Sogotrade Offers Online Stock Trading for $3 Per Trade

As I search for online stock trading sites for my SEP IRA, it’s been interesting to watch the discount brokers compete on price. Zecco was one of the first deep discount brokers, offering free stock trades. They’ve since been acquired. But recently caught my attention because it offers stock trades for just $3 per trade.

As far as I know, $3/trade is the cheapest online stock trading you’ll find. With Zecco, you do get some free trades, but there are preconditions you must meet (either minimum balance or number of trades, many of which cost $4.50). But here’s the key for me as it relates to Sogotrade—I don’t trade a lot. I do plan to buy individual stocks in my SEP IRA, but I still don’t expect to trade more than a few times a month. With Sogotrade, it doesn’t matter. Trade once a year or once an hour, and the cost is still $3 per trade.

So the first question this raises is how does Sogotrade do it? How do they offer $3 trades when all of the other online discount brokers charge more?

According to Sogotrade, they undercut their competition on price through volume and by developing their own proprietary systems that other online brokers must license from third parties. As for volume, Sogotrade transacts over 120 million shares a day. While that doesn’t make it the highest volume discount broker, it is impressive, beating out the likes of E*Trade and OptionsXpress.

Regardless of how they do it, Sogotrade has managed to offer the lowest cost equity trades with unlimited shares per transaction. Here’s a price comparison chart:


Bonus Features Offered by Sogotrade

Sogotrade offers some bonuses when you sign up for a new account. Three bonuses actually, and they all may be of interest to you.

1.Up to $100 back when you transfer an account: Most online brokers are now offering to refund the cost of transfering your account from your current broker. These transfers occur through the Automated Customer Account Transfer Service, and there are costs associated with the transfer. Sogotrade will reimburse you up to $100 to cover these costs.

2.100 Free Trades: With a new account, you get 100 free trades during the first 30 days your account is open, for a savings of up to $300. Not a bad deal depending on how much you trade. I’m a big believer that every dollar counts, even incrementally small transaction costs. While I wouldn’t chose Sogotrade because of this bonus, it’s a nice add-on.

3. One Year Free Subscription to McAfee VirusScan Plus and SiteAdvisor: This bonus came out of left field for me, but it’s an interesting approach to marketing for an online broker. The idea is to provide new accounts with software that can detect viruses that may make transacting trades online unsafe. Again, I wouldn’t chose a broker for this reason, but if I’m looking for the lowest cost anyway, why not get some free software.

Options Trading and Account Minimums

Sogotrade also offers low cost options trades. While options aren’t a part of my portfolio, if you do trade options, Sogotrade’s costs are again one of the lowest among online brokers. Trading options costs just $3 per trade plus $0.70 per contract.

One final note–there is a $500 minimum balance requirement to qualify, but that shouldn’t be a problem for most folks. If you’d like to see Sogotrade in action, check out this video of its trading platform:

All in all, I think Sogotrade’s deep discount stock trades make it a real contender in the online discount stock trading wars. If you’d like to check Sogotrade out, you can visit the site at

Topics: Investing

10 Responses to “Sogotrade Offers Online Stock Trading for $3 Per Trade”

  1. Sogotrade no longer offers $3 trades unless you have a 50 trade moving average over 3 months. Trades are now $5 each unless you buy prepaid packages. The prepaid packages are a bad deal mainly because it shows that you paid $0 commission on each trade. The result is tax problems because your cost basis for each buy/sell gets messed up and Turbotax, the only software that ports Sogotrade tax statements does not even port your cost basis for commissions.

  2. Adam Smith

    I have been using SogoTrade for 2 years now and have been very satisfied with their service. The trades are very cheap ($3 per trade), there aren’t any hidden fees or tricks to take more money. No maintenance fees or any other fees. The trade ticker is real-time, and trades take place within 1 second, with the option to cancel until about 3 seconds after. I’ve called their support line about 8 times to ask information, and I always immediately got on the phone with an intelligent representative who knew the answers to my questions.

    To receive 25 free trades, use referral code 564838 when signing up for SogoTrade. The free trades are valid for 90 days after signing up. A minimum of $500 needs to be deposited before you can begin trading. You can do free ACH transfers to and from your bank account.

    SogoTrade is probably the cheapest online-trader there is, with a service that is on par or better than the three other companies I used to use for stock trading.

  3. frugalgrad, your idea sounds like the way to go. Penny stocks offer my hype that anything else. Also, if you are struggling to save up $500 for the minimum balance at Sogotrade, you might want to think about building an emeregency fund before investing anyway. Good luck!

    • Good Advise to frugalgrad DR. I would like to add one thing concerning penny stocks. I am a fairly active penny stock trader (most of my stock purchases have been in the $2 and under range). I have found that the same thing applies to penny stocks as for blue chips – do your research and invest in the company, not the stock price or some promoter’s hype. For example, during the recent down turn Ford, Beazer Homes, Genworth Financial and Citigroup all fell to penny stock levels. The market should not be viewed as a short term way to make a fast buck, as the ones telling you that are trying to sell you the false idea that they can time the market.

      • Another option for small potatoes traders is If your looking for a discount broker with no initial balance requirement and no extra charge for “penny stock” trades. I believe the rate for buys and sells is $5 which is higher than sogotrade, but it may be worth it if you don’t want to get hit with a surcharge for pink sheet trades.

  4. frugalgrad

    That 500$ minimum balance is a big problem for me since… well, I don’t have it. All I can afford right now is Penny Stocks. But the problem is it’s not easily profitable as it sounds. Some people promote day trading with penny stocks and make like 200-300$ a day. Sound good but not true. Penny stocks went up and down like crazy. So I don’t think this kind of trading is for me. May be I better off saving up a reasonable amount of money, read Intelligent Investor, and then go from there for a long term gain.

    • I’d stay away from the pennies, but you can do well with Sogotrade and $500. Research some stocks and trends in them, and the markets, and I watch Cramer- take half to heart and listen to the other half. The $3 trades are great, sounds like a lot when working with $500, but that’s what I started with, and gave myself rules. Take the trade cost into account when thinking percentages on gains/ losses. I don’t accept losses because if I’ve done the research, I don’t have them. I’ve only taken three losses on over 250 trades because I thought the stock was too high or I thought the market would tank. I then put the proceeds into something that had tanked to mitigate the losses and strenthen the position for the next upturn. It goes to the theory of buying low and selling high. It’s rare that you buy at the lowest and sell at the highest so my rule is if something hits +20-25% I sell, unless there is some big market move or a sector move. I then buy more of the stock in my portfolio that is at the biggest loss, but I never let anything lose more than 10%, unless it’s a cyclical commodity, then I buy more of it. It’s worked out that I never have more than an 8% gain or loss in the portfolio which keeps everything in balance and I don’t sweat the small things. There are the days where I took the 25% profit thinking the stock was too high and it went 60%, but at least I got 25%. The next day it drops all that and more. So be happy with what you get and play it smart. $500 and Sogotrade can do it for you. That’s what I started with and made some rules after some mistakes. Hope this helps.

  5. I should mention that while I’m looking for a place to park my SEP IRA, sogotrade does not yet offer IRA type accounts. I’m told that they should have these available by the end of this year.

  6. reinkefj, you and I’ll will have to agree to disagree on this one. I’ve never viewed Wall Street as a gamble or a casino, and never will. A long term, buy and hold strategy (whether mutual funds, ETFs, individual stocks, bonds, etc) will do well. I’ve been at this “game” nearly 20 years, through ups and downs, and I still believe that a diversified portfolio of stocks and bonds is the recipe for long-term net worth growth.

  7. Nothing against discount brokerages, but may I suggest that it might be the “right answer to the wrong problem”. I was always enamored of the metaphor of “leaning your ladder against the wrong wall”. Recently, after many years of meandering and sometimes successful trading (i.e., went all in on a stock that tripled), I’ve decided that, like medicine, sometimes one can be too smart for one’s own good. I hired what I’ll describe as “an institutional portfolio manager”. (Yeah, have to a 500k$ portfolio to get into that game!) But, I’ve concluded that the “casino” (aka Wall Street) is no place for the DIY crowd like I once was. The electronic trading, the specialists, the “financial consultants”, mutual fund’s crass graft, and all the other machinations have taken the “game” to a new level. The globalization of finance has convinced me that the dollar is on a fast road to perdition. Even gold coins now carry a hefty 12% markup over spot. SO there is no “good” investment for the little guys. Even at cheap transaction fee!

Leave a Reply