Best Online Stock Brokers for Stock Trading 2018
Which Online Broker Should You Trade
With?
Technology that enables traders and investors
to place their own trades, rather than having to call a representative, has evolved
considerably in the last 25 years. Data, research reports, and a great deal of
advice are now easily available to anyone willing to open an account, not just
to professionals who pay thousands of dollars monthly for access. Online
brokers allow those interested in investing and trading to build wealth,
whether it’s by making stock trades, analyzing investment opportunities, or
consulting with a professional advisor—all from their own computer or mobile
device.
We analyzed the offerings of more than 20
brokers, considering their product offerings and fee structures as well as
trading technology, special features, education, and customer service. The
stock brokers below scored highest because of the value that each brokerage
offers.
Investing involves making personal decisions,
and different brokerages focus on different styles of investing. All of
the brokers we evaluated offer distinctive, unique features and platforms. Your
task is to decide which criteria are most important to you and create your own
personal list, but we want to help you narrow down those choices.
There is no single overall best online broker:
one firm may beat the industry average on several metrics and still not be
right for you. You may have already opened an account with a broker and
feel it no longer fits your style. Though moving your account from one
broker to another is a bit of a bother, it’s not difficult.
Investopedia’s Top Online Stock BrokersDisclosure
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Despite slightly higher than average fees
among discount brokers, TD Ameritrade arrived at “Best Overall” because of the
firm’s comprehensive trading technology and their education and product
offerings. Users can take advantage of a standard web-based interface or the
rich thinkorswim trading platform. We also found their special features,
research, and mobile apps to be much better than the industry average.
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✓ Pros
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❌ Cons
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• High-quality, advanced trading
platforms
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• Higher trading costs
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• Large investment selection
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• Higher margin rates
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• Messaging with Alexa, Facebook
Messenger, Twitter
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• Assigning an asset to a particular
tax lot may require the intervention of a live broker
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• Professional and automated (robo),
low-cost investing solutions
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• A glut of features and platforms
make it confusing for a new customer to find the necessary tools
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• Excellent mobile app
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• No account minimum
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One of the original discount brokers, Charles
Schwab offers nearly all investment products, and its trading technology is
well above average. Schwab received perfect scores in the Trust category for
providing an enhanced security guarantee.
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✓ Pros
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❌ Cons
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• High-quality, advanced trading
platforms
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• Certain mutual funds incur a $76 fee
when purchasing
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• Zero-fee robo-advisory (Schwab
Intelligent Portfolios)
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• No forex trading
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• Extensive research
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• Margin fees are higher than average
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• Waivable account minimum
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With over $2 trillion in assets under
management, Fidelity is a giant of a broker with the ability to use scale to
deliver excellent customer support, special features, and low trading costs.
Their trade execution technology can save more than the commission charged for
the transaction, especially when trading more than 200 shares at a time.
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✓ Pros
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❌ Cons
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• Extensive research
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• No futures trading
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• Good education resources
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• Site demo available for only 30 days
after signing up for a Guest account
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• Commission-free ETFs and funds
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• Trade or account balance minimum for
advanced active trading platform
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• Excellent customer support
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E*TRADE’s higher than average costs are
largely offset by robust trading and analysis software. Forex trading and
annuities are missing, but E*TRADE’s advanced trading platform, which
integrates the options trading and education tools via their acquisition of
OptionsHouse, should provide a lot of value to stock and options traders.
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✓ Pros
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❌ Cons
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• Well-designed mobile app that
includes streaming data
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• Higher trading costs
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• Options trading tools are top-notch
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• Higher margin rates
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• Above average, advanced trading
platforms
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• No forex trading or any access to
international markets
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• Lower commissions for frequent
traders
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• Minimum balance requirement or trade
activity requirement for advanced active trading platform
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• Above average, advanced trading
platforms
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• Lower commissions/volume discount
for frequent traders
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Recently launched features such as Portfolio
Story and Stock Story give customers graphical representations of the
markets. With approximately 50% of the firm’s clients accessing its
services using mobile devices, Merrill Edge has updated their apps
significantly, adding financial and retirement planning along with options
analytics.
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✓ Pros
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❌ Cons
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• In-person service available at
almost all Bank of America branches
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• Minimum balance requirement for
advanced active trading platform
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• All clients can access Merrill’s
proprietary research as well as curated third-party analysis
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• No forex or futures trading
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• Extensive educational resources,
including Morningstar courses organized by complexity
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• Limited advanced/complex trades on
trading platform
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• OptionsPlay suite of tools
integrated into the MarketPro platform for frequent stock and options traders
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• International transactions must be
made through a live broker
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• Eligible customers qualify for
30-100 free stock/ETF transactions per month
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How Investopedia Reviewed and Selected the
Best Online Brokerage Accounts
At Investopedia, we started from scratch to
build a better brokerage recommendation tool and objective reviews of
self-directed brokerages. Our mission is to provide an unbiased and accurate
analysis – so that you can make smarter investing decisions.
We want to help find you the best online
stockbroker so we examined more than 100 variables, from pricing and fees to
trading platforms to special features. No single online broker was the best in
every category, so you should review the complete list to identify the firm
that best matches your priorities.
Compare Popular Online Brokers
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