I’m not sure how much it costs to execute a stock trade but it doesn’t appear to be all that much. When I first opened up my first brokerage account, it was with Vanguard. Vanguard has two main types of investor accounts, one where you invest in their family of mutual funds and one where you can invest in stocks, bonds, ETFs, etc. When I opened up my Roth IRA as a teenager, I did it with Vanguard and paid a then staggering $20 a trade. Twenty bucks! Nowadays, you can buy and sell a stock twice with TradeKing and still have twenty cents left over to get some Bazooka Bubble Gum. That’s a cheap stock trade right there.
So what defines cheap? Ultimately it comes down the dollar amount because you’d have a difficult time arguing that $12.99 is cheaper than $4.95. However, I think that just looking at the cost of the stock trade may be a mistake. Certain brokers charge you less but they offer you less in terms of tools, service, or both. Sometimes you have to review all the factors to make your decision.
Below I’ve listed a bunch of discount stock brokers that I’m familiar with and included my thoughts on all of them. The only two I have an active relationship with (opened an account, deposited funds, and have executed a trade at) are E*Trade and TradeKing. At the moment, I am slowly transitioning from E*Trade to TradeKing.
Best Online Brokers with Cheap Stock Trades
TradeKing  is where I currently do most of my stock trading because they charge only $4.95 a trade, whether it’s online or broker-assisted. There is no minimum balance, there are no account maintenance fees, and despite the relative thriftiness of their service, they consistently rank highly in industry publications. Most notably, they’ve been recognized as having excellent customer service on numerous occasions. Another area that TradeKing excels at is in their educational products. They have an extensive options tutorial classroom where they teach you everything you could possibly want to learn about options trading. Finally, most brokers will charge you a fee if you want to transfer your account, TradeKing is willing to reimburse you that fee up to $150.
Scottrade  charges $7 per trade online with no account maintenance or no inactivity fees. The fee for trading stocks over their phone system is $17 and broker assisted trades are $27. For mutual funds, they maintain a list of NTF Funds where they charge no fee and only $17 for funds outside the NTF program. For loaded funds, there is only a sell fee of $17 (there is the load itself too). Scottrade has been in business for a long time, I remember seeing advertisements on Yahoo! Finance back when I was a teenager, so this would make them the grandfather of the bunch.
E*Trade Financial  is the one with the talking baby and they charge from $12.99 a trade down to $6.99 a trade, based on your volume. $12.99 is the standard rate, $9.99 a trade if you make 30-149 trades a quarter or have $50,000 in assets, and $7.99 a trade if you make more than 150 trades a quarter. While I don’t advocate you ever make a ton of trades to get cheaper stock trades, I want to let you know that volume does get you a lower rate (though other brokers charge less to begin with). Much like others on this list, there is no account minimums and no account fees if you get online statements and confirmations. Finally, E*Trade usually runs a promotion where you can get 100 commission-free trades in the first 30 days if you fulfill some account requirements.
TradeMONSTER  is a Barron’s four star rated broker (2008) that charges $7.50 a trade up to 5,000 shares. They only charge $15 on mutual fund purchases, $0 on sales. They are a subsidiary of an options trading firm, OptionMonster, and were formed in 2007 by several industry veterans. While I haven’t used the tools, the screenshots reminded me of the application available to Power E*Trade customers. If you want the tools, I don’t think any other broker will give you access to them for free and only charge you $7.50 a trade. If you’re happy using a web-based trading platform, then you won’t be able to take advantage of the suite of analysis tools available through TradeMonster’s app. TradeMonster has a minimum opening account balance of $2,000.