ETF Brokers
An exchange-traded fund, or ETF, is an investment product that's available to trade through the stock exchange. An ETF works similarly to a mutual fund in that the value of the ETF is closely related to the value of its underlying asset, which can be comprised of stocks, bonds, or commodities; however, it also trades like a stock. They are a favorite for many investors because they are relatively inexpensive to trade and are tax efficient. Since ETFs are somewhat unique in the way that they are valued and traded, traders need tools geared specifically toward the trading of these investments in order to be successful. Following are a few of the best brokers that offer these services.
1
Betterment
- Great investment option for any kind of investor. Most suitable for small investors who prefer a passive portfolio.
- In between solution for those who want to build their own portfolio, yet want it to be as simplified as possible.
- Investments are in index funds and ETFs, and is therefore much lower cost than other forms of market investments.
- Develop your own diversified ETF portfolio using simple tools.
- No transaction fees, but rather portfolio management fees that range from 0.3% to 0.9% of your portfolio amount, charged in a tiered fashion.
- Get $25 for opening an account.
2
Scottrade
- One of the only discount investment brokers that has physical locations designed to assist you with your ETF investments.
- Offers real time ETF comparison tools that allow you to easily compare funds side by side.
- Get access to free ETF screeners that allows you to sort through the thousands of available funds and locate only the ones you are interested in trading, based on criteria that you enter. Or, you can also use a template screener.
- Offers multiple ways to trade, including online, touchtone, and broker assisted options for competitively low rates.
- One of the only ETF brokers that offers services in Chinese.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.00 | $7.00 | $1.25 | $500.00 | $27.00 | $0.00 - $17.00 |
3
TradeKing
- Has a simplified trading screen that allows for easy ETF trading with the click of the mouse.
- Low flat rate ETF trading, regardless of the balance in your account or the number of trades you perform each month including online, touch tone and broker assisted trades.
- Access to hundreds of tools and calculators designed to help you make informed trading decisions including interactive charts, tax manager tools, and screeners.
- Extra Hours Trading allows you to enter pre-market orders as early as 8:00 am ET and as late as 9:30 am ET, and post-market orders from 4:00 pm ET until 5:0pm ET, making trading convenient.
- The free Autotrade function allows ETFs to be bought and sold based on the recommendations of professionals, freeing you from watching the market all day long.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $4.95 | $4.95 | $0.65 | $0.00 | $4.95 | $14.95 (no load) |
4
tradeMONSTER
- tradeMONSTER Mobile allows ETF traders to manage their portfolios and execute orders from wherever they are with their Blackberry of iPhone.
- tradeCYCLE offers a unique ETF trading method designed to guide novice ETF investors through the process, from research to execution to developing exit strategies.
- Low, flat rate competitive pricing for all ETF trades makes trading ETFs with tradeMONSTER painless and profitable.
- Get access to thousands of free articles, webinars, and live events aimed at advancing your ETF trading strategy and allowing you to become more profitable.
- Twitter integration allows tradeMONSTER traders to interact with each other and post real time trades and results.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.50 | $0.00 | $0.50 | $2,000.00 | $7.50 | $0.00 - $15.00 |
5
OptionsXpress
- This broker offers a warehouse of tools designed to elevate your ETF trading strategies to the next level.
- Get access to Large Value ETFs rated by professionals as good investment opportunities.
- ETFs are categorized by sector, allowing you to find the research, charts and quotes you need.
- Get access to hundreds of free webinars and live events which deliver invaluable information in a true interactive format.
- There's an intuitive free ETF screener that allows you to breeze through thousands of available ETFs in minutes based on the criteria you choose.
- Displays up to the minute market news that keeps you informed and up to date on market trends and how your investments are doing on both your computer and your phone.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $9.95 | $0.00 | $1.50 | $0.00 | $9.95 | $9.95 + LOAD FEE |
6
E*Trade
- Get access to thousands of ETFs available for trading as well as E*Trade’s signature All Star List that makes finding the right fund easy.
- E*Trade offers a multitude of free tools including an ETF screener that allows you to customize your search based on the criteria you choose.
- The online professional portfolio manager allows you to review your ETFs and offers expert recommendations for future investments 24 hours a day, seven days a week from the comfort of your own home.
- Access to live investment professionals who can take your ETF investing strategy to a whole new level.
- Learn from ETF trading professionals through a combination of webinars, interactive tools, and text articles all designed to advance your knowledge and increase your chances of success.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $7.99 - $9.99 | $7.99 - $9.99 | $0.75 | $500.00 | $45.00 | $0.00 - $19.99 |
7
OptionsHouse
- OptionsHouse offers a flat commission of $3.95 for ETF investing and trading.
- Enjoy one of the lowest flat-rate commissions you'll find in the brokerage industry.
- This broker currently has a lot of ongoing attractive promotions and special offers that may interest the new investor.
- A low account deposit is required to open a new account.
- They have a great selection of exchange traded funds as well as stocks that you will have access to. Trade equities and options at cheap rates.
| Stock Trades | Options Base | Options Contract | Minimum Deposit | Broker Assisted | Fund Trades |
| $3.95 | $8.50 | $0.15 | $0.00 | $3.95 | $9.95 |
How To Find The Best ETF Broker For Your Needs
ETF investing is becoming more and more popular, thanks to the ease of trading and sheer number of full service and discount brokers that have been adding ETFs to their product offering line up. Many brokers offer ETFs as part of their product roster. With ETFs being traded on an exchange, they can be manipulated like a stock and have become a desirable investment vehicle for many investors and traders. But how do you know that you are working with the best broker for ETF investing?
Here are a few tips to help you decide which ETF broker could address your requirements:
- Conduct interviews. This is relatively easy to do with a full service broker since personalized service is the name of the game for these brokers. Schedule some time to sit down face to face with potential brokers and find out just how well they can support your activities. Take a look at the broker's track record and reputation. Discount brokerages offer ETF trading, but check out which ETFs are indeed available for trade. These brokers let you take a more do-it-yourself approach, so also review the tools that are available for your use.
- Look for Accolades. Publications such as SmartMoney, Kiplinger’s, and Barron’s rate brokers on a regular basis in several areas including excellence in trading specific investment products. It is an honor to receive high marks from these publications and most brokerages will proudly display those honors on their websites and in their ads. Look for brokers that have received high marks in the ETF arena to ensure that you are trading with some of the best in the business.
- Look for Educational Opportunities. The old adage that no one is more invested in your success than yourself holds true when it comes to investing. No matter how competent your broker is, you'll need to understand what you can about trading ETFs in order to ensure that the orders you are making are going to make you a profit and not just rack up the commissions for your broker. While many investors understand that this is especially important when using a discount broker because one on one support is limited, it is actually also important when using full service brokers. Find out whether or not your broker offers any seminars, webinars, or other educational portals to advance your knowledge in ETF trading.
- Cost. Most people think that cost should be the number one factor when looking for a broker, but this is simply not true. In most cases, you get what you pay for, so the less expensive the trade commission is, the more you are on your own when it comes to investing. Now, with that being said, there is absolutely no need to pay any more than you absolutely have to in trade commissions in order to get the level of support you are comfortable with. Make a short list of brokers that meet all of your other criteria and then compare costs and go with the broker that meets all of your needs for the lowest possible price.
{ 1 comment… read it below or add one }
I actually have accounts in a few of these online brokerages, and I picked them out because I can buy ETFs for cheap.
I’m not a trader but a long term investor, and brokerages these days have branched out to address the requirements of longer term investors. They’ve made it easier to trade with their cheaper transaction fees, which can be both a good and a bad thing. Cheaper fees may tempt you to trade more often, but I’d personally resist that temptation and stick to index ETFs.
Just my .02.