Stock market investing becomes very popular these days; in fact, even the neophytes in investing find the stock market investments really interesting, although this could also be intimidating sometimes. The important thing is to know the basic flow of the stock market, and learn how the stock trading works, before investing in any thing. Stock trading is the buying and selling of shares of stocks in the financial market. Trading may be done on the stock market exchange floor, or through electronic trading.
In trading with the exchange floor, an investor will approach a stock broker, who will prompt the floor clerk and make certain arrangements for the stocks being ordered by the investor. The floor clerk will then look for a floor trader from whom these orders will be bought. On the other hand, with buying stocks online through online trading, a stock broker will still be needed, as the broker will be the one to connect to the exchange network and search for the buyer or seller according to the stocks being ordered by the online investor. With this, an online broker will be required.
There are plenty of discount online brokers today, and each may differ with their features of services and rates of fees. Therefore, it is very essential for an online investor to do some research first about several online brokerage firms available, and compare their rates and types of services being offered. It is very important that he selects the one that would best suit his needs and budget.
We will discuss briefly some of the cheapest online brokers available, and how their services work.
- OptionsHouse – the best stock broker we’ve found! They have NO hidden fees, NO trading activity requirements, and NO minimum balances! OptionsHouse is one of the cheapest brokers with a flat free trades rate of $3.95, with two flexible rates for options trading. Their Research Center gives you the insights you need to make smart investment decisions, which is great when dealing with stocks online. They have on-site customer service with a team of experienced professionals ready to help you with any question or trading emergency – we even tested their support and it was great!
- TradeKing – one of the top online brokers and is quite popular for various reasons. The company has also proven its worth by receiving the award for best customer service in the SmartMoney magazine, since the year 2008. The fee for trading stocks on TradeKing is $4.95 per trade, making it one of the cheapest brokers around. See our TradeKing review.
- Zecco – this is another cheap and best deal online broker there is. It charges $4.95 per stock trade. No minimum amount required to open a Zecco account, and it also offers a potential of being able to trade for free if an investor reach a certain number of trades in a certain period.
- Scottrade – this is one of the cheapest online brokers that an investor can find. It charges $7 for both market and limit orders. They do not charge quarterly or annual fees, thus even if an investor is inactive, Scotttrade will not penalize him for not trading. However, Scottrade charge an additonal fee of 0.5% of the total in addition to the $7 flat commission.
- Firstrade – this is also another cheap online broker, with its $6.95 commissions, but is not very popular. There are no annual or quarterly fees nor minimum opening balance required. However, this discount brokerage service is only recommended for those who you do not really need any help whatsoever. For buying and selling penny stocks that sell for $2 or less, an additional of 1/2 a cent per share is charged on top of the $6.95 commission.
- ChoiceTrade – this online broker has av very simple commission structure, as it charges only $5 for everything — which means that it charges $5 per buy and sell order, may it be market or limit, even for penny stocks. It does not have a required minimum balance to open the account; and this ia a good choice for inactive traders, as there is no inactivity of quarterly fees.