Which broker is the “best” is difficult to determine because what works for one investor might not work for another.
However, if you’re into day trading or active stock trading, Interactive Brokers is almost always going to be the cheapest option for you. Stock trades are now commission free on U.S. exchange-listed stocks and ETFs.
If you short stocks or trade on margin regularly, then Interactive Brokers is the only obvious choice. Interactive Brokers is in a class of its own in terms of inventory of stocks available to short, and its margin rates are the lowest by far. Margin rates can get as low as 0.5%, though most investors will likely pay closer to 1.7%. As a frame of reference, margin rates at most of the other brokers are well over 7%.
But Interactive Brokers is not just the cheapest option. It’s also one of the best for experienced traders. You have unrivaled access to foreign markets as well as futures and foreign exchange. And Interactive Brokers also gives you access to complex order types that most brokers do not offer (market on close, market on open, pegged to midpoint, etc.)
Is there anything not to like?
Interactive Brokers’ Trader Workstation is designed for a professional investors, so it can be difficult for a beginner investor. I would go so far as to say that a beginner investor could get themselves into trouble with it.
Interactive Brokers has slashed its minimum deposit from $10,000 to $0, and it now offers dividend reinvestment. Furthermore, there are no account minimums or inactivity fees.
So, whether you’re an experienced, active trader or just getting your feet wet, Interactive Brokers is a fine choice for your brokerage account.