Comparison of Online Brokers - Interactive Brokers vs Optionsxpress
Online Broker Reviews and comparison:
When we take our first baby step in investment, we think about opening a trading account.
Previously, the trading was done on market floors and brokers used to shout to buy and sell their stock, options or other trading products. Now, with technology advancement, more and more individual investors are looking for opening their own accounts with online brokers. It gives them more control and visibility of what is happening in their trades and investment account. You don't need to call a human broker when you want to buy or sell your trades. Various online brokers available in the market are: E-Trade, Fidelity, Interactive Brokers, optionsxpress, Schwab, TD Ameritrade, thinkorswim and many more.
When new investors open their first investment account, they are very happy to see everything in their own hands. However, they are faced with two big monsters: lack of skill and online brokerage fees for each trade. These investors need to be excellent in computer and investment skills in order to understand the latest software and graphs to analyze their accounts. Secondly, the online brokerage fees for trades can be quite high sometimes.
Based on these two challenges, here are two choices of online brokers and some comparisons:
List of Recommended Online Brokers:
- OptionsXpress
Trade stocks, options, futures and more in one optionsXpress account. Take advantage of free education, powerful tools and excellent service. - Interactive Brokers
Interactive brokers provide access to stocks, options, futures, bonds, CFDs and funds in 19 countries
Benefits and Comparison of Online Brokers:
OptionsXpress, online broker is very good for starters in investment field. They have good customer service, education system, tools and paper trading facilities. Here, you can learn and the technology is simple. You don't need to be professional in computer or investment skills. They let you open the account for free. However, for opening margin account, you need to put minimum required amount in your account. There is no maintenance fees or inactivity fees. However, the trading cost for each trade can be a bit high when compared to Interactive Brokers trading system.
For instance, if we do the trades in US, the commissions are as follows:
OptionsXpress trading cost per 100 shares: $9.95, whereas, Interactive Brokers trading cost per 100 shares: $1
In Summary,
Advantages of OptionsXpress:
1. Simple to use, easy for first time investors and customers who want easy interface.
2. There is no account opening fees.
3. Good educational tools and virtual trading account.
4. There is no maintenance fees or account inactivity fees.
Disadvantages of Optionsxpress:
1. The trading cost for trades is high as compared to some other low trading cost accounts.
Interactive Brokers is a very popular online trading account among professionals. High technology, availability of latest products, electronic access to trading in many countries, low cost are just some of the benefits of this high demand brokerage account. However, the entry could be difficult as it lets only experienced traders to open an account. The initial amount required for opening could be very high too. For inactive traders, the maintenance fees could be a big drawback too. However, for professionals, this is the best tool.
In Summary,
Advantages of Interactive Brokers:
1. Cheapest trading cost when compared to various brokers like Optionsxpress, E-Trade, Fidelity, Schwab, thinkorswim, TD Ameritrade, etc. The trading cost is almost one tenth as compared to other online brokers. This difference is significant and it works to the advantage of all those who decide to use it.
2. High technology and availability of latest products in the online system is another benefit of Interactive Brokers. It lets you use web trading or stand-alone platforms with excellent features to make your trading done with ease and simplicity.
3. Good customer feedback and virtual trading account. You can learn trading by doing it fake. It lets you put virtual money and give you the taste of trading without investing real money. The platform and educational videos are a big advantage.
Disadvantages of Interactive Brokers:
1. The new investors are not allowed to open the account.
2. The initial amount required to open the account is high.
3. There is maintenance fees if there is inactivity.
4. The customer feedback can be slow sometimes and you need to wait and wait.
This is a short summary and review about online brokers for anybody who needs some guidance in deciding which online trading account is best for them.
List of useful finance articles:
- Currency tutorial: Benefits of 4x Currency Trading
This basic currency tutorial list all the benefits of 4x currency trading over other products like stocks, options. High liquidity, good leverage, low transaction costs are some of the benefits of currency trading. - How parents can teach money management to young children?
Parents can teach simple money skills to children which can help them to become givers instead of takers in their adult life. They need to learn to divide their pocket money in four groups: give, invest, save and spend. - How to be rich and make money using dividends?
Dividends make good money and provide cashflow. REITs, Real Estate Investment Trusts offer good dividends. Mortgage REITs offer a dividend yield of 10-20% which is quite high as compared to normal stocks.
