the sole investor, you have a fiduciary responsibility to lower your commissions as much as possible.

Paying $6.95 per trade is simply not viable for an active, full-time day trader. For every position you place, you’re losing $13.90 guaranteed.

Assuming an average of just 8 day trades in one day, you’re looking at $111.20 just in brokerage commissions. This doesn’t even count exchange fees. Therefore, it really behooves responsible day traders to pick an online broker with dirt cheap commissions that doesn’t skimp on trading platforms or customer service. This is why we like Ally Invest, because they seem to have the perfect combination of these two ingredients.

Is Day Trading for Everyone?

Day trading is NOT for everyone. As the old saying goes, “there are a million ways to make a million dollars.”

In the markets, day trading stocks is not the only way to generate short-term alpha. It’s often overlooked by investors, but buying and holding is a popular strategy for a reason – because it works.

With day trading, you’ll inevitably pay more in commissions and open yourself up to larger losses than passive investors, because of leverage and heightened levels of trading activity.

Nevertheless, the tradeoff for assuming this slightly increased risk is limited market exposure. When a day trader closes out his positions for the day, and his portfolio is in cash, if the market crashes the following morning, he will be unaffected and ready to pounce. Buy and hold investors will likely suffer devastating losses. This is definitely part of the appeal of day trading.

Useful Resources and Guides for All Traders

Is $25,000 Needed to Day Trade?

This is the most common question new day traders have. According to the United States Securities and Exchange Commission and the Financial Industry Regulating Authority, a day trade is the purchase and sale of any security within the same day. Day trades apply to all US options and stock, but not to futures.

A pattern day trader is someone who executes four or more day trades in a rolling five day period. This means if you make more than four day trades in one week, you’ll be in hot water if you don’t have total account equity of $25,000.

More likely than not, your broker will issue a warning and eliminate the FINRA $25,000 margin call. If it happens a second time, however, your trading can be restricted for 90 days to closing transactions only.

It’s important to note that you’ll never end up owing your broker or the US government money just because you made four day trades in five days. The worst that can happen is being unable to place new trades with that broker for three months. It’s not a huge deal.

How to Get Around the PDT Rule

The easiest way to circumvent the pattern day trader rule is to have multiple brokerage accounts.

It’s not illegal at all and not even the least bit shady. We have accounts with every US stock broker, most of which are funded and always at the ready.

By having multiple brokerage accounts, even if you just have three, you’ll be able to make 12 day trades per week, which should be plenty for most traders.

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