Skip to footer

Five brokers' secrets you should know before trading online

Over 17 million investors with the three largest online brokerages – Schwab, E-trade, and TD Ameritrade – are paying more than $1.8 billion every year on trading fees and brokerage services that most of them don’t need, according to a recent NerdWallet study. Here are five brokerage secrets you should know before trading online:

4. Switching brokers can be worth it

Business Wire/File
In 2009, an options analyst for TradeKing wrote the second edition of 'The Options Playbook.' Switching to a deep discount broker like TradeKing may involve a transfer fee from your current broker, but over time you can make up the charge with lower cost trades.

  • By Tim Chen Contributor

Already have one or more brokerage accounts, but wishing you had a different one? It’s not too tough to switch brokers, though one of the most cumbersome fees you’ll encounter in the trading process is the ACAT fee: the transfer fee you face if you choose to take your money elsewhere. That said, it really can pay off in just a few months.

We did the math: TD Ameritrade charges $9.99 per trade and has an account transfer fee of $75. Meanwhile, TradeKing weighs in at $4.95 per trade. If you make one trade per month, you will be saving money in 15 months. If you switch to a deep-discount broker, such as Lightspeed Trading ($1 per trade), you can be saving money in less than nine months.

4 of 5
You've read  of  free articles. Subscribe to continue.