Best Online Brokers for Day Trading 2021

Interactive Brokers earned the top spot in our listing thanks to its powerful Trader Workstation platform, easy access to a vast selection of global markets and rock-bottom trading commissions. These features and more make Interactive Brokers the preferred trading platform for professionals at hedge funds and investment firms.

In our research, we found that Interactive Brokers stood out by charging substantially lower fees than its rivals in several areas. It’s IBKR Pro tiered pricing plan offers better rates for direct access trading than other leading trading platforms for professionals. We also noted lower commissions for futures trading, and the lowest margin rates among the platforms we surveyed.

Note that $0 stock commissions are available on Interactive Brokers’s IBKR Lite platform for non-professional traders.

We were impressed by the flagship Trader WorkStation platform and the quality of order execution. Trader WorkStation offers highly customizable alerts, watchlists and sophisticated charting. It features advanced order types. Traders can stay on top of the news with the latest reports from Reuters, Dow Jones and a variety of other sources on the platform.

Trader WorkStation includes essential features for day traders, such as hot keys, which allow traders to rapidly place preset orders with the stroke of a single key. Traders also have access to Level 2 quotes, which show the best bid and ask prices from each market participant. Time and sales data, sometimes known as “the tape” is also available. This is a streaming record of all stock transactions made throughout the trading day, including trade size, price and time.

A total of 135 markets in 33 countries are available for trading. Interactive Brokers clients can trade global stocks, options, futures, currencies, bonds and funds all from a single platform.

Accounts can be funded in multiple currencies and assets can be denominated in multiple currencies. Clients can trade a dizzying range of markets—from stocks on the Mexican Stock Exchange to futures on Italy’s Borsa Italiana. Penny stocks and fractional share trading are also available.

Quality of order execution is of paramount importance to day traders. Direct market access is available for both stocks and options, allowing traders to decide how they want their orders to be routed.

To facilitate optimal order execution, Interactive Brokers created a software product called Smart Routing, which continually scans competing markets and automatically routes orders directly to the best ECN or market center.

IHS Markit, a third-party provider of transaction analysis, determined that Interactive Brokers’ US stock price executions were significantly better than industry rivals during the first half of 2020; with a net price improvement of $0.62 versus an industry average of $0.15.

TD Ameritrade has top rankings in our listing of the best online brokers for its mobile app and its beginner-friendly options. The latter can also pertain to new day traders learning the ropes, since TD Ameritrade has the most extensive educational resources of any day trading platform in our survey.

TD Ameritrade’s education center includes in-depth coverage of technical analysis and different day-trading strategies. For example, you’ll find material on topics including momentum trading and how to trade using Fibonacci retracements, pivot points and classic chart patterns.

Educational content is offered in multiple formats, ranging from immersive courses to videos, articles, webcasts and even live events.

Paper trading is an excellent tool for testing and refining your plan of action in the market. The paperMoney simulator on the thinkorswim platform allows you to apply your day trading strategies in live market conditions without risk. Scanners within the platform are available to identify interesting stocks for day trading.

TD Ameritrade offers what it calls advanced order routing technology, and the majority of market orders executed are filled at a better price than the nationally published quote. However, this broker receives payment for order flow and direct routing for equities orders is not currently available.

In the world of day trading, a split second can make the difference between a profitable trade and a loss. As its name suggests, Lightspeed Trading has worked hard to ensure that customers can execute their trades and receive market data as rapidly as possible, with a tight focus on serving professional and institutional traders.

The Lightspeed Trader platform has been stripped down to focus on data and order execution, without unnecessary bells and whistles. The platform is ultra-low latency, highly stable and intimately customizable. The technology and features of Lightspeed Trading are designed to enable traders to seize market opportunities lightning fast.

Scanners are a key tool that helps day traders find volatile stocks or stocks that are near key price levels. Lightspeed’s scanner, Lightscan, offers unique analytical tools, such as net change (the change from beginning of the period to last price) and H/L (showing whether the stock is currently at the high or low of the period). Another useful feature is Lightspeed’s scanner for block trades, which allows you to track the activity of large traders and institutions by scanning for sizable trades.

Time and sales data and Level 2 quotes are available for both stocks and options. The platform has a short location feature that indicates whether a stock is easy to borrow for short trading, would require extra effort to locate or is not available at all for borrowing. The Social Sentiment tool leverages data from Twitter and social media to capture financial market sentiment about a specific security.

As a direct access broker, customer orders can be routed to over 100 destinations, including exchanges, market makers and dark pools. Orders can be configured and executed efficiently with keyboard shortcut hot keys. Charts are also optimized for speed.

Lightspeed performed well in our customer service tests. We were able to quickly reach a representative and not left on hold. Their team offers personalized support, and clients can choose to be assigned an account representative to work directly with them.

New account promotions are sometimes offered, such as a three month special where clients get a 50% rebate on their commissions. After three months, a lump sum in cash is given for half of the commissions generated.

Founded in 2003, Cobra Trading is geared toward professional and institutional traders. Cobra Trading shines in several areas, including short selling, commission rates and customer service.

In our tests customer service was very good across the board. We received fast, helpful responses via phone, email and human chat. Unlike the larger firms there is no need to navigate various automated menus before reaching a live representative.

The human operated chat is very convenient and something that rival Lightspeed Trading lacks. All of the customer service agents at Cobra Trading are licensed professionals, many with substantial trading industry experience.

Cobra’s day trading platform, TraderPro, is well equipped with advanced charting capabilities. It features Level 2 quotes, hot keys and a locator to find stocks to borrow for short trading. TraderPro offers a decent level of customizable features for trading alerts, news and watch lists.

One downside to watch out for are platform fees. Unless you trade more than 200,000 shares per month, you will need to pay a $100 monthly fee for the TraderPro platform. In order to get direct order routing options, you’ll pay $125 a month for Cobra’s DAS Trader Pro—this fee is waived if you trade 250,000 shares a month. Other platform features may also incur fees unless monthly trading volume minimums are met.

TradeStation gets an honorable mention in our listing, thanks to its combination of long-tested trading technology and in-depth research resources. Since the late 1980s, TradeStation—then called Omega Research—has been known for powerful tools that let day traders develop and back-test their trading strategies against historical market data and generate buy and sell alerts.

The TradeStation desktop platform lets day traders back-test, optimize and fully automate their trading strategies in the stock and futures markets. Trading strategy back-testing can draw from over 50 years of historical daily price data.

The TradeStation platform makes it easy to test strategies across different time frames and provides a wealth of statistical data in the performance report, including key metrics such as profit factor and maximum drawdown.

One of the platform’s unique features is EasyLanguage, a simple programming language which can be used to create powerful trading indicators, strategies and custom trading applications using English-like statements. This feature is unique among the ones offered by professional trading platforms.

Short selling is a key strategy deployed by day traders. Cobra Trading is geared towards the needs of professional day traders in the equities and options markets. They also offer futures trading through their Venom Trading division. Cobra Trading offers a strong range of platforms, competitive commission rates and reliable customer support.

One area where Cobra Trading stands out is in making it easy to short sell low priced securities and penny stocks. Easy to Borrow (ETB) lists are regularly updated by brokerage firms and made up of highly liquid stocks that can be sold short immediately. However, some stocks favored by day traders are not so readily available for short selling. These are often small cap or penny stocks that are attractive in part because they are highly volatile.

Cobra Trading has access to multiple locate sources including those of their clearing firm, Wedbush Securities, which has free HTB (hard to borrow) locates. Locate sources are the various securities lending firms where clients can locate and borrow hard to borrow shares. The DAS trading platform offered by Cobra Trading has a locate monitor window where you can check inventory from four different locate sources. Having multiple sources gives traders a better chance of being able to find the shares they may be targeting for selling short.