1. Trade Commissions
What does it cost to buy shares of stock? Does the fee change based on the type of order or size of order? For example, does it cost less to place a market order than it does to place a limit order or stop loss order? The best any investor can get from a broker are what are known as flat-fee trades, charging a flat rate regardless of the type, price of the stock, or size of the order.
2. Customer Service When picking up the phone or emailing a broker, is a well trained customer service representative ready to assist? How any investor is treated as a client is more important to some than others. But, even for those that don’t rely on customer support that often, to know that they have award winning service there when they need it is comforting.
3. Trading Tools
Trading successfully is a lot easier when investors have great tools at their disposal. A great online broker should offer access to a wide variety of tools to help make the most of each and every trade. From real time streamers to last sale tickers, live news feeds, mobile trading and for some even level II quotes. Tools are essential for the active investor.
4. International Exposure
When comparing brokers find out where they offer services and make sure they offer services in your country. For investors in the United States this is not a problem, but for nearly everywhere else finding a good broker that offers international trading can be difficult.
5. Account Minimums
One of the most common catches of an online broker comes tied in with the account minimum. Investors may think they signed up with no minimum and $x trades but once they place that first order and are charged $15.00+ they are in for a rude awakening (oversimplified example). A good broker will have a minimum deposit of less than $3,000 to gain access to the majority of services, tools, and most importantly flat fee commissions.
6. Other Fees Fees beyond trade commissions include not maintaining a minimum balance, transferring money in and out, or having an overall inactive account. While over time most brokers have grown to exclude any such maintenance fees it is still important to understand as every broker is different. Just like a bank account stock brokers also make a portion of their profits of extra service fees.
7. Market Research
A good online broker will provide a variety of both free and paid market research tools. The key to finding great market research is by looking at the most well known brokers. Etrade and several other discount brokers all provide fantastic research tools.
8. Investment Options
A stock broker should offer access to not only trading stocks, but also mutual funds, ETFs, and options. Most brokers offer these investment options as standard but some will go out and beyond to make the overall experience great. OptionsXpress for example offers its investors access to stocks, options, etfs, mutual funds, bonds, forex, and even futures trading all under the same account.
9. Retirement Accounts
Funding a 401k, Roth IRA or other retirement account is an extra plus that many online brokers offer. Most brokers will go out of their way to try and market retirement accounts to their clients with convenient features, functionality, etc.. Logging into an account and having one click access to both trading and retirement accounts, for example, is a nice benefit for any investor.
10. Banking
The emerging trend for the larger online brokers is to offer banking and other financial services. This goes beyond money market accounts and CDs. Checking accounts and even home mortgages are now more widely available. During the mortgage crisis it surfaced that Etrade was over exposed to mortgages which as a result caused its stock to crash.
11. Account Security
As a growing concern for all investors due to the advancements in computer hacking, scams, and credit fraud, online brokers are investing heavily into account security. Most brokers will have account security information featured on their site and before opening an account take a few minutes to read through their policies. Etrade offers clients a security key that changes passwords every minute, and TradeKing prompts its clients to type their passwords in via onscreen keyboards so it is never saved as a cookie.
12. Speed / Execution
For the active trader execution speed /execution is very important. I won’t rat out any brokers here but I have tested many of them and there can be noticeable differences in trade execution times and quality. For the majority of investors this is really not pertinent as mili seconds of time and saving a penny or two per share on an order isn’t the end of the world, but for active traders it is something to research. (source www.stocktradingtogo.com ) For the latest updates PRESS CTR + D or visit Stock Market news Today
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