Thursday, September 1, 2011

Brokerage Firms

Lowest Fees

Just 2 Trade - $2.50 a trade.  I've never used it so I can't tell you anything about it.

OptionsHouse - $3.95 a trade.  Probably as good as you will find.  Difficult to use and navigate but if all you want to do is trade, they can save you a lot of money.  Plus you get a bonus for signing up!  Also, if you move your brokerage account to them from someone else they will cover up to $100 of the transfer fee your old brokerage house will charge.  Most other brokerage houses will give you some sort of bonus as well.

Zecco - $4.95 a trade.  A little less difficult to use than optionshouse but still not great.

Scottrade - $7 a trade.  Never used it.

Charles Schwab - $8.95 a trade.  Very simple navigation.  In addition, you can get their ATM card and never pay an ATM fee again.  They will reimburse you no matter how high the fee is and no matter how many times you use it.

One thing to keep in mind with the smaller brokerage companies:  Many do not participate in DRIPs (Dividend ReInvestment Program) the way the larger brokerage companies.  For instance, let's say you have 5 shares of a company that is $200 a share ($1,000) and it is paying a 2% quarterly dividend and you have signed up for the DRIP program.  If this is invested with Charles Schwab, you will get $20 reinvested back into the stock for free and you will end up with 5.1 shares after one quarter.  If it is invested with optionshouse, however, they will not reinvest the money unless it is equal to a full share.  In our example you would end up with 5 shares and $20 dollars after one quarter.