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Apr 24 2021 01:17pm
I want to add a few comments here if you're still trying to decide.

An ideal broker would have (in order of importance):
1a) Cheap option trades (pretty much every notable broker has free stock transactions)
1b) Easy UI
2) Reliability
3) Clearinghouse
4) Non-payment for order flow type execution.
5) Large enough financial reserves to meet any kind of clearinghouse mandatory deposits on market wide volatility spikes

I personally use etrade as I've been able to negotiate with them to get my option trades to $.25/contract due to volume discounts.
This is after having called TDA, fidelity, schwab, vanguard, ibkr, tastyworks and tradestation negotiating a discount. The first question they ask will be how much money you expect to bring in and your average trading volume. For each of them, I mentioned $250k and trading volume of 500 contracts (one-way) and 5000+ stock trades a month. This was slightly inflated but fairly accurate. From what I remember, TDA offered me .40/c, fidelity offered .35/c, schwab offered .25/c (also they're my main bank account), ibkr and tradestation and tastyworks didn't offer any discount.

In my experience, most brokerages have 3 ways to trade: via website and manual input which is slow, via pro application (this is the most complex), and via an easier application (for etrade this would be power etrade). Most of the time, I use the 3rd option. After having tried most of these offerings, I can confidently say that Tastyworks offers the best UI. The ability to move multileg options to different strikes or expirations with one button along with their really intuitive interface is extremely nice. The most informative is TDA. You will probably be overwhelmed with the amount of functionality that is available but once you get a grasp, it is very useful.

There's nothing more infuriating than not be able to trade at market open because the platform is down or having some issues. I'm sure most people who have used Robinhood for years know this very well. Tastyworks also occasionally has issues. Etrade, or more specifically their power etrade platform, has had issues to the point that I almost considered moving elsewhere, especially during the vol spike last April, but has been smoothe for the past few months. I can't attest to other brokerages but anything is better than robinhood.

Which clearinghouse each brokerage sends to is important as well. Ideally, each broker should self clear by having a direct connection to the exchange (tda, schwab, etrade, fidelity). If they can't then they go to a third party. Apex is the one that most free brokers choose to go to (TT, ally, webull, robinhood used to before they self clear now) and I can confidently say that they are garbage. They are always extremely slow to send out 1099 forms and frequently mess up wash sales to the point that they send out revisions weeks later.

As for payment for order flow, this is becoming something more of a standard lately. It's pretty much the only way that these mid tier brokerages without a powerhouse banking unit behind them can offer free stock or very cheap option trades. Even TDA (which is backed by schwab) has been doing payment for order flow from last I read. In the end, is it a dealbreaker? Probably not. definitely not for those with accounts under 1M.

And the last point is something that's really underrated. And it really came to light in the past few months with the whole GME fiasco.
A lot of people were trying to buy gme on robinhood but couldn't because the deposit requirements set by the clearinghouse rose dramatically overnight. Another broker that had significant issues was IBKR. Their CEO Petterfy is undoubtedly a scumbag as well. From what I remember TDA also prevented people from buying. I had zero issues buying gme stock/options on etrade even at peak volatility. Fidelity is another one that people had no issues with; they even owned a good % of GME at the time. They have 4.9 TRILLION AUM and are a huge part of the market. Their stability is a big selling point, same with Schwab and vanguard. So keep this in the back of your mind if you value stability.

If all you really care about is getting the cheapest option contract fee, then give these brokers a call, and negotiate with them.
If you care about ease of use, etrade is a good balance between fees and UI functionality.
If you care about reliability, go with the biggest brokers: fidelity, vanguard, schwab.
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