If I were to tell you twenty years ago that you could trade in and out of stocks for $1 you would probably laugh at me and think it was the funniest thing you had heard in a longtime. Back in those days it cost hundreds of dollars just to buy shares of your favorite companies and commission rates took more after all was said and done. It really made making money in the stock market a major challenge. With Online brokers the rules changed for good!
The trend to lower trades started with E Trade in the mid 90’s. Trades were $10-$15 and it turned the investing world on its heals. The large brokerage firms, who had for years pretty much robbed the individual investor, had to save face and start lowering their rates as well. As time went on more brokerages upped the ante and began new ways to attract investors. Brown Co, who offer trades for as low as $5 per trade, and Scottrade, who offer trades both market and limit for $7.
And now we have hit the $1 mark with a company called SogoInvest. As you may expect there are some gimmicks to the $1 per trade advertising that they are claiming. What they aren’t telling you is that its $15 a month charge and it lasts only 90 days. Their plans with no monthly fees charge $3.00 per trade. Who would I suggest this type of an account to you ask? Someone who is new to the market and wants to get their feet wet and people who think they may have a strategy going in and of stocks (active trading) but do not have mountains of cash to invest. There are a lot of gimmicks with this company but it does tell us something. The days of paying an arm and a leg for trading stocks are gone like the dinosaurs.