Day traders have particular needs when it comes to online stock brokers. Because they specialize in buying and selling stocks at a rapid pace, often closing all of their trades on the same day they initiated them, day traders need a platform that's safe, fast, and reliable, and with low fees. Here are our picks for the best day trading app.
Leading Stock Trading Platforms for Day Trading
1. E*TRADEE*TRADE is one of our favorite stock brokers. Like many other brokers, it's fee-free. You can trade stocks, ETFs, and options trades commission-free (although you will have to pay a 65 cent contract fee for options). E*TRADE offers the price of a discount broker with all the bells and whistles of a full-service provider. You can trade in 77 international markets, and even get integrated checking with E*TRADE bank.
2. TD AmeritradeTD Ameritrade is another great stock broker. With a fee of $0 per trade, it's as good a price as you'll find anywhere. Its research, apps, and platforms are excellent. The service's proprietary thinkorswim platform was designed with serious, active traders in mind. Not only will you execute trades at a rapid-fire pace, but you'll also have access to completely customizable charts, real-time assistance from a trading specialist, notifications delivered to your desktop or app, and a social network of active traders.
3. Ally InvestAlly Invest is a great choice for traders who want to cut back on fees. They currently allow you to trade stocks at $0 per trade, which is an incredible offer. For options, the base trading cost is $0, and each option contract is only $0.50. This is one of the best offers out there for day traders.
Relevant: TD Ameritrade vs Ally Invest vs E*TRADE
4. Merrill Edge
If you want to trade stocks and ETFs, then Merrill Edge is another great option. Its self-directed accounts are commission-free, and there's no account minimum. Merrill Edge is the brokerage arm of Bank of America, which means you can have all of your banking and investment accounts in one place. This is especially convenient if you're already a Bank of America customer.
If you're a research junkie, TradeStation is for you. The platform is well known for its excellent research. And the TradeStation store is jam-packed with apps designed for traders by traders to help tailor the platform to your needs. Plus, the company no longer charges a commission to trade stocks and ETFs.
If you're looking for a free trading app with a great interface, then Webull could be for you. This no-fee broker allows you to trade stocks, ETFs, and options completely free. We recommend using it if you're a more experienced trader, and you're just looking for an app to buy and sell stocks easily. Plus, they have a paper trading account, so you can try out your investing strategies before you implement them.
Relevant: Webull vs TD Ameritrade Comparison
7. Charles Schwab
Perhaps one of the most well-known broker companies, Charles Schwab, has a lot of features. While it's not the best app out there for day traders, it could be a good option if you want to occasionally day trade. There is no minimum deposit, and you can trade stocks and ETFs commission-free. However, if you want to buy a transaction fee fund not included in Schwab's no-load fund list, it can be costly, at $49.95.
8. Interactive Brokers
If you are a heavy day trader, then we recommend you look at Interactive Brokers. You need to invest at $10,000, and they do charge $0.005 a trade. You can get a lower price in their tiered pricing structure if you trade more than 100 million trades per month. Interactive Brokers is one of the best places to day trade if you're looking for a lot of trading options. You can trade forex, futures, penny stocks, commodities, options, as well as traditional stocks.
What to Consider When Choosing a Broker for Day Trading
Even the most successful day's work trading the markets can be negated by hefty commissions and margin rates. Day traders need to factor these costs into how much they'll net from a profitable trade. Commission fees for a single day of high-volume trading can run more than a few thousand dollars.
Speed is also of paramount importance. Day traders tend to target volatile stocks in which every second count. An execution delay of only a few seconds can lose big money. Most stock trading platforms offer real-time trading, but with very fast-moving trades, lag times are still possible.
Day Trading stocks online have the potential to create behavioral risks. Here are few.
- Perhaps the biggest is the potential for it to become an addiction. The internet makes trading easy. This could tempt you to trade more than is necessary or reasonable. This is largely the force behind day trading, which would not be possible without online trading.
- Whether or not day trading is profitable is open to debate. But one fact that isn't is that it generates a lot of trading fees. That's good for brokerage firms but not for traders. Frequent trading can cause investor profits to be eaten up by a large volume of small fees, the kind that doesn't seem particularly threatening at the time they're being incurred. But over time, with excessive trading, they can seriously reduce the return on investment.
- Another significant threat is that online trading — like just about everything on the internet — is deceptively easy. It may cause you to underestimate the risks you're incurring with your investing activities.
- In the end, the quality of your investments, not the ease of trading, is what drives investing success. The speed and ease of online trading could even cause you to ignore important research in favor the perceived pursuit of quick profits.
These are not the types of problems that can be solved with advanced firewalls or passcodes. They require a keen awareness of the risks involved in online trading, a commitment to investment fundamentals, and a strong dose of self-discipline.
Keep Your Accounts Secured While Stock Trading
Cyberattacks and security breaches are becoming more common, which is why it's important to keep all of your investments secure. Using a VPN like ExpressVPN when you day trade is just one way to make sure your financial accounts are secured.
A VPN (short for virtual private network), helps keep your transactions secured by encrypting your data. This means that no one can view your purchases online. It's also important to use a reputable broker that has an encrypted website. But having a VPN like NordVPN adds an extra layer of security.
A Word of Caution About Day Trading
- If you're not currently a day trader — but are thinking about becoming one — make sure that you understand the risks before diving in. Becoming a day trader is a big commitment, both of time and money.
- The Securities and Exchange Commission (SEC) requires a $25,000 minimum margin requirement for anyone who executes four or more “day trades” within five consecutive business days.
- If you have less than $25,000 and want to invest, we suggest that you check out this practical guide instead.