How Active Traders Choose an Online Discount Broker

How can Online Discount Brokers like TD Ameritrade, Scottrade, E*Trade and Interactive Brokers offer such inexpensive commission rates and still stay financially viable? Well, unlike their full-service counterparts, most discount stock brokers and futures brokers have done away with sizable research departments and don't offer any stock investment or other financial advice. They have essentially unbundled the traditional brokerage services which would have increased their operating costs significantly.

There are two categories of online discount brokers, namely the "standard discounters", who charge commissions which are at least 50% less as compared to the full-service brokers, and the "deep discounters", whose commissions are almost 60-90% below those of the full-service brokers.

Here are some factors that active traders and investors consider when choosing an online discount brokerage firm: