The cheapest online stock trading is of course free stock trading. There are some online brokers that will give you free trades based on certain criteria.
If you open an account you might get 20 trades for free with Broker A. Broker B will give you free trades if you trade size or maintain a certain minimum balance. Another might give you 20 trades a month but charge you pay a fee for subsequent trades.
If you can think of a fee structure there is more than likely several online brokerage firms at any given time advertising it.There are plenty of firms that charge a flat rate per trade or .01 or less a share per trade and some brokerages let you pick from a menu of fee structures to better suit your trading style.
If you trade 1,000 shares blocks it might make sense to go for the $7.95 trade but if you are trading 100 or 200 share lots maybe the penny a share makes more economic sense to you and only you will be able to make that decision because only you know your trading habits.
So you see the cheapest online stock trading will be different for every trader based on the way they trade. Another thing to consider, even though this isn’t an issue as much now in the competitive would of online trading as it used to be, but in the past the cheapest online stock trading brokerages also had some of the worst service.
There is no worse feeling in the world than trying to liquidate a position and have your trading platform go down as your position continues to deteriorate. In one trade you could conceivably lose more money than what you have saved in trading commissions!
Thankfully the market votes with their dollars and any cheap stock brokerages that provide less than stellar service often find themselves with a shrinking customer base as word gets around very quickly in the online trading community.
So how do you get the cheapest online stock trading rates? Simple, search out various online brokers and make an Excel sheet of their fees. Next, review the trades you have made in the past to get an idea of how often you trade and the number of shares and dollar value per trade and pick the best brokerage that fits your needs.
Now do your due diligence and search for everything you can about the broker. Read comments made by people in trading forums, etc. and try and weed out the outliers.
These are the people that obviously are trying to tout the brokerage as being the cheapest online stock trading company and make grandiose claims about the service or on the other end of the spectrum watch out for people that make negative remarks that are based on petty incidents.
The goal is to get a well-balanced overview of the brokerage kind of like the middle of a bell curve before you open an account. If the reviews are bad go back to your worksheet and look at the next cheapest online stock broker and check them out.
Put in a little effort upfront investigating and you will end up saving money on your trades and have an online broker that you can rely on.
