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By
Rocco Pendola
Paul Curcio
David Tony,
CNN Underscored Money
Published 6:47 AM EDT, Thu May 30, 2024
Day trading — there’s more to the name than meets the eye.
While day trading absolutely does refer to buying and selling stocks and other securities on the same day, regulators have the ultimate say in precisely who is — and who isn’t — a day trader. Once you know the parameters, you’ll know if you will be classified as a day trader, an aspiring day trader or another type of trader altogether.
From there, you can determine the best day trading platform for your needs, taking how frequently you trade and other important factors, such as risk, into account. Our analysis of the best platforms for day trading considers different types of frequent trading with a focus on the official definition of a day trader.
Methodology
To determine the best day trading platforms, our editorial team started with 24 firms, including both traditional brokerages, usually with brick-and-mortar locations, and investment platforms from fintech (financial technology) companies. From there, we evaluated each company based on seven main factors, with a focus on available investments, fee structures, payment for order flow (PFOF) and order execution quality, given that these are all important factors to consider for day trading.
Below, view our complete methodology that explains how we arrived at our list of best day trading platforms.
Show summary
-
Fidelity Investments
: Best overall day trading platform
-
Merrill Edge
: Best for Bank of America clients
-
Firstrade
: Best for generalist option traders
-
Moomoo
: Best for traders focused on price action
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Robinhood
: Best for basic trading and a subscription service with strong perks
-
Charles Schwab
: Best for investors who want to trade with a legacy brokerage
-
Public
: Best for day traders who execute basic option strategies
-
Interactive Brokers
: Best for large-size day traders who want a pro-level platform
-
Webull
: Best for option traders who use advanced strategies and trade frequently
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E*TRADE
: Best for long-term investors, who trade occasionally
Fidelity Investments
Best overall day trading platform
Tradable asset classes
Seven
Commissions & fees
$0 stock & ETF commissions/$0.65 per option contract
Accepts payment for order flow
No
5/5
Why we picked it
For new and experienced traders, Fidelity has all of the bases covered, making it the highest-rated trading platform for all types of day traders.
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Fidelity’s Active Trader Pro platform is free for all users. It combines an easy-to-use interface suitable for beginners with advanced features more experienced day traders require. Fidelity offers two elevated service levels — Active Trader Services and Active Trader VIP.
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Active Trader Services requires, according to Fidelity, a portfolio value of “$250,000 or complex trading needs” and is available to traders who have made “120+ stock, ETF, or option trades in the past 12 months.” Active Trader VIP is for clients with $1 million or more in Fidelity accounts, who have made “500+ stock, ETF, or option trades in a 12-month period.” Both levels include competitive margin interest rates, special offers, expedited customer service and special webinars and events.
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Fidelity’s Active Trader Pro platform includes Level II quotes for traders who make more than 72 trades per year. Level II quotes allow investors to look beyond a stock’s current bid and ask prices and see who’s placing buy and sell orders, at what prices and for how many shares.
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Fidelity’s basic trading dashboard is ideal for beginners with real-time data and easy trade execution, watchlists and custom alerts. The Active Trader Pro platform adds more sophisticated analysis, customization tools and streamlined trade organization and execution for more comfortable and experienced day traders.
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As a brokerage, and separate from its trader-specific platforms, Fidelity charges zero commissions on all stock, exchange-traded fund (ETF) and options trades. Option trades carry a $0.65 per contract fee.
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Active day traders often choose to trade within a margin account rather than a cash account, which requires that you have enough cash to cover all purchases in full. Fidelity offers competitive margin interest rates, starting at 13.6% on balances of less than $25,000, as of May 2024. These rates decrease as your margin loan balance increases, hitting 12.1% for balances between $100,000 and $249,999 and bottoming out at 9.3% on balances of $1 million or more.
Pros
- Low commission and fee structure
- Easy-to-use, intuitive trading platforms at all levels
- Offers fractional share trading
Cons
- While competitive, you can get better margin rates elsewhere
Who should use it?
Fidelity is a solid choice for beginners to the most experienced day traders.
Merrill Edge
Best for Bank of America clients
Tradable asset classes
Six
Commissions & fees
$0 stock & ETF commissions/$0.65 per option contract
Accepts payment for order flow
No
Why we picked it
Merrill Edge is part of Bank of America. Therefore, Merrill clients have access to the brick-and-mortar BofA branch network, which includes in-person service from financial advisors for clients with balances of $20,000 or more. In addition, all Merrill Edge Self-Directed investing clients can utilize the Merrill Edge MarketPro trading platform with no minimum balance, no trade requirements and zero commissions, though Merrill does charge a $0.65 fee per option contract traded.
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Merrill Edge promotes the fact that it does not accept payment for order flow. Payment for order flow introduces a potential conflict of interest between brokers and customers, as it means market makers are able to pay brokers to route retail traders’ order flow to them. The practice may result in better trade execution and more liquidity, but Merrill notes that the “average execution speed for market orders” is 0.007 seconds and the portion “of orders executed at or better than quoted price” on stocks is 99.1%, as of September 2023.
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This said, Merrill Edge doesn’t publish margin interest rates at its website, noting that “Margin interest rates are determined by a few factors, including the base lending rate … your debit balance and your overall relationship with Bank of America and Merrill.”
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Merrill Edge’s MarketPro platform includes Level II quotes and is among the cleanest and most comprehensive trading interfaces we reviewed. MarketPro lets users chart stocks using 105 technical indicators and 23 drawing tools, and it includes straightforward stock screeners and “strategy builders.” Within options chains, it provides maximum gain/loss details, 71 data points to choose from, multi-leg trading and help to identify the best bullish, bearish and neutral strategies.
Pros
- Low commission/fee structure and solid order execution stats
- Easy-to-use, comprehensive and free trading platform
Cons
- Does not publicize margin interest rates
- Active day traders can find better cost structures elsewhere
- Does not offer fractional share trading
Who should use it?
Existing Bank of America customers can benefit most from Merrill Edge’s investing and trading platforms and services.
Firstrade
Best for generalist option traders
Tradable asset classes
Seven
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Accepts payment for order flow
Yes
4/5
Why we picked it
Firstrade tops our list for day traders who specialize in options.
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For starters, Firstrade charges zero commissions to trade stocks, ETFs, mutual funds and options. The only charge you’ll pay to trade options is the few cents per contract collected by regulators. There is also no charge for streaming or real-time quotes. However, Firstrade does not offer Level II quotes.
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While you can find better margin rates elsewhere, Firstrade’s 13.75% interest charge on balances of less than $25,000 is competitive. As your margin loan balance increases (which, of course, has the potential to increase your risk exposure), your margin interest rate decreases. Firstrade charges 12.5% interest on balances between $100,000 and $249,999 and 9.75% on balances of $1 million or more.
Firstrade’s options trading platform is easy to use and showcases intuitive features to help beginners construct, analyze and understand the risk-reward profiles of their trades before they enter them. Option quotes on Firstrade include maximum gain/loss analysis, implied volatility and the Greeks. Firstrade also provides plenty of analysis to help generate trade ideas as well as a robust education platform that includes live events, courses for all levels of traders and a video library.
Pros
- Low commission and fee structure, especially on options
- Excellent platform for identifying, executing and maintaining option trades
- Offers fractional share trading
Cons
- No Level II data
- You can find lower margin rates elsewhere
Who should use it?
Option traders should consider Firstrade.
Moomoo
Best for traders focused on price action
Tradable asset classes
Four
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Accepts payment for order flow
No
4/5
Why we picked it
Founded in 2018, Moomoo is a robust but relatively new platform geared toward day traders. It offers commission-free trading of stocks, ETFs, options (which have no contract fees) and futures on all major US-based exchanges, as well as other leveraged securities traded on the Hong Kong Stock Exchange.
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Its charting platform features 38 drawing tools, 63 technical analysis indicators and, if that’s not enough, the ability for users to build their own indicators. And as long as users maintain a 30-day average account balance of $100, Level II quotes from six order books, including the New York Stock Exchange (NYSE) Arcabook, are free.
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Moomoo advertises margin interest rates starting at 6.8% for balances of less than $25,000. But for traders with smaller accounts who may not be interested in trading on margin, Moomoo also offers fractional share trading in increments as low as $5.
Pros
- Access to major assets classes with no commissions or option contract fees
- Offers fractional share trading and Level II quotes from multiple order books
Cons
- Does not offer trading of bonds or mutual funds
Who should use it?
With Level II quotes from multiple order books and plenty of technical analysis tools, Moomoo is a strong option for day traders focused on price action.
Robinhood
Best for basic trading and a subscription service with strong perks
Tradable asset classes
Five
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Accepts payment for order flow
Yes
Why we picked it
Robinhood says it “believe(s) the financial system should be built to work for everyone.” Therefore, its focus is on education and producing financial news content in a way that’s more accessible to beginners and younger audiences. This approach definitely helps enhance the overall environment for traders, but some advanced traders might find it unnecessary for their purposes.
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Alongside that mission, Robinhood is transparent about how trades get executed. While Robinhood does accept payment for order flow, it claims to route trades for the best possible execution, noting that 95.6% of trades in the first quarter of 2024 were executed at or better than the quoted bid or ask price.
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Robinhood has also jumped on the subscription bandwagon with its recently introduced Robinhood Gold subscription service. The perk that’s likely of interest to day traders is access to Nasdaq Level II data and Morningstar research. Gold members also receive a 5% annual percentage yield (APY) on uninvested cash as well as $1,000 in interest-free margin. Beyond that, margin rates range from 6.75% (for balances up to $50,000) to 5.7% (for balances over $50 million). The cost of a Gold subscription is $5 a month after a free 30-day trial period.
Robinhood offers commission-free stock, ETF, cryptocurrency and option trading. On options, you’ll only be out $0.03 per contract to pay the regulators. This structure makes the brokerage a formidable choice for active traders. Its trading platform is straightforward and easy to use and includes features such as advanced charts and strategy builders.
Pros
- Low commission and fee structure
- $1,000 in interest-free margin with Robinhood Gold
- Offers fractional share trading
Cons
- Level II data only available with Gold subscription
- Trading platform might not be sophisticated enough for advanced traders
Who should use it?
Robinhood is best for investors who can benefit from a Gold subscription’s perks alongside frequent but basic trading.
Charles Schwab
Best for investors who want to trade with a legacy brokerage
Tradable asset classes
Six
Commissions & fees
$0 stock & ETF commissions/$0.65 per option contract
Accepts payment for order flow
Yes
3.7/5
Why we picked it
Charles Schwab enhanced its trading platform when it purchased TD Ameritrade and integrated its thinkorswim trading platform into its brokerage services. While traders can stick solely with Schwab-branded web and mobile interfaces, the thinkorswim ecosystem provides access to real-time, full-depth Level II data; virtual “paperMoney” trading; alerts; a full slate of conditional orders; and advanced charting.
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Schwab charges zero commissions for stock, ETF and option trades but does levy a $0.65 per contract fee on option trades. There are no account minimums or maintenance fees for Schwab brokerage accounts.
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Schwab’s margin interest rate is 13.575% on balances below $25,000. For balances between $100,000 and $249,999.99, the interest rate drops to 12.075%, as of May 2024. Schwab says to contact customer service for pricing on balances of $500,000 or higher.
Schwab distinguishes between its three different thinkorswim platforms, calling the flagship desktop version suitable for “seasoned traders looking for a trading experience that adapts to their style,” whereas the web version is best for “aspiring traders looking for a more approachable trading platform” and those who “want to access essential trading tools from their browser.” The mobile option works best to simulate the desktop experience “on the go.”
Pros
- The thinkorswim platform has solid functionality across online environments
- Low commission and fee structure
- Offers fractional share trading and Level II quotes
Cons
- While competitive, you can find better margin rates elsewhere
- No cryptocurrency spot trading
Who should use it?
Charles Schwab is best for investors looking for a comprehensive trading platform from a legacy brokerage firm.
Public
Best for day traders who execute basic option strategies
Tradable asset classes
Six
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Accepts payment for order flow
Yes (options only)
3.6/5
Why we picked it
Public’s trading platform is another that focuses heavily on option trading.
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Public doesn’t pay for order flow on stocks, but it does with option trading. It takes some of the revenue it produces from payment for order flow and provides option traders with a rebate of up to $0.18 per contract. To start with, Public only hits options traders with a $0.03 per contract fee to satisfy regulators, so, in a way, the brokerage pays you to trade options. Public also offers zero-commission trading on stocks and ETFs.
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That said, Public limits the option strategies you can execute to long calls, long puts, covered calls and cash-secured puts. Public says it plans to include more advanced strategies soon. And while you can open a margin account at Public, which provides the ability to trade with and withdraw unsettled funds, it does not allow users to short securities.
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As with Robinhood, it’s also worth mentioning Public’s cash management account that holds uninvested cash. While all of the names on our list have some type of “sweep” account, Public’s high-yield account leads the field with no fees, no subscription required and, as of May 2024, a 5.1% APY.
Pros
- Low fee and commission structure
- Only brokerage on our list to offer fee rebates on option trades
- Offers fractional share trading
Cons
- Limited options strategies
- Does not offer Level II quotes or shorting of securities
Who should use it?
Public can be a solid option for day traders who execute basic option strategies.
Interactive Brokers
Best for large-size day traders who want a pro-level platform
Tradable asset classes
Seven
Commissions & fees
$0-$0.005 stock & ETF commissions/$0.15-$0.65 per option contract
Accepts payment for order flow
Yes (IBKR Lite only)
3.6/5
Why we picked it
Among the day trading platforms we analyzed, Interactive Brokers is among the most comprehensive in nearly all areas. It’s tough to beat Interactive Brokers for investment selection, the power and utility of its trading platforms and tools and, importantly, its super-low commission and fee structure. That said, the way Interactive Brokers markets its offerings on its website can be confusing, particularly for individuals new to trading. IB is a top choice of professional investors, including financial advisors and hedge fund managers. So, if you go with the platform as a retail investor, realize you’re in company with at least some of the so-called “smart money.”
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Interactive Brokers offers two types of accounts: IBKR Lite and IBKR Pro. While there’s no minimum balance requirement for either account and both have access to the firm’s Trader Workstation interface, IBKR Pro users benefit from volume discounts in several equity categories. In a nutshell, IBKR Pro tends to be more suitable and cost-effective for active traders who don’t deal exclusively in stocks and ETFs and trade frequently on margin.
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For example, with IBKR Lite, you pay $0 stock and ETF commissions. If that’s all you trade, look no further. However, if you frequently trade other assets, such as options and futures, IBKR Pro can make more sense. While IBKR Pro users must choose between a fixed $0.005 per share commission ($1 minimum) or a volume-based, tiered structure of between $0.0005 and $0.0035 per share on stock trades ($0.35 minimum), they enjoy significantly lower commissions on options and futures trades than IBKR Lite users.
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The other notable difference between Lite and Pro as it pertains to commissions: differences in order execution. As discussed below, there’s a balance to strike between commissions and payment for order flow. Interactive Brokers receives payment for order flow for trades executed via its Lite platform (where it charges zero commissions on stocks and ETFs) and does not for trades that occur through Pro (thus the per share or per trade commissions).
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Lite and Pro users have pretty much the same access to Interactive Broker’s powerful trading tools, which include features such as robust technical analysis, algorithmic trading, risk assessment, mobile access and paper trading, but differ on the fees.
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Pro users also receive better interest rates on uninvested cash and margin loan balances. Interactive Brokers keep a margin calculator at its website so you can see what you can expect to pay. As of May 2024, a $25,000 balance in an IBKR Pro account receives a rate of 6.83% versus 7.83% in IBKR Lite.
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The cost of market data subscriptions varies considerably based on the type of data, your account balance and commission generation. IB’s complete fee schedule, which includes pricing for Level II data from various exchanges, including Nasdaq, the NYSE and the Chicago Board Options Exchange (CBOE).
Pros
- Wide investment selection, including asset types and global markets
- Competitive commission, fee and margin interest rate structure
- Offers fractional share trading and Level II quotes
Cons
- Cost structure can be confusing (though Pro is clear choice for active traders outside of stocks and ETFs)
- Extensive selection of available market data and research subscription options means costs can add up quickly for users with heavy data demands
Who should use it?
Large-size day traders who want to trade in a professional environment should seriously consider Interactive Brokers.
Webull
Best for option traders who use advanced strategies and trade frequently
Tradable asset classes
Five
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Accepts payment for order flow
Yes
3.5/5
Why we picked it
Similar to Firstrade in that it targets option traders, Webull charges nothing to trade stocks, ETFs and options (you will pay $0.55 per contract to trade index options) other than a few cents per option contract to cover regulatory fees.
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Webull supports 11 different options strategies and offers advanced and customizable tools, such as options chains you can trade directly from. Option accounts come with real-time data from the Options Price Reporting Authority (OPRA) and CBOE. Webull’s trading platform also performs well when trading stocks, ETFs and other asset classes. When you sign up with Webull, you receive one month of free access to Level II data from Nasdaq. After the free period, Webull charges for this data.
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Margin interest rates are competitive at Webull, starting at an impressive 9.74% for balances of $25,000 or less. Between $100,000.01 and $250,000, you’ll pay 8.74%. The rate drops to 6.74% on balances between $1,000,000.01 and $3 million and just 5.74% on anything higher than $3 million.
Like many of its competitors, Webull has desktop, web and mobile app versions of its trading platform. While not completely seamless, you can access most features in all three environments, including extended hours trading, paper trading, advanced charting, dozens of indicators, alerts, screeners and watchlists. Cryptocurrency trading is available through a companion app, Webull Pay.
Pros
- Low commission and fee structure
- Competitive margin rates
- Offers fractional share trading and Level II quotes
Cons
- Platforms might feel too advanced for new or inexperienced day traders
Who should use it?
Frequent options traders who use advanced strategies will want to check out Webull for its attractive commission and fee structure and competitive margin interest rates.
E*TRADE
Best for long-term investors, who trade occasionally
Tradable asset classes
Six
Commissions & fees
$0 stock & ETF commissions/$0.65 per option contract
Accepts payment for order flow
Yes
3.5/5
Why we picked it
E*TRADE is a division of legacy investment firm Morgan Stanley. As a result, E*TRADE integrates Morgan Stanley’s proprietary research into its brokerage services, which includes one of the best education centers of all the brokerages we reviewed, as well as its trading platform.
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With E*TRADE, you’ll pay zero commissions on stocks, ETFs and options and a $0.65 fee per option contract, which decreases to $0.50 per contract if you execute at least 30 stock, ETF or option trades per quarter. If you’re at this level, you’ll likely want to move away from E*TRADE’s general investor platform, opting instead for the Power E*TRADE, available in web and app versions.
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While Power E*TRADE promotes no platform or data fees, its fine print does indicate that some Level II subscriptions can incur a charge. That aside, Power E*TRADE includes excellent tools, including advanced technical analysis, an “earnings move analyzer,” trade risk/reward analysis, screeners, customizable option chains and access to live news and events.
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Smaller investors might find E*TRADE’s margin interest rates are a bit high. As of May 2024, E*TRADE charges 14.2% on margin balances of less than $10,000 and 13.95% from $10,000 up to $25,000. Between $100,000 and $249,999.99, you’ll pay 12.7%. E*TRADE asks that users call for rates on loan balances of $500,000 or more.
Pros
- Low fee and commission structure
- Access to Morgan Stanley research
- Offers fractional share trading (ETFs only) and Level II quotes
Cons
- Margin rates are relatively high, especially for small investors
- Level II data comes at a cost
Who should use it?
E*TRADE works best for long-term investors who day trade occasionally.
Our picks at a glance
| Company | Tradable asset classes | Commissions & fees | Accepts payment for order flow |
|---|---|---|---|
Fidelity Investments | 7 | $0 stock & ETF commissions/$0.65 per option contract | No |
Merrill Edge | 6 | $0 stock & ETF commissions/$0.65 per option contract | No |
Firstrade | 7 | $0 stock & ETF commissions/$0 per option contract | Yes |
Moomoo | 4 | $0 stock & ETF commissions/$0 per option contract | No |
Robinhood | 5 | $0 stock & ETF commissions/$0 per option contract | Yes |
Charles Schwab | 6 | $0 stock & ETF commissions/$0.65 per option contract | Yes |
Public | 6 | $0 stock & ETF commissions/$0 per option contract | Yes (options only) |
Interactive Brokers | 7 | $0-$0.005 stock & ETF commissions/$0.15-$0.65 per option contract | Yes (IBKR Lite only) |
Webull | 5 | $0 stock & ETF commissions/$0 per option contract | Yes |
E*TRADE | 6 | $0 stock & ETF commissions/$0.65 per option contract | Yes |
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Why consider a day trading platform?
- High-level technical analysis: Most brokerage firms offer some type of technical analysis somewhere in their trading platform, typically under the research tab, alongside stock quotes or when you place an order. However, if you plan to trade frequently, you might need to go beyond the basics. Platforms built for day traders tend to have advanced technical analysis and charting capabilities.
- Advanced trading: Day trading platforms sometimes offer advanced trading options. These features include allowing the trader to set multiple conditions around an order before it can be executed or detail specific routing instructions for trades. In our reviews, we detail the firms that offer trading options for experienced investors.
- One-stop shop for all of your trading: Maybe you trade stocks and options, keep money in a broad-market ETF and dabble in foreign markets or currency trading. In our analysis, we considered the presence of multiple investment options so you can see all of your activity in one place without having to log in to multiple accounts. Typically, brokerages focused on the general investor don’t include such wide-ranging access.
What is day trading?
A day trade is simply buying and selling — or selling and buying — the same stock or other security within the same trading day. However, merely making a day trade here or there doesn’t make you a day trader, at least not in the eyes of the federal government.
According to the Financial Industry Regulatory Authority (FINRA), you are a “pattern day trader” if you “execute four or more ‘day trades’ within five business days — provided that the number of day trades represents more than 6 percent of your total trades in the margin account for that same five business day period.”
Pattern day traders must:
- have a margin account with a minimum of $25,000 in account equity. This can be a combination of cash and eligible equities.
- maintain this $25,000 level or have their day trading privileges revoked.
- trade within their “day trading buying power,” defined by FINRA as, “up to four times the maintenance margin excess as of the close of business of the prior day”, with maintenance margin excess being “the amount by which the equity in the margin account exceeds the required margin.”
FINRA has these regulations in place to help offset the inherent risk of day trading and protect brokerages and traders.
Official definitions aside, you might trade less frequently than what requires the $25,000 minimum. You might be a “swing trader,” which means you typically trade short term but over the course of several days or weeks, not during the same day.
No matter what you call yourself — or the regulators call you — you’ll likely find a trading platform built for day traders useful, if not necessary, for your flavor of frequent trading.
Costs of day trading platforms
While zero-commission stock trading is commonplace at many online brokerages, this is not always the case at brokerages with robust day trading platforms. In our rundown of the top day trading platforms, we detail fee structures and weigh them heavily in our rankings.
The tiered pricing structures many day trading platforms use can be confusing. While most of the names on our list offer no-commision stock trading for all or some investors (this is usually dependent on which account level you select), not all do. This isn’t necessarily a red flag. There’s just a balance only you can strike based on what you know about your trading activity.
Generally, trading-focused brokerages that charge commissions on stock, bond and ETF trades do so for two primary reasons:
- They operate sophisticated platforms, and commissions help pay for these advanced features.
- Even more so, they provide direct access to markets (e.g., exchanges, market makers, etc.) of the trader’s choice.
Commission-free trading doesn’t always mean — but strongly suggests — that the brokerage routes orders to specific markets and market makers. These middlemen usually pay rebates to the brokerage. The practice — known as payment for order flow — is somewhat controversial. Opponents argue that in exchange for zero commissions, you might experience less-than-optimal trade execution. Here again, only you can determine if zero commissions or direct routing is better for you.
All of the brokers on our list, with the exception of Moomoo, charge a fee per option contract. Many charge a fee — or require higher minimum balances — for advanced trading platforms. And, of course, all charge interest on margin loans.
What to look for in a day trading platform
Pursuant to our discussion on the balance between trading costs (commissions and other trading and account-related fees), order execution and platform features/sophistication, look for a brokerage where — after your trading is said and done over a specific time period — fees and margin interest eat into your trading profits as little as possible.
Day traders often place large orders and/or execute frequent trades, making money on small moves — often just a few cents or less — in a security. Needless to say, if you’re trading multiple times in a day or week, trading costs can accumulate. Your profits, while potentially impressive over the long haul, need to be large enough to more than offset commissions and fees. To that end, if you pay commission and actually secure better prices on your trades, this edge might make up for the price you pay to secure it.
The other must for most frequent traders is Level II quotes. Provided by Nasdaq and other exchanges, such as the New York Stock Exchange and the Chicago Board Options Exchange, Level II quotes provide traders and investors with in-depth order data. Level II shows a market’s entire order book, which includes details on every buy and sell order for every listed security. This level of access can help traders identify opportunities, assess supply and demand, and forecast market trends and patterns. While this level of data can be tough to decipher for beginners, it’s a must for most advanced traders.
This is where education, specifically paper trading accounts, comes into play. Even some of the most well-regarded day trading platforms on our list offer simulated trading. It’s not only for beginners. This is a way to get a good sense of how fees and other factors will impact the cost and success of your trading before you trade with real money.
Simulation will also allow you to test run other key things to look for in a day trading platform — such as complex order types and high-level technical analysis — in a relatively low-pressure environment.
Customer service in day trading platforms
Ever try to reach the customer service department of your favorite social media app by phone? You probably failed miserably. Speaking to a live person via telephone is becoming increasingly uncommon, with various types of online support the norm throughout the online world.
Most day trading platforms do offer telephone support alongside other methods, such as help center libraries, chat bots, live chat with a human and email. If you have an urgent matter, you’ll likely want to get someone on the phone fast, without going too deep into the rabbit hole of automated menus. For less urgent matters, you might opt for less direct means of communication but still expect a timely response and resolution.
Day trading risks
As the US Securities and Exchange Commission (SEC) warns, “Day trading is not for the faint of heart,” given the speed within which you need to make decisions inside an already potentially risky margin account. During the stay-at-home portion of the pandemic, the SEC sounded the alarm: “Some celebrities and high profile individuals have been vocal about how they have made a lot of money in day trading.”
During these times, day trading and speculating in “meme stocks” became part of pop culture. However, things didn’t necessarily end well for day traders and speculators. In a research note, Morgan Stanley estimated that amateur traders had lost all of the money they made during the pandemic by 2022.
But the carnage was real before the 2021 pandemic surge helped day trading and meme stocks go mainstream. In a 2005 report, the SEC stated, “Day traders typically suffer severe financial losses in their first months of trading, and many never graduate to profit-making status.”
In a nutshell, the risk is real. You can lose a lot of money fast when you day or swing trade. If things go poorly when you trade on margin, there is a chance you could lose considerably more money than your original investment.
Methodology
To construct our list of best platforms for day traders, we examined 24 popular accounts from both legacy brokerage firms and newer, online financial services companies, as determined by our expert editors. We then scored each brokerage account according to six key factors:
Tradable assets classes (35%)
Trading platforms offering the ability to trade more asset classes were scored higher, as they give users more flexibility with their investments.
Option contract fees (20%)
While all the brokerage firms we examined charge no commissions for stock and ETF trades, option contract fees were factored into our ranking, as these costs can eat away at returns over time.
Payment for order flow (15%)
Brokerage firms that receive payment for order flow were scored lower, as this may present a conflict of interest between brokers and customers.
Order execution quality (10%)
The more often a brokerage firm executes orders at or better than the National Best Bid and Offer (NBBO), the higher it was scored. Brokerage firms that do not disclose this information were scored lower.
Minimum to invest (5%)
Brokerage accounts that require a minimum investment amount were scored lower. Although the platforms we reviewed mostly had no or low minimums, this poses another barrier to entry for some users.
Monthly cost (5%)
Trading platforms that charge users a monthly subscription fee were scored lower.
Level II quotes (5%)
Trading platforms that offer Level II quotes, whether for free or at a cost, were scored higher. This is often a must-have feature for day traders who want an in-depth view of the markets.
Fractional share trading (5%)
Trading platforms that offer trading of fractional shares were scored higher, as this feature gives traders of all account sizes the opportunity to transact in higher-priced stocks.
Frequently asked questions (FAQs)
The platform you use to trade is important because it can meaningfully impact your experience and even influence performance. Features such as real-time quotes and alerts, customizable trading tools, advanced analysis and comprehensive education all play a role in maximizing profits. After assessing if the platforms you’re considering have what you need and want, consider the price you’ll pay within the context of your anticipated trading volume.
Speed, reliability and security are all important factors when it comes to trade execution. While you might have to pay a commission to secure the best trade execution possible, it can be worth it if you’re getting better prices for your trades than you would in a no-commission environment. These factors — as well as being able to customize your order types and routing — can work in concert to make one trading platform better than its peers.
Mock trading with paper money in a simulated account and a comprehensive education section are among the features to look for in the best day trading platforms for beginners.
Along with technical analysis comes associated factors such as screeners, backtesting capability, buy and sell indicators and access to real-time data (e.g., quotes, news, company events). These features work with technical analysis and the larger trader platform to help you implement your strategy and develop your style of trading stocks and other investments.
Editorial Disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airlines, hotel chain, or other commercial entity and have not been reviewed, approved or otherwise endorsed by any of such entities.
This content is for educational purposes only and is not intended and should not be understood to constitute financial, investment, insurance or legal advice. All individuals are encouraged to seek advice from a qualified financial professional before making any financial, insurance or investment decisions.
Note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed or may no longer be available.
