Cobra Trading Review
Cobra Trading is a direct-access broker with an impressive range of trading platforms, high-speed trade executions and excellent support. What exactly makes it the best online broker for day trading? This is precisely what you are going to find out in this Cobra Trading Review.
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About Cobra Trading
Chadd Hessing founded Cobra Trading in 2003. Their clients are active day traders who enjoy competitive commission rates, multiple trading platforms, an industry-leading customer service, and one of the best short locate availability. Cobra Trading clears all orders through trustful partners like Wedbush Securities and Interactive Brokers. All Cobra trading client accounts are protected with coverage of up to $25,500,000 via SIPC and Lloyd's of London at no charge.
Why Should I Pay Commissions?
You may wonder why you should pay commissions when huge online brokers like Charles Schwab and E-Trade offer commission-free trading. The simple answer to the question is speed and flexibility.
There is no doubt that retail brokers like Charles Schwab and TD-Ameritrade are excellent choices for retail traders buying stocks and ETFs every once in a while, focusing on long term investments. They offer nearly every kind of investment types, a wide variety of tools, services, and financial products. Their trading platforms have all functionalities you can think of with excessive charting features, tons of indicators, and other fancy looking things.
The point is, as a day trader, you need speed and flexibility before anything else.
A direct-access broker focuses on speed by sending orders as fast as possible to the best possible stock exchange and ECN. As a direct access broker, Cobra Trading also offers the flexibility to route the order directly to your preferred exchange.
Why Speed Matters
Let's assume that you are new to day trading. You place 20 orders a day with 500 shares per order and a $20 price per share. The fast order execution gives you 2 cent better trade executions with each trade because of speedy execution. What is the benefit? 20 orders with 500 shares and $0.02 better executions on each trade = 20 orders * 500 shares * $0.02 = $200. Trading 200 days a year equals savings of 200 days * $200 savings a day = $40,000 of savings total.
Sure, you have to pay commissions on each trade. The trading commissions are only a fraction of a cent, and with the daytradingz.com discounted rate, you pay only $0.003 per share, which means 20 orders * 500 shares * $0.003 = $30 in commissions per day * 200 trading days = $6,000 in commissions. The hypothetical net-benefit in this szenario is $40,000-$6,000 = $34,000.
Many variables are having an impact on the overall benefit, but the example clearly shows the benefit of fast order executions. If you ever waited a couple of seconds or even minutes before a trade was executed, you know what I am talking about. Click the button, get a fill immediately and see the order status in real-time in your trading platform. This is what Cobra Trading is all about. Speed is one of the main requirements for day trading successfully.Click Here to Request Your Free Cobra Trading Platform Demo and 25% Discount
The Cobra Trading equity trading commissions usually start at $0.004 per share. Here is the good news: As a daytradingz.com reader, you get a 25% discount at Cobra Trading with $0.003 per share for all new accounts. Normally, you have to trade a minimum of 1M shares per month to get a similar rate, which is hard to achieve for beginners. The deal is available to all new accounts with an account minimum of $30,000.
|Trade Size per Month||daytradingz.com Readers||Regular Pricing||Savings|
|0 to 250k shares||$0.003||$0.004||25.0%|
|250k to 1M shares||$0.003||$0.0035||14.3%|
|1M to 2M shares||$0.003||$0.003||-|
Why $30,000, you may ask. According to the SEC rules, traders can execute a maximum of three-day trades in a rolling 5-day period if they have less than $25,000 in their account. Those who want to trade more frequently need a minimum of $25,000 in the account. Once your account value falls below $25,000, the SEC's PDT Rule comes into play, and your account gets locked for day trading activity. That's why the account minium at Cobra Trading is $30,000.
You can also trade options using Cobra Trading, paying $0.50 per contract and side. All stock- and options trades at Cobra Trading have a minimum of $1 per trade and are subject to regulatory fees, ECN charges and rebates. Stocks and options are cleared through Wedbush Securities, one of the largest securities firms in the United States.
Additional information: Future contracts can be traded via Cobra Trading's subsidiary called Venom Trading. The future contact trades will be cleared via Interactive Brokers.
The broker receives the commissions while the routing fees are being paid to the exchange. But on some occasions, you may even earn rebates from the exchange. How is that possible? The exchange makes a difference in adding liquidity and removing liquidity. Exchanges like ARCA and BATS pay you $0.002 per share for providing liquidity, and they charge you $0.0035 when removing liquidity. Other routings like CODAREB, IEX and ITGMRT neither charge nor credit something and let trade you without paying routing fees.
Cobra Trading offers five high-end day trading platforms starting at a $0 monthly fee if you trade more than 200,000 shares per month:
|Name||Price per month||Waived if you trade more than|
|Cobra TraderPro||$100/month||200,000 shares per month|
|Das Trader Pro||$125/month||250,000 shares per month|
|Sterling Trader Pro||$200-$230||300,000 shares per month|
Which platform to choose? Cobra TraderPro is the best starting point for beginners and has the lowest monthly fees. Cobra TraderPro is based on the popular Starling Trader framework and offers key features like hotkeys, real-time Level 2 market data, and stop orders. Another popular solution for day traders is DAS Trader Pro. They offer one of the most complete order routing options and a fair pricing structure. Sterling Trader Pro is another great trading platform with even more routing options.
Day traders value quality when it comes to trading software, especially when day trading is the primary source of income. To invest in the best tools gives traders an edge and unlocks higher profit potential.
Cobra Trading offers a free test drive. Click here to request a free demo and take advantage of the discounted commission rate.
Day traders need unfiltered tick data to be able to compete amongst the best in this business. The basic data package for non-professional traders costs $25 per month.
Are you tired of automated phone systems with long holding times? Did you ever try to close a trade via chat, getting the message that you can leave your email because the live-chat is not currently available? Once you have a problem, the real value of customer service becomes visible. Hopefully, you never have an issue with your internet provider or PC. Believe me, if you have a position of 10,000 shares, and your internet goes dark, you want to talk to a representative immediately to close your position.
Customer service is Cobra Trading, Inc's priority. You have their trade desk on the line when you need their help, and broker-assisted trades incur no additional cost.
Shorting stocks intraday opens a whole new world of profitable short term trading with a good risk-reward ratio. The most challenging part of shorting stocks is finding a counterpart that borrows the shares to short. Cobra Trading works diligently with its clearing firm Wedbush Securities to locate even hard-to-borrow stocks fast and easily. The short locate list with shortable stocks is another main benefit compared to retail brokerages.
Cobra Trading Review Summary
Cobra Trading is the best day trading broker for traders who value the added benefit of fast order executions. Their short locate functionality is excellent, all important order types are supported, and direct market access leads to fast trade executions. Daytradingz.com readers can request a free platform demo and start trading stocks with commissions as low as $0.003 per share.
The software fees are fair, and the costs can be waived when trading frequently. The direct access trading platforms are Cobra TraderPro, Sterling Trader Pro, and DAS Trader Pro. Their customer support is fantastic, and you can open and close trades via phone at no additional cost.
Various order routing options are available, and traders can receive rebates from exchanges by adding liquidity. The account types supported include individual and corporate accounts. Trades can be executed on margin where Cobra Trading has a margin rate of only 5.25% on margin balances of up to $1,000,000.00.
Accounts are protected via SIPC, and Cobra Trading is also a member of FINRA and NFA.
- Direct Access broker with fast trade executions
- Free platform demo and 25% discount available
- Support via chat, and phone (free broker-assisted trades)
- Good short locate, also on hard-to-borrow shares
- Competitive commission schedule.
- Account minimum $30,000.