MY INDEPENDENT GUIDE TO THE TOP 5 DISCOUNT BROKERS

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MY INDEPENDENT GUIDE TO THE TOP 5 DISCOUNT BROKERS

By Adam O'Dell, Chief Investment Strategist, Dent Research

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Before we get started, please note that only you can determine the "best" broker for you. This guide is designed to organize and present the features of popular brokerage firms. It certainly does not cover all aspects you should consider. And it's not meant to offer any judgments or recommendations of one firm over another. Ultimately, the "best" brokerage firm for you is the one you feel meets your needs, at an appropriate price, and with an appropriate level of customer service. Thankfully, the growing popularity of self-directed investing has supported tremendous growth, innovation, and pricing-pressure among U.S. brokerage firms ? leading to an environment in which you have many good options from which to choose. Note that the commission pricing I share with you in this report is as of May 15, 2018. Brokerage firms may update pricing regularly. Double-check each firm's pricing structure before deciding. Here's a list of five brokers you should consider...

FIDELITY

Website: Phone Number: 800-343-3548 Fidelity has been in the game for several decades, amassing some 19 million retail brokerage accounts with over $2 trillion in client assets. As a "full-service" broker, Fidelity offers quality customer service to novices and professionals alike. Commission rates are based on a flat-fee structure, with stock trades costing $4.95 and options trades costing $4.95 plus $0.65 per contract. As a full-service broker, Fidelity's research and stock-screening tools are well-developed and readily available to accountholders. The trading platforms and options chains give you access to a wealth of information on a wide variety of investments. As a one-stop-shop for all your "trading," "investing," and "retirement" needs, Fidelity is a stalwart in the industry and may be a great choice for you.

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TD AMERITRADE

Website: Phone Number: 800-454-9272 TD Ameritrade is no small operation, with its 11 million customer accounts and 650,000 trade executions per day. The trades-per-day figure, perhaps, underscores the firm's commitment to active traders. While TD Ameritrade offers commission-free trades on a select list of ETFs, if you hold them for longer than 30 days, the company's standard-available trading platform is powerful enough for even the fastest day traders. In 2009, TD Ameritrade acquired thinkorswim, a much smaller online brokerage, known for its killer trading and options platform. Now, the thinkorswim platform is available to all TD Ameritrade accountholders, regardless of account size or activity levels. The platform generally offers more functionality and capabilities than most other firms' platforms. It's a desktop-based software, but a simpler web-based version is also available. Commission rates are $6.95 per trade, for stocks, and $6.95 plus $0.75 per contract, for options. While not the cheapest commission rates you can find, the value of the trading platform may well make up for it if you're looking for advanced features.

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E*TRADE

Website: Phone Number: 888-639-4353 E*Trade has attracted more than 3.6 million customers (with its witty ads), since 1982. As a full-service broker, it provides many of the expected features of a one-stop-shop, including research reports, screening tools and quality customer service. Commission structure is flat-fee, with stock trades costing $6.95 and options trades costing $6.95 plus $0.75 per contract. That said, active traders are rewarded with lower fees. Preferential prices kick in for traders making 30 or more trades per quarter, with reduced rates of $4.95 per stock trade, and $3.95 plus $0.50 per contract, for options. Another indication of E*Trade's commitment to active traders is evident in its platforms. Both the E*Trade Pro and OptionsHouse platforms come with all the necessary information, all the bells and whistles, even the most discerning investors have come to expect. E*Trade acquired OptionsHouse in 2016, largely for its institutional-grade options platform. This platform is now available to E*Trade's retail clients, making it a top-choice for investors focused on options.

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CHARLES SCHWAB

Website: Phone Number: 800-435-4000 As an industry leader, investors have come to know Charles Schwab as a full-service solution for trading and investing, along with banking and retirement planning. The firm boasts of nearly $3.2 trillion in client assets, inclusive of its more than 10 million active brokerage accounts. Commission rates are low, with stock trades costing a flat $4.95 per trade, while options trades are charged $4.95 plus $0.65 per contract. Accountholders are offered access to any of the firm's three trading platforms, without account minimums or activity requirements. The availability of three platforms is nice as it allows each client to choose the level of technical sophistication required (but not more). Naturally, Schwab's full-service offering includes access to high-quality research reports and commentary. And the firm's customer service is generally regarded as top-notch.

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