If you have been investing, you might know (don’t be surprised if you do not know this, lot of people don’t) that there are two basic ways to pay for your trade:
1. Pay on a per share basis
2. Pay on a per trade basis. Flat rate pricing
Purchasing High Value Stocks
Every time you buy or sell stocks, it is considered a trade. Pay per share trading is beneficial for trading high value stocks such as Goog, Appl etc. Goog is currently quoted at 566.40$ / piece and Appl is currently trading at 224.75$ a stock. If you were a small investor with less than 25,000$, I don’t really see you buying too many of Goog 
Even if you decide to pay put all your 25,000$ down to purchase Goog, you will only get 44 shares
Now lets look at some of the top brokerage firms and compare their pricing for this transaction of purchasing 44 shares of Google. If you were to be trading with Etrade, you would be paying 9.99$ for closing that purchase. That is because Etrade like most other brokerage firms charge a flat fee per trade. But I would instead recommend going with OptionsHouse, they are offering 100 Free trades with new accounts and then 2.95$/trade thereafter. Click here to get more details on how to open an account with OptionsHouse.
Now if you were to trade with a brokerage firm that charges on a per stock / share basis, you will be charged a lot less. Lets take OptionsXpress as an example, their charge is 0.01 / share if you trade more than 8 times a quarter. So for the same purchase of 44 Google shares, you will be paying 0.44$!
So the bottom line is to use a Pay Per Share Broker for high value stocks. Click here to get more details on how to open an account with OptionsXpress. OptionsXpress is currently also offering 100$ cash for new account bonus! So thats a good incentive to try them out at least.
Now lets look at the flip side, now we will talk about low value stock.
Trading low value high volume stocks
This section will apply to any stocks under 5$ per stock. This becomes extremely important for penny / pink sheet stocks. Now lets take the example of BIEL, currently it is trading for 0.0335 / share. You can buy in bulk quantities such as 10k or so. If you were to pay by per share basis, OptionsXpress would charge you 100$ !! So in that case you go for flat per trade pricing. Like I mentioned above, currently OptionsHouse is running the best offer for flat rate pricing which is 100 free trades and 2.95$ flat rate per trade after first 100. Click here to get more details on how to open an account with OptionsHouse.
In a nutshell, I would open both kinds of accounts so that I have the flexibility. Following are the recommended brokers for each category:
Pay Per Share Basis:
OptionsXpress: Currently running a special to give away 100$ cash when new accounts are opened. Charges 0.01/share. Click Open Account with OptionsXpress to get more detail about the brokerage firm.
Pay Per Trade OR flat per trade pricing:
OptionsHouse: Currently running a special to give away 100 free trades when new accounts are opened. Charges 2.95$/Trade. Click Open Account with OptionsHouse to get more detail about the brokerage firm.
To get a complete listing of brokers for two kinds of trading styles please visit:
