Retail brokers offer zero commissions these days. So why should you consider using the best direct access brokers and trading platforms instead and what really makes the best broker for day trading?
Order execution speed!
Retail stock trading platforms like TD Ameritrade and Robinhood receive your orders and send them to 3rd party venues instead of sending them to the stock exchange,whereas direct access brokers offer direct market access, ensuring faster order execution.. This can have an impact on the order execution speed, especially if you place market orders.
Since order execution speed matters the most day trading thousands of shares per order, day trading brokers specialized in providing clients with high-speed direct access platforms and servers as close as possible to the New York Stock Exchange, Nasdaq, and the Electronic Exchange Network.
This article is all about the best direct access brokers offering their clients competitive fee structures, high-end trading technology, extensive short locate lists and outstanding support.
Transparency: We may get compensated when you click on links in this article.
Direct Access Brokers and Platforms
- Cobra Trading: Best Direct Access Broker Overall
- Interactive Brokers: Best Nasdaq-Listed Direct Access Broker
- LightSpeed Trading: Best For Traders Trading Over 15MN Shares per Month
- Centerpoint Securities: Broker with Good Short Selling Inventory
- SpeedTrader: From the Inventors of DAS Trader Pro
1. Cobra Trading
Cobra Trading is the best direct access broker and has served equity and option traders since 2004. Chadd Hessing is the president and CEO. He aims to provide his clients sophisticated trading platforms, unparalleled support and an excellent pricing commission structure for active traders. Unlike many online brokers, Cobra Trading provides direct market access, ensuring faster trade executions and more control over orders.
Cobra Trading has its headquarters in Texas, and clients can reach them via phone, email and live chat. Orders can be routed directly to the market, ensuring lightning-speed trade executions by going from your trading platform to the exchange.
Three outstanding trading platforms can be used. DAS Trader Pro, Sterling Trader Pro, and Cobra TraderPro. They all come with Level 2, real-time prices, and hotkey trading. You also have access to an extensive easy-to-borrow list and to a hard-to-borrow share locate a tool.
Cobra Trading offers unparalleled support. Clients can reach out to customer support during market hours and they pick up the phone fast. All broker-assisted trades are free of charge with Cobra Trading, which is unique in the industry.
Traders can open an IRA or cash account with the buying power relative to the cash amount. The retail margin account unlocks a 4 times higher intraday buying power. If you have an account with $50,000 in cash, your intraday buying power is $200,000. Cobra Trading is a member of FINRA, NFA and SIPC.
With the link below, you get a lifetime discount of 33% on equity commission and get free access to a trading platform of your choice for one month. You pay only $0.002 commissions per share, trading less than 1mn shares per month and $0.0015 per share trading more than 1mn shares per month.
Cobra Trading 33% Discount on Commissions Cobra Trading Review
2. Interactive Brokers
Interactive Brokers is an excellent choice for day traders and automated trading enthusiasts. IB is also popular amongst institutions because of the multitude of ways to connect external tools via API. Various external trading platforms can be connected to Interactive Brokers via API to their Trader Workstation platform.
The Trader Workstation includes charting, research tools, different trade layouts and a high level of customization. Users can choose between various order routes and use over 100 order attributes and algos.
Interactive Brokers offer two pricing tiers for clients: IBKR Lite and IBKR Pro. IBKR Lite caters to retail investors looking for commission-free trades on US stocks and ETFs. In contrast, IBKR Pro caters to active traders looking to achieve the best price execution with each trade at a low cost with direct-access broker capabilities. In addition, IBKR Pro clients can choose between a fixed and tiered commissions structure, where the commission on US stocks is between USD $0.0005 and $0.0035 per share for tiered and $0.005 per share for fixed.
The Interactive Brokers Group Inc. is listed on Nasdaq under the ticker symbol IBKR. They currently have a market cap of $26.8 billion.
Overall, Interactive Brokers is an excellent low-commission broker for traders looking for an all-in-one platform focused on active and automated trading, especially if other assets like futures, options and currencies are of interest.
Visit interactivebrokers.com Interactive Brokers Review
3. Lightspeed Trading
Lightspeed Trading provides direct market access, customizable and stable ultra-low latency technology for day traders. The direct access trading platform is designed to be fast and accurate in any market environment, even if the trading volume and market volatility reach high levels. The platforms support multiple order routing options, complex order types and customizable order entry executable via mouse or hotkeys.
Experienced licensed professionals support clients during regular market hours and also during pre-and post-market. You can reach Lightspeed customer support by phone or email, but a live chat is not available. The company behind the platform is Lighspeed Financial Services Group LLC and added a 2-step verification to the account access settings. Account funds are protected via SIPC.
LS Trader, Sterling Trader Pro, Livevol X, and the Eze EMS (formerly RelaTick Pro) platforms are available for clients. There is also a web-based platform, and mobile apps are available for trading but with fewer functionalities.
The stock and ETF trades pricing begins with $0.0045 per share if less than 249,999 shares are traded per month. A trading volume of over 3mn shares per month unlocks a per-share rate of $0.0020.
4. CenterPoint Securities
Centerpoint Securities belongs to the best direct access brokers and has its headquarters in San Diego. They offer market access software, multiple clearing options, extensive routing capabilities, portfolio margin accounts and multi-broker execution capabilities.
CenterPoint Securities is a direct market access broker serving professional traders and day trading beginners with features like level II market data and order entry, charting, customizable design, stock scanners, and real-time times and sales. In addition, newsfeeds, advanced order types, custom layouts and hotkey trading are also supported.
CenterPoint provides access to their in-house trading platforms CenterPoint Pro, CenterPoint Web and CenterPoint Mobile. The platform technology is based on DAS Trader Pro and works on windows-based systems and with tools like Bootcamp or Parallels on Mac computers.
The commissions and fees have similarities to Cobra Trading and Lightspeed. Traders pay $0.004 per share, trading less than 300,000 shares per month, while a $0.002 per share pricing is available with trading volumes of 1.5mn shares per month.
You can reach out to CenterPoint’s customer support and trading desk via phone from 7:00 am EST to 4:30 pm EST via email and contact form.
5. SpeedTrader
SpeedTrader is another excellent choice for active day traders, servicing active traders since 1999. The direct access broker is a division of Mint Global Markets and a member of FINRA and SIPC and located in New York.
As a client, you gain access to SpeedTrader PRO, the in-house direct access trading platform. Features like Level 2, real-time stock charting, point and click trading, hotkey support, and advanced order types are built into the software.
SpeedTrader PRO is designed for optimal speed, efficiency and reliability. It allows investors to trade stocks, ETFs and options from one platform on a commission per trade or share basis.
You pay a commission of $0.0044 per share trading under 250,000 shares per month, or $4.49 per trade when executing under 200 trades per month. The more you trade, the lower the commission. The best commission is reached by trading over 3mn shares per month or executing over 3,000 trades per month.
What Is The Best Direct Access Broker? My Conclusion
Direct access brokers are the best choice for active traders. Lightning speed order routing, order executions and real-time market data are important, and the brokers listed serve their customers with excellent technical solutions. Direct access trades get executed fast since direct access brokers can be used to route an order directly to the stock exchanges or ECNs.
Cobra Trading stands out from the competition. They have the lowest fees for beginner traders, experienced traders and high volume traders. Cobra Trading offers a wide range of direct access platforms to active stock traders. But they also offer futures trading and options trading at competitive rates. The bundle deal with a 33% commission discount and the free trading platform along with a free demo is a great deal and worth considering.
Traditional brokers like TD Ameritrade and E-Trade are an excellent choice for investors and buy-and-hold portfolios. But day traders consider opening an account with one of the best direct access brokers to speed up order handling, routing, trade executions, and making more money day trading.
FAQ
What is direct access trading?
Direct access trading means that traders direct access brokers to send their orders directly to the stock exchange instead of sending them to market makers or third parties. The comparison table in the article provides insights about what the best direct access brokers are and how money can be saved by focusing on speed and excellent customer support.
Do day traders need direct access brokers?
Yes and No. Traders can day trade U.S. listed stocks by using a U.S. broker with a maintained minimum of $25,000 in the account. It is not required to do this with a direct access broker since day traders can also use an online broker like Charles Schwab. However, custom order routing improves speed, and a fast trade execution can benefit the overall profit.
What is the financial industry regulatory authority?
The financial industry regulatory authority is a self-regulatory organization. FINRA works under the supervision of the SEC (Securities and Exchange Commission) and has been active since 2007 when the SEC approved FINRA through a merger of the NYSE regulatory branch and NASD.
Are volume discounts from the best brokers helpful for the active trader?
Yes. High volume traders who trade more than 2 million shares per month save money on a per share basis. Some direct access brokers offer volume discounts with commission rates as low as $0.0020 per share if more than 2 million shares are traded per month. This is half of the commissions compared to what less active traders pay per share.
Are Direct Access Brokers the Best Ones for Short Selling Stocks?
Yes. Direct access brokers are the best brokers for short selling stocks because of their advanced trading platforms and extended trading hours. Direct market access brokers typically have the better short-sale inventory and support a wide range of hard to borrow stocks for shorting. A disadvantage is that those brokers require commissions to be paid, while some retail brokers offer commission free short selling.
Guide
Definition and Explanation
Direct access brokers are brokers that give traders direct access to the markets, bypassing intermediaries. This means traders can trade fast and efficient with more control over their orders. Direct access brokers offer advanced trading platforms and features for active traders including real-time market data, level II quotes and direct market access.
Benefits of Direct Access Brokers
Direct access brokers offer:
- Real-Time Execution: Fast and reliable trade execution so you can react to the market quickly.
- Advanced Trading Platforms: Advanced trading platforms with real-time market data, level II quotes and direct market access.
- More Control: More control over your orders so you can trade directly on the market.
- Better Liquidity: Access to multiple liquidity providers so you can find the best prices.
- Less Slippage: Less slippage by fast and reliable trade execution.
Real-Time Execution and Advanced Trading Platforms
Direct access brokers offer advanced trading platforms with real-time market data and level II quotes. These platforms give traders the tools they need to make informed decisions and trade fast and efficient. Some of the features of direct access trading platforms are:
- Real-Time Market Data: Direct access brokers provide real-time market data so you can stay up-to-date with the market.
- Level II Quotes: Direct access brokers offer level II quotes which give you detailed information about market makers and liquidity providers.
- Direct Market Access: Direct access brokers give you direct market access so you can trade directly on the market.
Choosing the Right Direct Access Broker
Choosing the right direct access broker can be overwhelming but there are several things to consider. Here are some of the key things to consider when choosing a direct access broker:
- Platform Reliability and Uptime: The platform reliability and uptime is crucial for traders who need fast and reliable trade execution.
- Order Execution Speed: Order execution speed is critical for traders who need to react to the market quickly.
- Fee and Commission Structure: The fee and commission structure can have a big impact on trading costs.
- Range of Financial Instruments: The range of financial instruments can affect the types of trades you can do.
- Customizability of Trading Tools: Customizability of trading tools can affect how you can tailor the platform to your trading needs.
- Customer Support: Customer support can affect how quickly you can resolve issues.
Considerations
When choosing a direct access broker there are several things to consider. Here are some of the things to consider:
- Minimum Deposit: The minimum deposit can affect if you can open an account.
- Platform: The platform features can affect how you can trade fast and efficient.
- Markets and Asset Classes: The range of markets and asset classes can affect the types of trades you can do.
- Execution Speed and Uptime: The execution speed and uptime of the broker can affect if you can react to the market quickly.
- Customer Support and Education: Customer support and education can affect how quickly you can resolve issues.
- Fees and Commissions: The fees and commissions of DMA trading can affect your trading costs.
