Day trading is the term for frequently buying and selling stock positions after holding them for short periods of time, and technically speaking, you can day trade on pretty much any broker's platform. But what is the best day trading platform for you? Here, we'll explore how to choose the best day trading platform, and what you should know before deciding to give day trading a try.
Day trading: A note of caution
Day trading carries risk of permanent financial loss. We strongly recommend first reviewing The Motley Fool's investing philosophy before considering day trading. The Motley Fool (The Ascent's parent brand) was founded with a long-term mindset of buy-and-hold investing; that means we believe long-term investing is critical to growing your wealth.
We created this page knowing that everyone's investing journey will look a little different, but wanted to note the risks of day trading for anyone who might be unaware. If you choose to engage in day trading, please do so with caution and an understanding of the financial dangers involved.
3 Featured Picks From Our Best Day Trading Platforms
There are a lot of options to compare, even on this page. It can be overwhelming! If you're looking for a place to start, here are some day trading platforms our experts recommend and why they like them:
- Robinhood: Great low-cost day trading platform
- E*TRADE: Standout option for stocks and options traders
- Tastytrade: Fantastic broker for futures investors
Our 5 Best Day Trading Platforms
| Broker/Advisor | Best For | Commissions | Next Steps | |
|---|---|---|---|---|
Robinhood Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Best For: Low fees | Commission: $0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold | Open Account for Robinhood |
E*TRADE Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Best For: Stocks and options traders | Commission: Commission-free; other fees apply | Open Account for E*TRADE |
Tastytrade Rating image, 4.0 out of 5 stars. 4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.0 out of 5 stars. 4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Best For: Options and futures investors | Commission: $0 for stocks, $1 per option contract (opening trades only), 1% per crypto purchase and sale | Open Account for Tastytrade |
Webull Rating image, 4.0 out of 5 stars. 4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.0 out of 5 stars. 4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Best For: Mobile investing | Commission: $0 per trade | Open Account for Webull |
Interactive Brokers Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Best For: Active brokers | Commission: As low as $0 stock trades | Open Account for Interactive Brokers |
How to choose the best platform for day trading
In a nutshell, the best way to choose the best day trading platform is to decide what features and tools are most important to you. You can day trade with any online broker, but not all will be the best broker for you.
For example, if you plan to trade options, you should look for a platform with low commissions for options trading (you can learn more by checking out our best options trading platforms). If you expect to use margin regularly, you should pay attention to the margin rates you'll pay on a particular stock trading platform. It's also important to make sure the broker has a good stock trading app if you plan to trade on the go.
And in all cases, you should make sure the day trading platform offers the features and capabilities you want. Fortunately, most of the best day trading platforms have a "play money" mode that allows investors to test drive the trading software without putting real money at risk.
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Open Account for Robinhood
OnRobinhood'sSecure Website.
Our five best day trading platforms for April 2024
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- Low fees:Robinhood
- Stocks and options traders:E*TRADE
- Options and futures investors:Tastytrade
- Mobile investing:Webull
- Active brokers:Interactive Brokers
Ratings Methodology
2024 Award Winner
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
As one of the few places to trade options commission free, Robinhood deserves a spot on the list. It also offers fractional share investing, cryptocurrencies, and an easy-to-use trading app. Customers who subscribe to Robinhood Gold also get access to extremely low-rate margin trading.
Read Full Review
Fees:
$0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold
Account Minimum:
$0
Open Account for Robinhood
OnRobinhood'sSecure Website.
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
The Power E*TRADE platform is one of the highest rated, and both the standard E*TRADE and Power E*TRADE platforms are available in mobile app form as well. High-volume traders get a discount on options commissions.
Read Full Review
Fees:
Commission-free; other fees apply
Account Minimum:
$0
Special OfferOpen a new eligible E*TRADE brokerage account, fund your account within 60 days of opening, and earn a cash bonus of up to $1,000, depending on the size of your deposit. Offer good for one use per customer, on a single account.
Open and fund and get up to $1,000
Open Account for E*TRADE
OnE*TRADE'sSecure Website.
2024 Award Winner
Our Rating:
Rating image, 4.0 out of 5 stars.
4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
Tastyworks allows for stock trading, but it is the most options-focused trading platform, with technology that focuses on it. Plus, Tastyworks has a unique commission structure that makes trading options more cost-effective than most rivals, especially for high-volume traders.
Read Full Review
Fees:
$0 for stocks, $1 per option contract (opening trades only), 1% per crypto purchase and sale
Account Minimum:
$0
Open Account for Tastytrade
OnTastytrade'sSecure Website.
Our Rating:
Rating image, 4.0 out of 5 stars.
4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
No commissions on options, and a more feature-packed trading platform than Robinhood has. Webull also offers very competitive margin rates and doesn't require a subscription to access this feature.
Read Full Review
Fees:
$0 per trade
Account Minimum:
$0
Open Account for Webull
OnWebull'sSecure Website.
2024 Award Winner
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
The Trader WorkStation platform is a powerful one for frequent traders. Day traders generally use lots of leverage (margin), and Interactive Brokers has some of the lowest margin rates in the business. It also offers international trading capabilities, which is somewhat rare.
Read Full Review
Fees:
As low as $0 stock trades
Account Minimum:
$0
Open Account for Interactive Brokers
OnInteractive Brokers'Secure Website.
Editor's Note: TD Ameritrade is transitioning to Charles Schwab
TD Ameritrade has been acquired by Charles Schwab, and the company expects all accounts to be transitioned by the end of 2024. We've removed TD Ameritrade from our best-of lists to align with this development. Here at The Ascent, you can trust that we're constantly evaluating our top broker picks to bring you current recommendations.
What is day trading?
The term day trading is often used to refer to any investor who frequently buys and sells stocks, but the true definition is someone who regularly buys and sells the same stocks during the same trading day.
Regulatory agency FINRA formally defines a day trader as someone who buys and sells the same stock during the same trading day at least four times within a five-business-day period. This is known as a pattern day trader.
How does day trading work?
Day traders try to identify patterns or trends to profit from short-term movements in a stock. For example, a day trader might identify a pattern in Apple's stock chart and predict the share price will rise. They'll buy shares of Apple and aim to sell it a short time later at a higher price. Active day traders attempt to earn profits on trades like this several times in a day.
LEARN MORE: How does day trading differ from investing?
Buying your first stocks: Do it the smart way
Once you’ve chosen one of our top-rated brokers, you need to make sure you’re buying the right stocks. We think there’s no better place to start than with Stock Advisor, the flagship stock-picking service of our company, The Motley Fool. You’ll get two new stock picks every month, plus 10 starter stocks and best buys now. The average stock pick inside Stock Advisor is up 661% — more than 4x that of the S&P 500! (as of 4/15/2024). Learn more and get started today with a special new member discount.
What are the risks of day trading?
Day trading can be extremely risky. As regulatory agency FINRA says, "Day trading generally is not appropriate for someone of limited resources, limited investment or trading experience and low risk tolerance. A day trader should be prepared to lose all of the funds used for day trading."
Simply put, stocks can be extremely volatile over short periods of time, and it can be painfully difficult, if not impossible, to predict their movements. There's no such thing as a 100% reliable day trading strategy, or anything close to it.
Plus, the odds simply aren't in your favor when day trading, thanks to the bid-ask spreads of stocks. In simple terms, the price you can readily sell a stock for is typically lower than the price you can buy it for at any given time. Usually, the difference between the two is just pennies, but when you're trading in and out of positions all day, you'd be surprised at what a disadvantage this creates.
Day trading can be especially risky if you're using margin or options to trade, or if you trade by placing short sale transactions, as these can make your account especially volatile. In fact, in some cases where trades go wrong, it's possible to lose more money than you invest.
LEARN MORE: What is stock market volatility?
How much money do I need to start day trading?
The short answer is that it depends how active you want to be in the stock market, and how long you plan to hold stocks. If you simply want to buy and sell stocks every so often, there's no set-in-stone minimum.
However, it's important to know about the "pattern day trader" rule and how it could affect you. By FINRA's definition, a day trade occurs when you buy and sell the same stock in a margin account on the same day. (Note: If your account doesn't have margin privileges, day trading is typically not possible.)
According to FINRA's rules, you'll be flagged as a pattern day trader if you complete four or more day trades in a rolling five-business-day period. And once you do this, you'll typically be considered a pattern day trader, even if you don't continue to meet the definition over time -- part of the rule says a broker can identify you as a pattern day trader if there's a reasonable belief you'll engage in day trading.
Here's why this is so important to know. If you are identified as a pattern day trader, you will need to maintain at least $25,000 of equity in your account. You don't necessarily need to use it all to day trade. For example, if you hold long-term investments, it counts toward the total. But it must be in your account if you plan to day trade. There are other limitations that apply to pattern day traders, but this is how it applies to the capital requirements.
Is day trading worth it?
It depends. While study results vary dramatically, most agree on one key point -- the majority of day traders lose money. To be fair, with the emergence of no-commission online trading, the odds are more favorable than they used to be, but don't make the mistake of thinking day trading is easy money. If you really want to give day trading a try, the best thing you can do is to learn as much as you can before putting your money at risk. This includes, but is not necessarily limited to:
- Study pattern recognition and trend following techniques.
- Learn about ways to limit your risk, such as placing stop losses.
- Learn how to control your emotions, especially when trades don't go your way.
- Practice day trading with "play money." Most trading platforms have a feature that will allow you to do this.
In short, there's no easy answer to the question "Is day trading worth it?" It depends on how much effort you're willing to put in, and whether you have the skills to be successful.
Additional resources
- Investing money for beginners
- Is a buy and hold investing strategy right for you?
- Can you buy a stock and sell it in the same day?
- How to invest in stocks
- Long-term investment strategies
- How to open a brokerage account
FAQs
Yes, day trading is legal. But if you day trade frequently, defined as four or more round-trip day trades in a five-business-day period, you'll need to comply with a $25,000 minimum capital requirement and adhere to certain margin rules.
In simple terms, stocks and options can be volatile and unpredictable. There is no such thing as a day trading system that accurately predicts stock movements 100% of the time. It's possible to lose money very quickly if trades don't go your way, especially if you're using margin, trading options, or are selling stocks short.
There are a ton of studies and reports about day trading results, and the conclusions vary dramatically. But most of them agree on two things. First, most day traders lose money. Second, some make money, and a select few make a lot of it. So, the short answer is yes, you can make money day trading, but it isn't easy money by any definition of the word.
It depends. If you simply want the ability to buy and sell stocks in order to make a profit, there's no set in stone minimum. On the other hand, if you plan to frequently trade in and out of positions, you may get flagged as a pattern day trader, which has a $25,000 minimum capital requirement. And of course, if your goal is for day trading to become your primary source of income, you'll need sufficient capital that could reasonably produce enough trading profits to meet your income needs.
Our Brokerages Expert
By:Matt Frankel, CFP®
Writer, Analyst
Matt is a Certified Financial Planner™ and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
Brokerages we evaluated for consideration on this page: Acorns, Ally Invest, Axos Self-Directed Trading, Betterment, Cash App Investing, Charles Schwab, Delphia, Domain Money, Ellevest, Empower, eToro Brokerage, E*TRADE Core Portfolios, E*TRADE, Fidelity, Fidelity Cash Management, Fidelity Go®, Firstrade, FOREX.com, Interactive Brokers, J.P. Morgan Self-Directed Investing, M1 Finance, Magnifi, Marcus Invest, Merrill Edge® Self-Directed, moomoo, NinjaTrader, Personal Capital, Plynk, Prosperi Academy, Public, Robinhood, Rocket Dollar, Schwab Intelligent Portfolios, SoFi Active Investing, SoFi Automated Investing, Stash, Stockpile, Tastytrade, Titan, Tornado App, TradeStation, Tradier, Vanguard, Vanguard Digital Advisor®, Wealthfront, Webull, Zacks Trade.
