Choosing An Online Broker

As TV detective Theo Kojak used to quip: "Who loves ya, baby?" That's the question online investors need to ask themselves these days. Many who are venturing back into the market will find a rather frayed welcome mat. The majority of the most popular places to trade via the Internet -- 12 brokerage firms handle 75% of all online trades -- have instituted a multitude of service levels. The amount you pay to play -- as well as the kinds of research and tools you can use -- often depends on which level you qualify for. Have $1 million to invest? Or a mere $30,000 in household assets -- but you make more than 120 trades a year? Then, Fidelity.com will charge only $8 for a market or a limit order. Don't have much cash -- or the itch to shop for stocks once or twice a week? Then a limit order will cost you $37.95, plus 2 cents for shares after the first 1,000.

Fidelity isn't the only one that plays favorites. Harrisdirect, QuickandReilly, and TD Waterhouse also offer deals to those with higher assets or more frequent trades. Everyone is chasing the most active traders, says Dennis Ceru, director of retail brokerage and investing at TowerGroup, a research and consulting firm. The most industrious investors might make up 20% of a firm's client base but generate 80% of revenues, he adds. Firms that once chased market share now turn a sharper eye on what contributes to the bottom line.