Best brokers for day trading of May 2024
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BLUEPRINT
Updated 1:59 p.m. UTC April 12, 2024
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Aspiring day traders must have the right brokerage tools at their disposal to improve their chances of turning a profit. Some of these tools include advanced charting, access to margin for leverage, technical analysis and real-time market data.
“Day traders need a brokerage (that) offers ultralow latency and real-time market data,” says Richard Gardner, CEO at Modulus.
To narrow down the best brokerage for data traders in 2024, we ranked nearly 20 firms based on several weighted factors in the following categories: range of offerings, features, trading costs, account minimums and fees, margin interest rate, customer service, and security.
Best brokers for day trading
Interactive Brokers
E*TRADE
Fidelity
Webull
Robinhood
TradeStation
Compare the best brokers for day trading
| BROKER | COMMISSION-FREE STOCK TRADING | LEVEL II QUOTES | MARGIN INTEREST RATE UNDER $10,000 |
|---|---|---|---|
Interactive Brokers
| ✔
| ✔
| 6.83%
|
E*TRADE
| ✔
| ✔
| 13.20%
|
Fidelity
| ✔
| ✔
| 12.58%
|
Webull
| ✔
| ✔
| 9.49%
|
Robinhood
| ✔
| ✔
| 11.75%
|
TradeStation
| ✔
| ✔
| 12.50%
|
Methodology
We reviewed and researched some of the largest online brokerages available in the U.S. to rank the best ones available on the market today.
For our rankings, we sent a digital survey consisting of more than 70 queries to each company we reviewed. Our researchers verified the survey data and confirmed any missing data points by contacting each company directly and via online research.
Among the brokerages considered, the seven that made our list excelled in areas across the 10 major categories (with weightings): range of offerings, trading costs, account minimums and fees, features, advisory services, insurance, customer service, education/research, security, margin interest rate and cash interest, and portfolio analysis.
- Within each major category, we considered several subcategories, combining them to give an overall score for that category, which we then weighted to calculate an overall ranking of the exchanges.
- Data points were scored on a 0.00 – 1.00 scale. The top raw score was 0.82, which curved to a 5-star rating as the highest possible score.
For scoring the range of offerings, we looked at whether the brokerage offered the following: stocks, bonds, mutual funds, exchange-traded funds, options, forex trading, futures, international stocks, fractional shares, cryptocurrency and over-the-counter (OTC) stocks.
Trading costs, such as commissions, were scored on a comparative scale. The following variables were scored for trading costs:
- Stock commission.
- ETF commission.
- Options commission (discounts for options trading).
- Futures commission (fee to open/close).
- OTC stock fee (minimum balance required).
- Broker-assisted commission.
For the account minimums and fees category, the following variables were assessed:
- New account bonus.
- Free ACH deposits and withdrawals.
- Inactivity fee.
- Account closure fee.
- Transfer account fee.
- Domestic wire fee.
- International wire fee.
- Deposit with a bank card.
The insurance category reviewed whether the brokerage has Federal Deposit Insurance Corp. and Securities Investor Protection Corp. protections, additional asset protections, and additional insurance.
Why other brokers didn’t make the cut
Because the needs of day traders tend to be unique and extensive, not all of the brokerage platforms we surveyed met the cutoff score for inclusion in this set of rankings.
The scoring methodology placed a heavy emphasis on features. The best brokerages for day traders featured above typically had robust, well-developed desktop-based platforms with strong functionality and technical capabilities, including advanced trading tools, customizable interfaces or comprehensive charting. Other features like a paper trading simulator, strategy backtesting and automation are also critical for day traders.
Trading costs also received a high emphasis in our scoring criteria. Given the high volumes day traders often execute, keeping fees low is paramount for success. Brokers who charged zero commissions for stocks, ETFs and options and low fees for futures and other assets therefore scored higher in our rankings.
Finally, other standard brokerage features like a firm’s range of offerings in terms of tradable securities, customer service and margin interest rates played smaller, albeit still notable, roles in the rankings. These are general quality-of-life features that are neither specific nor critical for day traders but can significantly enhance their experience if implemented correctly.
Methodology
We reviewed and researched some of the largest online brokerages available in the U.S. to rank the best ones available on the market today.
For our rankings, we sent a digital survey consisting of more than 70 queries to each company we reviewed. Our researchers verified the survey data and confirmed any missing data points by contacting each company directly and via online research.
Among the brokerages considered, the seven that made our list excelled in areas across the 10 major categories (with weightings): range of offerings, trading costs, account minimums and fees, features, advisory services, insurance, customer service, education/research, security, margin interest rate and cash interest, and portfolio analysis.
- Within each major category, we considered several subcategories, combining them to give an overall score for that category, which we then weighted to calculate an overall ranking of the exchanges.
- Data points were scored on a 0.00 – 1.00 scale. The top raw score was 0.82, which curved to a 5-star rating as the highest possible score.
For scoring the range of offerings, we looked at whether the brokerage offered the following: stocks, bonds, mutual funds, exchange-traded funds, options, forex trading, futures, international stocks, fractional shares, cryptocurrency and over-the-counter (OTC) stocks.
Trading costs, such as commissions, were scored on a comparative scale. The following variables were scored for trading costs:
- Stock commission.
- ETF commission.
- Options commission (discounts for options trading).
- Futures commission (fee to open/close).
- OTC stock fee (minimum balance required).
- Broker-assisted commission.
For the account minimums and fees category, the following variables were assessed:
- New account bonus.
- Free ACH deposits and withdrawals.
- Inactivity fee.
- Account closure fee.
- Transfer account fee.
- Domestic wire fee.
- International wire fee.
- Deposit with a bank card.
The insurance category reviewed whether the brokerage has Federal Deposit Insurance Corp. and Securities Investor Protection Corp. protections, additional asset protections, and additional insurance.
Why other brokers didn’t make the cut
Because the needs of day traders tend to be unique and extensive, not all of the brokerage platforms we surveyed met the cutoff score for inclusion in this set of rankings.
The scoring methodology placed a heavy emphasis on features. The best brokerages for day traders featured above typically had robust, well-developed desktop-based platforms with strong functionality and technical capabilities, including advanced trading tools, customizable interfaces or comprehensive charting. Other features like a paper trading simulator, strategy backtesting and automation are also critical for day traders.
Trading costs also received a high emphasis in our scoring criteria. Given the high volumes day traders often execute, keeping fees low is paramount for success. Brokers who charged zero commissions for stocks, ETFs and options and low fees for futures and other assets therefore scored higher in our rankings.
Finally, other standard brokerage features like a firm’s range of offerings in terms of tradable securities, customer service and margin interest rates played smaller, albeit still notable, roles in the rankings. These are general quality-of-life features that are neither specific nor critical for day traders but can significantly enhance their experience if implemented correctly.
Final verdict
According to our methodology, the best brokerage platform for day traders in 2023 is IBKR.
The firm has long excelled at catering to the needs of retail investors, professional investors and those in between with its sophisticated and powerful desktop platform. TWS offers a variety of features, including Risk Navigator, Model Navigator and Options Analytics. All three provide powerful tools for day traders looking to put strategies into play while managing risk and sizing positions effectively.
IBKR’s direct market access and wide range of orders greatly benefit traders looking for the best possible order execution. The platform’s real-time monitoring capabilities allow day traders to easily stay on top of their watchlists, alerts, profit and loss, trade activity, and margin requirements.
This, in addition to access to a massive range of global markets and tradable securities and coupled with attractive fee structures with tiered discounts based on volume, makes IBKR a strong contender for day traders.
And if you’re planning to use a brokerage for a purpose other than day trading, here are other lists you may want to review and consider:
Frequently asked questions (FAQs)
While investors can purchase stocks directly from issuing companies using a direct stock purchase plan via a transfer agent, day trading requires a broker due to the high volume and frequency of transactions.
The broker is a necessary intermediary between you and the markets when executing trades at the best price. In addition, brokers often provide the tools and data day traders rely on.
There isn’t a required amount of money to buy and sell stocks within a single trading day, but there are requirements to meet if you plan to make a living doing it.
The Financial Industry Regulatory Authority (FINRA) and your broker may classify you as a “pattern day trader” if you place four or more day trades within a five-business-day period and the number of day trades is more than 6% of your total trading activity for that same five-day period. Pattern day traders must maintain a minimum equity of $25,000 in their margin account at all times before trading.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
