Choosing a Broker
What broker should I use to trade Stock (Options) & Futures?
I believe this is a common question that a LOT of traders are asking; when we are new to all of this it is hard to realize that different brokers serve different needs & that unless we know what needs these brokers serve - we won’t know what brokers to use.
Also - where you live matters a LOT. In the USA you can use any of the brokers discussed (if it suits your needs) but if you are outside of the USA then you may only have once choice (not much of a choice at all - if the choice is between one thing or nothing).
So - I say we dig into the various types of brokers out there and what needs they serve so that you’ll have a better idea about the choices.
STOCK / OPTIONS
There are “free” brokers that are very popular in this space - with desktop & phone apps that provide decent trading and analysis tools. The most popular are RobinHood & WeBull. While they are similar I believe I like RobinHood more.
One thing about using either of those - is that I feel they lack the deeper option analysis toolset that comes with a broker like TOS (owned by Schwab). TOS - thinkorswim - is a very robust analysis platform that offers everything we’d want to analyze stocks, options, earnings, news, fed activity, stock trading television & chat rooms, and even advanced order flow tools with built in BookMap software.
While I wouldn’t choose TOS for actually placing trades I LOVE it for my analysis.
Personally - I use TastyLive for my options trading because of their commissions and because of their ease of use.
Futures
When it comes to futures - margin is an issue. Any broker that offers futures can be used to trade futures but - some have big margin requirements (you need a large account to trade there) and some brokers do not have this requirement (great for smaller accounts to get started).
The most popular “small account friendly” futures brokers are Ninja Trader (NT) and Tradovate (which is also owned by Ninja Trader). These smaller account brokers can handle large accounts - we just call them “small account brokers” because small accounts can trade there.
There is also brokers like Optimus (Iron Beam) and Infinity - a few others. The most common / popular is NT and Tradovate. These smaller account brokers will require that you buy the data monthly - but that is low cost.
I believe that Webull and RobinHood are moving into the futures space - but I do not know much about what they offer and what the margins are; you can check into that if it interests you.
Brokers
There are “all around” brokers that give you an opportunity to trade everything on one platform … like IBKR and TOS but those brokers require a large account. They also suffer from the “everything” issue - if a broker has everything in it - it can be a resource hog on the PC - it can be a big thing to learn - and it can have update bugs / crashes.
Personally - I’ve opened accounts into every broker I heard about over the years (yes, I have +60 accounts & +30 brokers that I actively use / fund) and I’ve closed many more than that over the years. I like to test a broker out - see what they offer - see how they compare to others and find out for myself. But - that is a journey (not a destination) and I like to window shop.
I really hope this article has provided some insight - and I’ll leave you with this: Go To YOUTUBE and search for user reviews on these various brokers. Check the YOUTUBE pages of these brokers as well - because (for example) Schwab has a robust YOUTUBE channel that talks about the platform and learning to use that platform and I am sure the other brokers have similar channels.
