Best Direct Access Broker and Trading Platform 2021
Retail brokers offer zero commissions these days. So why should you consider using the best direct access brokers and trading platforms instead and what makes an day trading broker?
Order execution speed!
Online stock brokers like TD Ameritrade and Robinhood receive your orders and send them to 3rd party venues instead of sending them to the stock exchange. 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 and best brokers for short selling offering their clients competitive fee structures, high-end trading technology, extensive short locate lists and outstanding support.
Direct Access Brokers and Platforms
- Cobra Trading: Best Direct Access Broker Overall
- LightSpeed Trading: Best For Traders Trading Over 15MN shares per month
- Centerpoint Securities: Excellent Inhouse Platform based on DAS Trader Pro
- Interactive Brokers: Best Nasdaq listed direct access broker
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.
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.
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.
Using the link below, you save 25% on equity commission and receive free access to a trading platform of your choice. In addition, you pay only $0.003 per share, trading less than 2mn shares per month and $0.002 per share trading more than 2mn shares per month.
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.
3. 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 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.
4. Interactive Brokers
Interactive Brokers is an excellent choice for traders who want to automate their trading activities. Various external trading platforms can be connected to Interactive Brokers via API to their Trader Workstation platform. IB is popular amongst institutions since so many ways of connecting external tools via API are available. The Trader Workstation belongs to the advanced trading tools and includes charting and research tools, different trade layouts and a high level of customization.
The Interactive Brokers Group Inc. is listed on Nasdaq under the ticker symbol IBKR. They currently have a market cap of $26.79B, earnings per share of 3.55 and a P/E ratio of 17.74. Interactive Brokers has some similarities with other online brokers but does not sell order flow to 3rd parties.
The Interactive Brokers tiered commission structure for Nort America is competitive and starts at $0.0035 per share when trading less than 300,000 shares per month. Over 300,000 shares per month, the price per share falls to $0.0020 per share. This is in the range of what other direct access brokers offer and makes Interactive Brokers an excellent low-commission broker for traders looking for an all-in-one platform focused on automated trading.
However, IB lacks in terms of customer support. They are a public traded company, and their shareholders want to see profits. You can call them if you have a problem, but your waiting times might be longer than expected. That’s a significant difference from Cobra Trading, where your call will answer immediately.
One more thing where Interactive Brokers falls behind its direct access broker competitors is the quality of data. Interactive Brokers filters the tick data, and not every tick is shown in the Trader Workstation. This can be a minor disadvantage if trading algos are directly based on the TWS data feed. Using an external tool with a separate data feed can solve the problem when connecting the tool via API to the IB TWS for trade executions.
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.
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 25% 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.
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.