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Which Broker is Best?

This is a very tough question and frankly it has no solid answer. Why? Because not all brokerages do all things, and not all of them do what they do equally well! Got that? Lets look and you will see what I mean.

Let us suppose that we really think the XYZ Company is going to fly this afternoon. So you call your broker and tell him that you want to buy 100 shares of XYZ. (The price of XYZ is 50 dollars per share right now). He says okay, and you hang up the phone. The next day you find out that you actually bought XYZ for 53!! What happened? Well, just because you told him to buy it for you doesn’t mean that he placed the order right away! Remember, XYZ was supposed to really fly, and while it was flying, you were losing money. Later we will deal with tricks to help you eliminate a lot of this headache, but do try and find a broker who will get your orders filled quickly!!

There are now a ton of ON LINE brokerages that charge only about 8-12 dollars per trade, and some of them are good choices. (Some, like anything else, aren’t worth anything!)

*NOTE: there is a new breed of online brokerages that offer the newer “instant execution” systems for trading the NASDAQ stocks. Some of these are excellent, but they all charge around 20 dollars or more per trade and don’t handle options or the NYSE.

So you need to shop around and ask a lot of questions to find a brokerage that will do all the things you need, at a decent price. Just for hints, we would look at ETrade, AmeriTrade and Charles Shwabb as decent places to start.

We can tell you what we do, and maybe that will help you in your decisions. We use an online brokerage for simple stock trades. (That’s one account) We use an options brokerage for option trades (that’s account #2), and we use an instant-execution account for very fast trades during the day (that’s account# 3!). It’s very hard to have only one account that does everything real well. (When we find that brokerage, we will be their first customers!!). So, do a little research and come up with the best solution that does what you want to do for the lowest price. (Don’t you wish it were easy?)

We cannot recommend who will be right for you, but if you have a computer, we would suggest at least trying the ETrades and Ameri rades at first. At least they are the cheapest.

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