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Best Brokers for Online Stock Trading in 2021 | Investing

Best Brokers for Online Stock Trading in 2021 | Investing


The Best Brokers for Active Traders

Serious active traders need to decide which online broker has the best platform for trading. With zero commissions available at most stock trading platforms, traders need to evaluate the features that are most important for their needs. We analyzed dozens of brokerage services, cost metrics and product offerings, and geared our ratings more heavily to features that meet the needs of active traders. For more information on how we choose the Best Brokers, see our methodology.

Our Top 10 Brokers

Fidelity

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Costs follow the industry trend with commission-free online stock and exchange-traded fund trades.

As one of the largest brokers in the U.S., Fidelity is designed to serve the vast majority of retail investors, and it does it well. The company boasts a strong reputation for its mutual funds but is also well-known for its brokerage services, providing no commissions on stock, exchange-traded fund and options trades.

TD Ameritrade

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Commission-free stock and ETF trading. There are no minimum investments or account fees.

TD Ameritrade, which is merging its platform with that of Charles Schwab, offers commission-free stock and exchange-traded funds in addition to no account management fees or minimums. It created a highly regarded trading platform called Thinkorswim, which is well loved by new investors and experienced traders alike. The research and educational tools are exceptional, and the TD Ameritrade Network adds top-level investment content on a regular basis.

Charles Schwab

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Fee-free online stock and ETF trading, with thousands of mutual funds available commission-free.

Charles Schwab is a discount broker with service, education, trading tools and research that puts it in the top tier of investment firms. With the ongoing integration of TD Ameritrade, including that firm’s highly recognized Thinkorswim platform, Schwab has established itself as a broker to beat.

Merrill Edge

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Free standard stock and ETF trades; 65 cents per options contract.

The Bank of America Merrill Lynch effort is a solid addition to the discount brokerage market. Customers are generally happy with the platform, mobile app and MarketPro trading offer. The research and available assets are robust enough to serve the majority of beginning to advanced investors, although professional traders might look elsewhere. Merrill Lynch’s integration with Bank of America opens the door to a wealth of products and services.

Interactive Brokers

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No-cost stock and ETF trades, with a tiered fee structure for some features on Lite and Pro accounts.

Interactive Brokers, a great choice for sophisticated traders, participates in more than 135 global markets. The firm’s broker-dealer agency business, IBKR, offers online trade execution and clearing services to institutional and professional investors and executes more than 2 million trades per day.

E-Trade

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Industry standard free stock and ETF trades, with some fee discounts on certain options orders.

E-Trade was the first completely online trading platform and continues to innovate. The firm remains competitive with access to a range of investment assets, zero-commission trades on stocks and exchange-traded funds, and the Power E-Trade platform. Its educational resources, research, videos and webinars are among the highlights of the E-Trade website, while the Android mobile apps leave room for improvement.

TradeStation

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Stocks and ETFs trade free, and other costs are tiered by the Select and Go platforms.

TradeStation serves active individual and institutional traders with a unique trading analysis platform that offers speedy access to all major U.S. exchanges. Active traders and those learning to trade might benefit from the expansive features offered by the TradeStation platform. The company is widely regarded as one of the top platforms for technical traders.

Firstrade

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Pricing is superior to competitors, with no commissions on options or mutual fund trades.

With an easy-to-navigate interface and zero commissions for most stock, fund and options trades, Firstrade appeals to cost-conscious investors. The Options Wizard and extensive access to charts and tools are a plus for users. The stock screeners are solid, and integration with Morningstar provides well-respected research. Although Firstrade’s platform offers enough resources for most investors, anyone seeking an expansive educational platform should look elsewhere.

Ally Invest

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Margin rates and per-contract options fees are lower than average. Remaining fees are in line with industry norms.

Ally Invest offers stocks, exchange-traded funds and bonds, plus foreign exchange, six levels of options trading and low-commission mutual funds. The fees are competitive, and Ally Live provides web-based research, analysis and trading on a streaming platform. Access to Ally Bank high-yield cash investments and lending is an advantage.

Vanguard

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Costs are low, consistent with the firm’s commitment to low-expense index funds and ETFs.

Vanguard is a major financial marketplace offering a vast array of investment products and services, including managed accounts and robo-advisor platforms. The firm isn’t considered a platform for active traders, but it’s a solid choice for buy-and-hold investors and those seeking commission-free mutual funds.

Public

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Commission-free stock and ETF trading. There are no minimum investments or account fees.

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Free platform offers no-cost stock and ETF trading in a limited time window. An upgraded platform carries additional fees and services.

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The low- and no-fee products and services enable members to cut costs to the bone.

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There are no trading commissions or fees to open or maintain an account.

More Brokers to Consider

Factors to Consider When Choosing the Best Stock Trading Platform

Active traders of stocks and exchange-traded funds, or ETFs, differ from investors with a buy-and-hold approach to investing. Active trading describes the practice of buying and selling financial assets based on expected price movements in order to make a short-term profit. Active traders seek out small and frequent wins and are less concerned with the underlying business of a stock than traditional investors.

Due to their different offerings, the best online brokerage for traders will be different from the best stockbroker for buy-and-hold investors. Frequent traders buy and sell securities more often, trade during extended market hours and require specific tools that a traditional investor doesn’t need.

To choose the best online stock trading firm, consider your investment goals and strategies. Then match your needs with the online brokers’ features.

Fees and Minimums

An investor seeking the best brokerage account for trading needs to consider the assets she will be trading, as well as how much money she has to deploy. Online stock brokers require varying minimum investment amounts for trading and charge a range for fees for frequent traders.

For the smallest investor wondering, “How much money do I need to start investing?” look for a broker with no minimum investment amount required. Fortunately, most of the best online stock trading platforms like Schwab, E-Trade, Fidelity and TD Ameritrade don’t have minimum investment amount requirements.

Additionally, most major online brokers, with the exception of Speed Trader and Wells Trade, don’t charge annual account fees either. Although, some of the niche online brokers might levy an inactivity fee.

Beyond the zero commissions for trading stocks and ETFs at most brokerages, there are additional fees. Some firms charge for penny-stock trades. Most, with the exception of Robinhood and Firstrade, charge a per-contract fee for options trading.

If you expect to trade on margin, or borrowed money, investigate margin rates charged for this service, as there is a lot of variability in online brokers’ margin interest rates.

Should I Invest With the Cheapest Broker?
Price is one factor to consider when choosing the best brokerage account for you, but it’s wise to consider other factors too. You need to make sure that the broker has good customer service and offers the investments you’re seeking and any other features that are important to you.

Hours

Available trading hours are important for traders. Standard trading hours for the New York Stock Exchange and Nasdaq are 9:30 am to 4:00 pm Eastern time on weekdays, excluding holidays. Most of the best brokers for active traders offer extended-hours trading, including Webull, Tastyworks and TD Ameritrade. Additionally, there might be additional trading windows for options, futures and other asset classes.

Consider trading hours, along with customer service hours and specialists when evaluating the online trading sites.

Trading Platform and Tools

Most of the best stock trading platforms are replete with downloadable systems that offer an array of features including:

  • Customizable charting.
  • Technical indicators.
  • Options and futures trading tools.
  • Alerts and watch lists.
  • Trade journals.
  • Screeners.
  • Complex orders.
  • Paper trading.
  • Calculators and risk analysis tools.

Since each trading platform is different, it’s important to read reviews and match up your needs with the broker’s offering. Thinkorswim at TD Ameritrade is user-friendly and is popular among active traders. Meanwhile, there are some platforms, like Tastyworks, that cater to options traders. Examine the features and customer reviews before choosing the trading platform.

Mobile Apps

All of the top trading platforms offer mobile apps for Android and Apple products. Mobile apps are important if you expect to trade from your phone. Mobile users should explore the written reviews and ratings on the Google Play and iOS sites.

Each brokerage’s app offering varies. TD Ameritrade offers multiple apps including the basic TD Ameritrade app and the Thinkorswim trading app, along with several other apps. The Fidelity mobile app will transfer you to the web-based platform for some features such as investment research reports.

Not only do app features vary, but ratings do, too. Fidelity’s app ratings at the Apple App Store and Google Play are usually at the top of the list. Tastyworks brings up the rear among brokers U.S. News reviewed, with average ratings below 3 out of 5 on iOS and Android.

Investment Products

If you’re looking to trade stocks and ETFs, then most online trading platforms will work. Most of the best online trading brokers offer stocks, ETFs, bonds and basic options. If you’re seeking complex options strategies, futures, foreign exchange, international stocks, IPOs or penny stocks, then check out the investment products page on the broker’s website. There are only a handful of brokers that provide access to international and currency trading. Day traders and options traders might look for brokers that cater to their preferences.

Market Research

Investors need to understand how the overall market and economy are growing, or not. The information brokers provide informs fundamental and technical traders alike. Most online investment brokers offer at least general stock market news.

Traders need a specific type of market research and information. Frequent traders need information about price movements and indicators for specific securities, indexes or sectors, which are usually found on charts.

Fundamental investors and those who trade less frequently will look for company and sector research reports, including third-party research. Day traders will be more interested in charting and technical market research.

Security

Fortunately, nearly all investment brokers have stellar security, comparable to banks. The security features typically include:

  • Firewalls.
  • 128-bit encryption.
  • Two-factor authorization.
  • Mobile app security features like voice, face and fingerprint recognition.

Do Brokerages Insure Your Investments?
Every investment broker carries insurance from the Securities Investor Protection Corporation up to the legal limit for each account. SIPC insurance typically covers up to $500,000 per account per brokerage firm, of which $250,000 can be in cash. The majority of major online brokers for trading also have supplemental insurance that covers the broker in the case of bankruptcy or malfeasance. This insurance typically covers millions of dollars of account value.

Customers are not protected against declines in their investment values. These periodic losses occur when individual investments drop in price.

Because brokerage customers have different needs, please consider our other “Best for” brokers lists:



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