Best brokers for day trading in South Africa (2024) – ☑️ Pros & Cons Revealed (2024)

Introduction – what is day trading?

Day traders are individuals who trade in and out of securities four or more times in a five-day period, providing the number of trades is greater than 6% of the trader’s overall activity during that period.

The average day trader prefers to be “flat” overnight, meaning all positions are closed after the market closes for the day. These traders generally try to prevent market volatility caused by overnight changes in emotion or news.

Day traders typically execute small trades throughout the day to capture small spreads, a process known as scalping. Day traders typically acquire security at a low price and sell it minutes later when the market has firmed up.

A day trader’s main worry is commissions, or how much a brokerage charges for each trade. Whether a trade is a winner or loser, the brokerage gets a share of both to buy and sell transactions. So smart traders look for ways to reduce trading costs to keep more money in their own pockets.

Stock traders don’t have to worry about fees anymore because the industry has gone to zero, but options traders need to keep an eye on their costs.

In addition to the trading platform, traders should consider the brokerage’s research and tools. So while cost is a factor, it is not the only one.

The 10 best brokers for day trading in South Africa are:

Interactive Brokers

Overview

Interactive Brokers was started in 1978 and is one of the largest discount brokerage firms in the United States. They provide day trading in stocks, options, futures, foreign exchange, and bonds in more than 125 marketplaces across 31 countries, including South Africa.

For day traders, Interactive Brokers offers a lot — a reputable trading platform and the possibility of volume savings if you use the broker’s Pro service. If you conduct a lot of business, the broker will even decrease the base commission by up to 90%. While Interactive Brokers is not well-known for its research, its Trader Workstation tool will benefit technical traders by providing charting and streaming news.

If you choose the broker’s newer Lite service tier, you’ll benefit from no-commission stock and ETF trades, as well as a number of the broker’s other premium services.

Commissions for the Pro tier (minimum $1) are $0.005 per share (stocks and ETFs) and $0 for the Lite tier; $0.65 per contract (options) and volume discounts are available.

The broker is regulated by a number of financial regulators worldwide, including the Securities and Exchange Commission (SEC) in the United States and the Financial Conduct Authority in the United Kingdom (FCA).

Other features of Interactive Brokers include strong research and tools, an advanced and smart order router, and Mutual Fund Replicator which finds lower-cost exchange-traded funds.

Pros and Cons

TradeStation

Overview

Tradestation is a US-based forex broker that provides traders with access to one or more platforms for buying and selling foreign currency.

Tradestation was created in 1982 as a stockbroker and is headquartered in Plantation, Florida. It is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) (FINRA).

Tradestation offers a variety of account kinds based on the items a trader wants to trade, the account’s ownership and taxation, and the leverage permitted. Tradestation provides clients with three distinct Tradestation platforms: the downloaded Tradestation 10; a browser-based Tradestation 10; and a separate FuturesPlus platform provided by Trading Technologies for online trading for stocks, options, futures, and futures options.

TradeStation’s base commission for options is zero, which is in line with industry standards, while its per-contract cost of $0.50 beats out the majority of competitors. Additionally, its commissions on stocks and ETFs have been reduced to $0 (on the first 10,000 shares every trade). The highly adjustable desktop platform of TradeStation enables you to use a wide variety of technical indicators as well as develop your own. Additionally, traders will likely find OptionStation Pro useful for executing trades and viewing prospective payoffs.

Commissions: $0.005 per share after the first 10,000 shares traded (stocks and ETFs); $0.50 per contract (options).

Pros and Cons

TD Ameritrade

Overview

TD Ameritrade was founded in 1978 and is one of the biggest US-based stockbrokers.

TD Ameritrade has a banking background, subjecting it to tougher regulation than most brokers. TD Ameritrade is regulated by the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), Commodity Futures Trading Commission (CFTC), Hong Kong Securities and Futures Commission, Monetary Authority of Singapore (MAS).

TD Ameritrade is listed on the NASDAQ stock exchange, a big plus for safety as the company releases financial statements regularly and transparently.

TD Ameritrade’s strongest suit is probably its Thinkorswim trading platform, where in addition to stocks and options, traders can trade forex, futures, and futures options with access to more than 400 technical studies, with plenty of other tools that pro traders love. Plus, those looking for more fundamental research will find plenty.

Commissions are $0 (stocks and ETFs) and $0.65 per contract (options).

Pros and Cons

Charles Schwab

Overview

Charles Schwab was founded in 1971 as a United States discount broker targeting mostly US clients although it is also available in more than 40 other countries.

It is regulated by top-tier financial authorities, such as the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the Financial Conduct Authority (FCA) and is also listed on the New York Stock Exchange.

Charles Schwab offers free stock and ETF trading but charges high fees for some mutual funds.

Charles Schwab is a great overall broker, with an excellent trading platform, competitive pricing, and a range of research. The StreetSmart Edge platform (in desktop and web versions) allows one to structure the layout according to your trading process, integrating news feeds and live CNBC coverage. Traders will be able to set up complex options orders on an all-in-one trade ticket and find stock ideas with lots of third-party research and Schwab’s screening tools.

Commissions are $0 (stocks and ETFs) and $0.65 per contract (options).

Pros and Cons

Lightspeed Trading

Overview

A split second might mean the difference between a profitable and losing trade in day trading but lighting fast trade execution and market data delivery is a priority for Lightspeed Trading, which focuses on professional and institutional traders.

Lightspeed Trader’s platform is focused on data and order execution, and is ultra-fast, stable, and very customizable, enabling day traders to act quickly on market opportunities.

Day traders use scanners to locate volatile stocks or stocks near important price levels. Lightspeed’s scanner, Lightscan, provides unique analysis tools such as net change. Lightspeed’s block trade scanner allows you to track large traders and institutions by scanning for massive trades.

Orders can be sent to over 100 destinations, including exchanges, market makers, and dark pools. Keyboard shortcuts make it easy to set up and execute orders. Charts are also speeded up.

Some new account promos include a 50% commission rebate for three months. After three months, half of the produced commissions are paid in cash.

Pros and Cons

FP Markets

Overview

FP Markets is an Australian broker that was founded in 2005 and provides traders with access to contract for difference (CFD) trading in forex, indices, commodities, stocks, and cryptocurrencies at consistently tighter spreads and in superior trading conditions.

FP Markets is a worldwide trusted CFD and Forex broker that offers traders a comprehensive array of trading products and allows them to trade from a single account.

FP Markets understands what traders require and has discovered that a combination of pricing, execution speed, cutting-edge platforms, product range, customer support, and market analysis is critical to providing clients with trade confidence.

Pros and Cons

XM

Overview

XM.com is a global online broker that was created in 2009 and has its headquarters in Cyprus.

XM.com has become a huge and well-established multinational investment firm, with over 2 500 000 clients from 196 countries, and has become a true industry leader.

XM.com is run by professionals with years of experience in the financial business, and this, together with resources and support in over 30 languages, makes XM.com a broker of choice for traders of all levels.

XM.com provides over 25 secure payment methods, 16 full-featured trading platforms, and personal customer care 24 hours a day, seven days a week.

More than 99 percent of all XM.com orders are filled in under a second, with no re-quotes or rejections. Their clients benefit from Negative Balance Protection, which ensures that they will never lose more than their account balance.

Pros and Cons

AvaTrade

Overview

AvaTrade, situated in Ireland, was formed in 2006 with the goal of empowering people to trade confidently. The administrative headquarters of the corporation are in Dublin, with sales offices in Paris, Milan, Sydney, Tokyo, Madrid, Mongolia, Beijing, Nigeria, Santiago, and Johannesburg.

In Europe, the British Virgin Islands, Australia, Japan, and South Africa, AvaTrade is regulated. With strong core values of honesty and innovation, AvaTrade aims to put the customer first, aiding traders of all levels and ensuring a pleasant experience for its clients.

To that aim, the AvaTradeGO app is available at any time and from any location, with a user-friendly interface and cutting-edge capabilities.

Pros and Cons

Exness

Overview

It was founded in 2008 and is registered and authorized in Seychelles by the Financial Services Authority (FSA), in Cyprus by the Cyprus Securities and Exchange Commission (CySEC), and in the United Kingdom by the Financial Conduct Authority (FCA). Exness is a global financial services company with offices in Seychelles, Cyprus, and the United Kingdom.

Trade on the broker’s trading platforms, which include the MetaTrader 4 and 5 as well as a WebTerminal, with more than 130 currency pairs, commodities, and cryptocurrencies as well as energy and indexes available as trading instruments.

Pros and Cons

Plus500

Overview

Plus500 was founded in 2008 and is trustworthy for South African merchants due to its FSCA licensing. Additionally, they are controlled by ASIC, CySEC, and the FSA and are publicly traded.

Plus500 provides a unique online and mobile platform.

Plus500 offers competitive variable spreads that vary according to the instrument and market conditions. Their spreads are particularly competitive for FX majors and cryptocurrency CFDs, and they offer leverage of up to 1:30 (depending on the trading instrument).

The broker requires an R1500 minimum deposit and does not charge any fees for deposits or withdrawals.

On their platform, they provide 15 Crypto CFDs.

Pros and Cons