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Self-directed investors have more online brokerages to choose from than ever. Two of the more popular services are E*Trade and OptionsXpress. We recently reviewed them both and determined that, when compared side-by-side, OptionsXpress is a better choice for low-volume traders, while E*Trade remains the online brokerage standard for experienced traders who make frequent transactions.
The two online brokerage firms are among the more affordable, with OptionsXpress costing $8.95 and E*Trade $9.99 per ETF, stock or option transaction. However, E*Trade charges more per mutual fund transaction ($19.95 versus $14.95 through OptionsXpress). Neither company charges an inactivity fee, although E*Trade does charge a maintenance fee, surcharges on penny stocks and IRA setup and annual IRA fees.
OptionsXpress, part of the Charles Schwab Corporation, was founded in 2000 and is headquartered in Chicago. It serves customers worldwide as an online broker for stocks, options, ETFs, bonds, futures and mutual funds.
E*Trade, meanwhile, was founded in the early 1980s, making it a pioneer in the field. Based in New York City, it too is an online discount stock brokerage service for those comfortable with doing their own trading.