Online Stock Trading Review
Why Choose Online Stock Trading?
The top performers in our review are OptionsHouse, the Gold Award winner; TradeKing, the Silver Award winner; and optionsXpress, the Bronze Award winner. Here’s more on choosing a system to meet your needs, along with details on how we arrived at our ranking of 15 companies.
In past, floor trading and phone trading, via communication with a broker who ordered and completed your trades, were the only choices for trading equity shares and other investment vehicles in the stock market. In the past few decades, online stock trading has replaced those dated means of stock buying and selling. Online discount brokers provide platforms from where anyone from a first-time trader to experienced day traders can research, monitor and order trades.
A number of well-established online brokers provide their clients with access to stock markets. The best online stock trading services offer a solid platform with powerful researching and trading tools. All platforms differ, including their customizability and their design, and each service offers different levels of education and support. All services differ in their fees, so there is a range that you can expect to see. However, with some services, you pay more for the name and reputation, while lesser-known brands may charge less for trades. In our online stock trading reviews, you can learn about the features each platform includes and doesn't include, the fees you can expect to pay for stock and options trading, and support services offered.
What Every Online Investor Should Know
When you're involved with trading in the stock market, you should understand as much as you can about how to trade stocks online and about the investments vehicles you choose to trade, as there are many choices and those choices comes with varying degrees of risk. As is the case in most situations, the higher the risk, the higher the potential loss but, conversely, the higher the potential payoff. Unlike investing in simple savings accounts or CDs, investing in the stock market has its risks as the market is in constant flux. Outside forces affect the performance of stocks, including natural disasters, weather, world events and even civil unrest in foreign countries.
Risks vs. Reward
Risk versus reward is a common phrase in the stock market because their correlation affects every investment. Where there is little risk of loss, there is also smaller potential for reward. And the opposite is true, that the higher the risk, the higher potential payoff. Just like in Vegas, if you win when the odds are stacked against you, your payoff can be enormous.
The decision to play it safe or play the odds depends on your trading strategy, your portfolio goals and the amount of money you choose to invest. Many investors choose to stay with simple stock trading, in which case you buy and sell stocks at face value. Their value may increase and you'll see capital so you sell, or their value may decrease, so you sell before your loss becomes substantial. Or you may sit on a stock for years, taking a risk that the stock will make an upswing, increasing in value over time. Investment vehicles have varying levels of risk, from low-risk bonds and mutual funds to high-risk futures and Forex trading, which not all services on our online brokerage comparison offer.
The most common investment choice is trading stocks, which are a claim to part of the company's assets or earnings. Essentially, you hold equity in that company. Basic stock trading, in which stocks are traded in real time and at face value, is a popular means of trading. Buying and selling stocks online includes other vehicle choices, such as option contracts, futures and mutual funds.
Options are more complicated than basic stock trading. An option contract represents 100 underlying shares of a particular stock. With option contracts, you agree to buy or sell call or put contracts. The buyer of a call option does not own a stock but expects the stock to rise and so purchases the right (but not the obligation) to buy the stock at a predetermined future date from the seller of the call. On the other hand, the buyer of a put contract owns the stock but expects it to fall, and so purchases the right (but not the obligation) to sell the stock to the seller of the put.
In either case, call or put options, the buyer is purchasing the right but not the obligation to buy or to sell. This means that the buyer has the choice to execute or not execute the terms of the contract when it expires. The seller receives the premium paid by the buyer, and so is selling his or her right to either sell a stock in the case of a call or purchase a stock in the case of a put. If the buyer decides to execute the contract, the option is either assigned or exercised.
There is risk because option contracts may be set for months in the future, and the volatility and unpredictability of the stock market make it difficult to know for sure how that stock will be preforming at that time. The risk for the buyer is the potential loss of the premium paid to the seller. For the seller, the risk lies in if the stock performs as the buyer expect, because he or she is then obligated to sell a stock that is performing well or buy a stock that is not. To learn more about options and trading strategies, have a look at our Options Trading site and articles about online stock trading.
Futures are typically used when buying and selling commodities but can be used to buy and sell financial instruments, similar to options. While the basic way of making a profit is similar, futures come with a higher risk and therefore higher potential payout. The essential difference in the trading process is that with options, the buyer has the right but not the obligation to buy or sell the contract. But with futures, the buyer is obligated to buy or sell at the specific price.
Futures as a tactic are often used to hedge risk by creating a fixed future price for a stock, or for speculation. Companies use futures to combat potential and unexpected fluxes in the market by agreeing upon prices for trading commodities between each other and therefore transferring risk to the investor. Both parties involved enjoy fixed costs and profit margins. For the investor, if the value of a stock falls, the investor pays the difference. Conversely, if the value of stock rises, the investor keeps the difference and makes a profit.
Forex – the trading of foreign currency exchange rate – is one of the riskiest investment choices. It is the most liquid market in the world, meaning it is an extremely active markets with a large number of buyers and sellers and fluctuating prices. It differs from other markets because there is no specific physical market: everything is trading electronically over the counter.
With Forex, currencies pairs are simultaneously being bought and sold, and prices are constantly in flux, down to the second. There are 27 currencies pairs between eight major currencies. Exchange also occurs between gold and silver prices. With a pair, the first unit is the base currency and the second is the quote currency. For each pair, there is a bid (buy price), which represents how much of the quote currency equals one unit of the base currency. There is also the ask (sell price), which is how much of the quote currency you receive for selling one unit of the base currency. For more information, have a look at our Forex Trading site.
Mutual Funds are a less risky choice than options and futures and even basic stock trading. With a mutual fund, a pool of investors contributes funds to be invested in securities. Mutual funds are a safe way to build a portfolio because your money is managed by professional money managers who invests the funds to match the objectives of the investors. The level of risk is similar to that of stock trading. As you are just one contributor to the purchasing and selling of a stock, your particular gain or loss is a smaller percentage of the whole as well.
Bonds are long-term debt investment vehicles. If you invest in a bond, you are lending money to an entity, including corporations or even government entities, for a certain period of time and at a specific interest rate. When the term of the bond reaches its maturity, you receive the funds you invested plus the interest accrued over the duration of the loan. The risk of bonds comes with the worthiness of the entity in whom you invest and whether it will be able to repay its debts.
Factors Affecting the Market
The stock market is always shifting, but certain factors can create immediate changes or crashes, whether large or small. Many factors can contribute to market volatility, including internal and external events and forces. World events play a factor in market outlook and supply and demand, among other facets of the market as well. Natural disasters, war and civil unrest can have negative impacts on the market and stock prices.
One of the greatest factors that affects the market is the outlook on the market itself. When the outlook of the market is more bearish and investors expect a downward move in the market's general trend, investors expect widespread losses that cause low sales and actualized losses, which creates a downward spiral. On the other hand, in a bullish market, investors expect prices to rise, which increases buying and optimism in the stock market.
Economics are a huge driving force of the market, and supply and demand has an obvious affect on market prices. Draughts can affect crops, driving up the prices of the commodity while an abundance of another commodity as the result of a favorable growing season can lower prices. Supply and demand may also be artificially manipulated to either increase or decrease the price of specific commodities.
Best Online Brokers for Stock Trading
There are a number of considerations that go into choosing an online stock trading service, and part of that is the online stock broker itself. When choosing the best online brokerage company for your needs, you may be most concerned with the platform: how much can you customize it; how intuitive is it; what tools does it offer? However, you may be more concerned with the cost: how much is a single trade; does the company discount the price as you order more trades; what if you need assistance from a broker? In the end, the best will come down to your trading strategies and priorities.
As you invest to grow your bank accounts and retirement funds, the cost of individual online brokers may be a deciding factor for you. There are commission fees for ordering trades, contract fees for options, broker-assisted fees if you require help, rates for borrowing on the margin and other figures to consider. While all services' fees differ slightly, you can expect a certain range.
Online stock trades are generally between $5 and $10. Some service may charge more than $10, but just be aware that there are cheaper choices. Many services have a flat rate while some services have tiered commission fees, so the more trades you order in a single month or quarter, the less each individual trade costs.
When trading options, you generally pay a base rate (often the same commission fee as stock trades) plus a per-contract fee. The cost per individual contract varies among services, but you can generally expect to see between $0.50 and $1.00 per contract. If terms of the contract are met and the buyer decides to act on it, there's an additional fee for the exercise or assignment of the contract. These fees vary between as little as $5 with the best services to as high as $30 per exercise or assignment. This fee can add up if you plan to be an active options trader.
When it comes to platforms, you have two basic choices: online or desktop application. Both platforms have their merits and their limitations, though whether you view certain facets as good or bad is a matter of opinion.
Online platforms are a good choice for beginner traders as they are typically less complicated and more intuitive. They are integrated with the company's website, so the trading platform is simply another tab you click. This means that the platform is laid out like a typical website, which makes it familiar and easier to navigate. However, in many cases, it also means that it is less customizable because the windows are static and the layout already defined.
Desktop applications, on the other hand, often offer complete customization. If you want to have five watch lists open with a few option chains and streaming market news, you can choose to. Or you can keep charts and live quotes open with a single watch list. Many desktop platforms have a more traditional market look as well, with red and green color-coded candle charts and indicators spread across a black background. If this is more your ascetic, desktop applications may be a good choice. These platforms can be more complicated and less intuitive, so they may not be the best choice for those newer to stock trading or those looking to simply order a few trades every once in a while.
Mobile platforms are also something you can expect with the best online brokers. All the services we reviewed offer mobile trading, some via downloadable apps and others using mobile-optimized websites. You can research and trade stocks, monitor your positions, and keep track of watch lists and option chains. Some services' mobile platforms allow you to trade more complicated investments, such as multi-leg options and futures.
What to Look for in a Good Online Stock Trading Platform
With all online discount brokers, you should expect certain features. These include tools to research and monitor stocks, features to manage your portfolio and assess the risk of your positions, and powerful reporting and charting choices. The best online trading platforms – whether online, desktop or mobile – offer many powerful tools and reporting options.
Research & Monitoring Tools
Research features are standard, including real-time quotes providing the current buying and selling points of a stock. Screeners allow you to set parameters and specific metrics to filter by elements, including price, P/E ratio, volume, ROI and yield, among other options. These advanced filtering options allow you to watch only the stocks that meet the criteria you set for your trading strategy.
For those stocks, you also can create watch lists, showing multiple buying and selling points for a particular stock. Option chains show multiple bid, ask and strike prices for call and put options for a stock so you can find contracts that fit the parameters you're hoping for in an option contract.
Reporting & Charting
Streaming charts provide visual representations of watch lists and screeners for quick views of stocks and their performances. Many of these charts monitor down to the minute. Bar graphs and candlestick charts are common, complete with red and green color-coding to indicate a rise or fall in the performance and opening, closing and actual trade costs for a particular stock or trading pair.
The ability to add technical indicators is a useful customization option that advanced traders will find invaluable when monitoring stocks and Forex trends. optionsXpress offers offer 100 technical indicators, including momentum, trend and volume indicators. It also offers drawing tools to create trend and resistance lines, access the Fibonacci retracement, fans, arcs and time series.
Many platforms offer tips for managing, monitoring and growing your portfolio. While tips for trading stocks online are helpful, tools that actively work and integrate with your personal portfolio and platform are handy to have at your fingertips. It is important to keep in mind that given the unpredictable nature of the stock market and the performance of individual stocks, these tools can help you make educated guesses, but there is no guarantee that any information provided will stand true.
Certain calculators can offer insight into potential risk versus reward. By dividing your net profit or reward by the price of the maximum risk, you can estimate the potential risk versus reward ratio. A profit and loss calculator uses current market information – including quality and prices – to determine the potential profit or loss of purchasing a stock. Many calculators allow you to add other variables to the equation, including days to expiration, volatility, rates and dividends.
Fidelity offers a portfolio review, which analyzes your portfolio based on your investment goals. It provides the analysis of your current portfolio to offer direction, suggest strategies and provide a detailed plan of action to help you reach your goals.
Picking Your First Broker, What You Need to Know
When choosing the best online stock broker for you, you want to find one that offers the features and options that match your trading strategy. Some of those considerations are the pricing and fees, the way the platform works with your strategy, and the education offered.
If you are new to trading online and do not plan on trading often or in large volumes, the cost per trade may not be much of a factor when choosing a service. However, if you plan to order a large number of trades, those individual fees will add up, and the difference between a couple of dollars per trade may equal out to hundreds of dollars over time. OptionsHouse and TradeKing offer some of the best trade fees, with each online stock trade costing $4.95, which is a couple dollars less per trade than the average of online trading companies we reviewed.
If you are interested in trading options, you have two prices to take into account: the base rate and the per-contract fee. The base rate may be higher with some services while the per-contract fee is lower. If you plan to trade a large number of contracts, this model would benefit you more than looking for a service with a lower base rate. As mentioned above, the cost to exercise or assign an option contract will also add. OptionsHouse has the lowest fees for these two processes at $4.95 each.
If you plan to trade on the margin, you want to check out not only margin rates but also the tiers for the rates. Some services have lower rates at first glance, but those rates do not drop until your borrowing balance is well over $1 million. Once again, OptionsHouse has the best interest rates, starting at 6.5% for balances up to $25,000 and dropping to 2% when your balance breaks the $1 million mark.
Each individual service typically has its own margin account requirements, including minimum balances and minimum trading requirements to maintain an active and open account. Regulations enforced by the Financial Industry Regulatory Authority require that pattern day traders – those who buy and sell the same security four or more times in a five-day period – maintain at least $25,000 in their margin accounts.
When choosing your platform, as discussed above, you have the choice of desktop or online. Services such as Fidelity and Scottrade offer standard online platforms, which are easy to navigate and intuitive to complete tasks. Scottrade's online platform is customizable, which you do not get in every online platform. Online services like TradeKing allow you to adjust the position of some of the windows, but it is not truly customizable like Scottrade or even OptionsHouse and optionsXpress.
If total customization is something you're looking for, TD Ameritrade's thinkorswim platform is a solid choice. You can add, resize, minimize and maximize all the windows and choose which choices you are viewing. TradeStation is also a great choice in platforms for customization with its widgets and gadgets, including screeners, scanners and streaming news.
Mobile platforms across the board allow you to research and trade stocks, but some services offer additional features. Mobile apps from Fidelity and Merrill Lynch, for instance, offer check depositing, where you can snap a picture of a check, deposit the funds and immediately begin trading with those funds. E-Trade's mobile app offers check depositing as well as barcode scanning. This feature, which no other app on our lineup offers, allows you to scan a barcode and receive publically traded information concerning the related stock.
When deciding on a stock trading service, the investments in which you are interested in trading may be a deciding factor for you. Without question, every service should offer stock and option trading. All of the services we reviewed also offer IRA investments. With the exception of SpeedTrader, you can trade ETFs with the services on our lineup, and you can trade mutual funds with all services we reviewed except SogoTrade. This just means that if you want certain investment vehicles, you'll want to ensure that the service offers the particular ones you want.
Fewer services offer riskier trading of futures and Forex. Futures differ from options in that the owner of the future has the obligation to buy or sell, while with options the owner has the right to buy or sell. This makes speculating on the subsequent performance riskier than with options trading. Forex trading, the trading of foreign currencies, can be extremely risky because of the liquid nature of the market, making for potentially devastating losses. Many find the potential for profit outweighs the risk of loss.
Compare Online Brokers Fees, Services & Reputation
The features of the specific broker, including the price and platform features, are major aspects when choosing an online brokerage firm. However, the reputation of each broker may be a large consideration, including how well known and established the company is within the industry. Bigger names are more recognized as they have been around for decades, while other services have familiar advertising campaigns. Other players are newer to the world of online trading, so their names may not be as widely recognized, but their reputations and reviews from satisfied customers speak for themselves.
When it comes to the big baron brokers, a few names will inevitably pop up first. TD Ameritrade is one of those well-established names, having been in business for decades and acquiring other firms along the way. It was one of the first online brokers to offer fast online stock trades. It ranks extremely well with online business rating websites and other brokerage review sites, and we could find relatively few customer complaints.
Charles Schwab is another brokerage company that has been around for some time and one that is well known and respected in the industry. It focuses on investing and planning for your future, so it provides solid resources for learning how to invest and how to grow your portfolio. While Charles Schwab has its own trading platform, it also offers optionsXpress, which is a platform with advanced stock research and trading tools. Both Charles Schwab and optionsXpress rank well online, both with experts and with customers.
Services & Local Branches
Other names are easily recognized due to advertising on televisions and via other media outlets as well as by having local presence with branches across the country. Fidelity is well known for helping you plan your future, and it always shows up on lists for best online brokers. At local branches, you can receive face-to-face attention and guidance from expert brokers. At Fidelity Investor Centers, you can attend trading seminars to learn more about the industry and maximizing the Fidelity Service.
Scottrade is another familiar brand around most towns, with more than 500 branches located in the majority of states. You can attend in-person events covering a broad range of topics, such as learning about investment vehicles and strengthening your portfolio. Scottrade also offers a broad range of online educational events, including daily market commentary from Scottrade experts, strategy sessions, and live and archived webinars.
E-Trade is our top pick for beginner traders, providing the most comprehensive educational resources. These include access to online courses from Morningstar Classroom, webinars, video tutorials, articles and demos. It also offers 24/7 customer service and has local branches in 16 states and Washington, DC, where you can receive in-person attention to set up your investment strategies and plan for your future and retirement.
Best Fees & Rates
If lower fees are where your main focus lies, OptionsHouse and TradeKing are good choices on our online broker comparison. Both offer the lowest trade fees of the services we reviewed. Both also have solid reputations for online stock trading. Other services offer tiered pricing, so if you trade more, each individual trade costs less. TradeStation offers such pricing, with trades dropping to under $5 provided you order more than 200 trades per month.
For active day traders looking for the lowest trading fees, SogoTrade may be your best choice. If you order fewer than 150 trades per quarter, each trade is only $5, which is cheaper than many services from the get-go. However, if you order more than 150 trades in a single quarter, each trade drops to $3, which is the cheapest per-trade cost of any service we reviewed. Its per-contract fee is also one of the lowest, though its option exercise and assignment fees are higher than many other services.
For day traders looking to borrow from their brokers via margin accounts, you'll find a wide range in rates. SibertNet has the lowest margin rates, but its trade fees are significantly higher than other services on our lineup and its commission schedule is not as straightforward either. OptionsHouse offers the lowest margin rates, though its lowest rate comes with margin balances exceeding $1 million. SogoTrade also has low rates, though not as low as OptionsHouse, but to receive its lowest rate only requires a $500,000 balance, which could benefit those not looking to borrow as much.
How to Trade Stocks Online
For online trading and online investing, you simply need a broker to provide access to the stock markets. This is what these services on our lineup offer: access to the stock market without the need for a physical broker. However, you may find trading stocks to be a bit confusing at first. Many services offer educational resources, as touched upon briefly above, and some services allow you to practice trading in a virtual stock market or demos of their platforms to get a feel for how to buy stocks online. Many services provide tutorials that walk you through navigating their platform and completing tasks, and most services offer resources for increasing your knowledge of the market and investment options.
With virtual trading, you can test drive the market before you dive in with real money. optionsXpress, for example, offers its Virtual Trade, which gives you a free $25,000 virtual trading account, where you can practice trading stocks, options, futures and other investment vehicles. You receive real-time quotes from the actual market, so you can see the performance of trades you would have ordered had you traded in real life with real funds. You can experience the trading platform and charts and get a feel for the market and trends.
TD Ameritrade's thinkorswim platform offers a virtual trading platform as well, paperMoney. Similar to optionsXpress, paperMoney allows you to test drive the platform. You can order trades using thinkorswim's powerful researching and trading tools. The results are real, but the money is not so you will not lose or gain anything. You will gain experience using the platform so you are ready to trade when it is for real.
OptionsHouse also offers a virtual trading platform that you can switch back and forth with your funded account. This allows you try out strategies and experiment without any monetary repercussions. All virtual trades are hypothetical and non-binding, but you will want to ensure that you are in your virtual account and not your funded account when experimenting.
Education & Training
Educational resources can help you learn not only about a specific platform but also about the market. Every person has his or her own way of learning: some prefer to read while others prefer videos or self-paced courses with assessments to determine comprehension. All services we reviewed offer some complementary and supplementary learning material.
As mentioned above, E-Trade is top-notch when it comes to its educational material. The knowledge TradeKing offers is also impressive. Its educational options are organized by the topic about which you hope to grow your knowledge, by your skill level and by the market outlook. If you are a rookie, you can read material that speaks your beginner language without being inundated with jargon and market terms that are foreign to you. If you find yourself facing an overly volatile market outlook, you can look up strategies to help you maximize your gain.
If training courses are your preferred means of learning, E-Trade provides access the Morningstar Classroom. These courses walk you through a curriculum covering stock trading basics, building your portfolio and understanding the risks of investing in the stock market. Each course has a quiz at the end so you can test your knowledge.
Tips for Online Investing, What You Need to Know
Creating a list of tips for stock trading and investing online could be never ending. However, we've put together a top 10 list of tips for those who are ready to invest in stocks online
- Know the Risks: Know what you're getting yourself into and the risks involved with the investment vehicle you choose. Understand the current volatility of the market before you jump in.
- Determine Your Trading Style: Will you be a growth investor or value investor? Bullish or bearish? Even if your trading style changes when the market fluxes, you want to have a clear understanding of different styles, and especially when to use them.
- Choose the Right Broker: With the information provided above, you should be able to find a good online broker, whether that is the cheapest online broker, the one with the most powerful platform or the one with the best reputation. The right broker depends on your preferences and goals.
- Research: Look into the stock and its company. You will own equity in the company, so make sure it is something you believe will benefit you and your investing goals. Also, look into the past performance of the stock. Pay attention to trends in its history. It is also advisable to not buy stocks under $10 per share. Some experts even say not to go under $15 per share.
- Be Prepared to Lose: Losses happen, especially when you're learning how to trade. Understand that this is the nature of the beast.
- Be Patient: Just because your stock drops doesn't mean you should immediately sell. Many traders hold on to stocks for years and ride through the frequent ups and downs in the market. However…
- Be Prepared to Cut Your Losses: A common rule of thumb is to cut your losses at around 7% to 8% below your purchase price. You can use stop-loss orders to automatically sell a stock if it drops below the parameters you specify.
- Keep Up With News: As explained above, many factors affect the stock market, so keeping up with not only market news but also local and world news will help you avoid being blindsided by sudden events that cause the market to drop.
- Learn the Language: The language of the stock market may sometimes feel like Greek. There are many terms that you will catch on to after time, but many online stock trading sites offer glossaries so you can beef up your vocabulary in a much shorter period.
- Utilize Resources: Whether books, articles, training material, seminars or an experienced friend, seek out solid advice to learn as much as you can about the market, trading and refining your trading strategy.
Our Verdict & Recommendation
When it comes to choosing a stock trading platform, "best" is very subjective. The best for you depends on your particular trading style, your strategies, your goals and your preferences. We have provided our top picks for online stock trading services, and each has features and facets that make it a solid choice.
If your focus is strictly the bottom line and low fees are the deciding factor for you, OptionsHouse or TradeKing are a couple of your best choices. They both have low trade fees for basic stocks and for options. Their other fees and rates are competitive. They do have flat-rate fees, which benefit lower-volume traders. If you plan to order a high volume of trades, tiered commission schedules from SogoTrade or TradeStation may be better choices, though some of their other fees are comparatively higher.
For powerful platforms, you have the choice between online or desktop. OptionsHouse is a solid choice in online platforms. It is customizable and offers powerful research and trading tools. If you're looking for a simpler platform, one that is intuitive and easy to navigate, TradeKing and Fidelity are good choices.
Investment vehicles are also a consideration. Every platform on our lineup offers stocks and options, and most offer other investments choices like IRAs, mutual funds and bonds. Not all services offer riskier choices like futures and Forex. If you feel you may want to try your hand at all investment choices, E-Trade is the best choice, as it offers futures, Forex and access to international stock markets.
When reading through our reviews and considering which platform best suits your trading preferences, keep in mind that all platforms offer access to the stock market, so you can be in control of researching, monitoring, buying, selling and managing your portfolio. Have a look at our reviews and benefit from our research to find the best online stock trading service for you.
OptionsHouse - Ranked #1 Out of 10
OptionsHouse is a top provider in online stock brokers. This company provides trades with low fees and good customer service. A PEAK6 subsidiary, OptionsHouse has been in the online stock trading business since 2006.
You can customize the OptionsHouse online stock trading platform, which enables you to keep your attention on what matters to you. The platform has useful features, like a risk viewer and a Call Spread Investigator. The Call Spread Investigator highlights spreads with the best predicted returns. The platform itself is well designed with clearly marked icons and an uncluttered screen. Making a trade is simple; you just open an order ticket or go to the trade menu.
Additionally, if you do have questions about a feature, you can access the Quick Assist icon, which allows you to hover over individual tools and receive a detailed description of its function.
OptionsHouse has no minimum balance required for opening a basic account. There are minimums for certain types of accounts, such as the margin accounts, which require a $2,000 balance. Trades with this online broker are based on a flat rate, and OptionsHouse had the lowest rates of any other online stock trading company in our lineup. This online broker also offers a range of trading options, including futures, ETFs, and mutual and retirement funds.
The help and support is available during business hours, typically 7 a.m. to 7 p.m. Central time, Monday through Friday. You can reach a support representative over the telephone, through email or via live chat. You can also explore the company blog and browse the online educational resources for additional guidance and further learning.
OptionsHouse provides well-priced trades and a full range of help and support services, including a full-fledged knowledgebase and company blog. The online platform is easy to use, but you can access help and support representatives during business hours if you need additional support. For more complete information on this platform, read our OptionsHouse review.
TradeKing - Ranked #2 Out of 10
TradeKing offers a large selection of trades that build and diversify your online trading portfolio. This range of choices and this online stock broker's help and support center make TradeKing a strong choice for advanced traders and those who are just learning the ropes.
This online trading platform has flat fees for its stock, ETF and options trading. This means that no matter how much you trade, your exchange rate will remain the same. You also have the option of selecting a broker-assisted trade, which is available for an additional fee.
TradeKing provides most of the basic trades commonly found in online stock trading. You can trade stocks, ETFs, bonds and options. You also have access to Forex and the international stock exchange through this platform. One unique feature provided by TradeKing is extra-hours trading and auto-trade. These options allow you to build your trades around your schedule better, rather than having to wait on the markets.
The platform itself is very simple. It is not customizable, so you do not have the control you would with other platforms, but this also makes the platform easy to use. While you cannot add and delete sections or add watch lists, you can rearrange the layout to better suit your needs. For when you are on the go, you can easily download a mobile app. This online trading platform is available on Android and iOS devices.
The knowledgebase has a range of information for with tips for beginners and articles for educating yourself on investing styles, investment terms and strategies. The information is conveniently sorted by topic or level of experience. The knowledgebase has short articles and summaries as well as more in-depth guides that can provide assistance to even the most seasoned investors.
TradeKing is straightforward trading platform with useful information in its knowledgebase. The online trading platform has a range of tools and investments offerings for building your online portfolio. Read more in-depth information about this trading platform's features in our TradeKing review.
optionsXpress - Ranked #3 Out of 10
optionsXpress is recognized by financial sources as a leader in online stock trading and as one of the best online brokers. This company provides an easy-to-use trading platform, a full range of help and support options, and an assortment of investment options for building a diversified portfolio. optionsXpress is one of the best online brokers we have reviewed and a good choice for beginning and advanced traders.
When you are trading stocks online, costs and trading fees can add up quickly. optionsXpress has slightly higher trade fees than other top-rated companies for its options, stocks and other investments. One key feature that this online investing company offers is that it does not require a minimum balance when you open a basic account. Unlike other companies, optionsXpress does not charge an extra fee for a broker-assisted trade.
This online platform is nearly fully customizable. Not only do you have the option of rearranging the layout of your screen by clicking and dragging windows around, but you can also add new windows and modify your views. Tools that you can add to your dashboard include risk calculators, stock charts and streaming news. When you are on the go, you have the option to download a mobile app for your iPhone or Android device.
If you need support for your online investing, you can contact customer support via email, live chat and telephone. The representatives are personable and knowledgeable. If you are just looking for more information on trading or tips and strategies, the online knowledgebase provides tutorials that guide you through the platform and gives you an overview of the features.
optionsXpress has a customizable platform that you can rearrange to match your trading needs. You can search the support center for basic trading information and platform tutorials, or you can reach out to help and support. This online stock trading provider offers a good selection of trades. For more detailed information on this platform, read our optionsXpress review.
TradeStation - Ranked #4 Out of 10
TradeStation, formally known as TradeStation Securities, has a desktop platform that makes trading stocks and online investing a simple process. The platform is fully customizable, so you can view information that is important to you and clear out information that isn't central to your trading.
This online investing platform does not operate using a flat rate for trading. The prices for trades you place fluctuate based on the number of trade you place. The more trades you make, the lower the fees drop. If you trade infrequently, this tiered rate will not benefit you. However, if you place a high number of trades every month, TradeStation is an online investing platform you may want to look more closely at.
TradeStation provides a variety of investment options, including stocks, ETFs, options, mutual funds and bonds. Additionally, you can choose to pursue high-risk options, like futures and Forex trading.
The trading platform can be tailored to your trading needs and style. It is also one of the most all-inclusive and easy-to-use platforms we viewed. You can change the placement and size of the windows and determine what information is displayed on your screen.
Customer service can be reached over the phone, through live chat and via email. While client service and support for your investment is only provided during business hours, you can reach technical support 24 hours a day on weekdays. If you have questions about trading strategies, you can visit the knowledgebase, read articles on investments strategies or view video tutorials.
TradeStation stands out because of its comprehensive and user-intuitive trading platform. While the tiered fee rate can be detrimental for non-active traders, it benefits those who trade on a regular basic. For more complete information on this platform, read our TradeStation review.
Fidelity - Ranked #5 Out of 10
Fidelity is a well-established and trusted name in online stock trading. This service has a customizable platform and reasonable trading fees. When you need advice on trading stocks online, you can visit the knowledgebase on the company website or visit one of the many brick and mortar stores available in most states.
The online platform can be tailored based on your trading experience, style and needs. You can easily add graphs, charts and customized alerts. Additionally, you can create watch lists and option chains. By adding new information and shifting out information that is irrelevant, you can monitor statistics that are important to you and remove what isn't important for your trading.
Flat trade fees make Fidelity a solid choice if you do not trade frequently. Trading fees can add up quickly, and Fidelity's are just about average for online stock trading companies. Investments offered through Fidelity include a 401k, stocks, bonds, mutual funds and access to the international stock exchange. This service does not offer high-risk trades, like futures or Forex.
When you don't have access to a computer, you can place trades on your mobile device. Fidelity has mobile apps that you can download on your iPhone, Android and Windows phone. The app is not as functional as the desktop version but allows you to access trading and live quotes.
Trading stocks online can sometimes be tricky. This service provides superb service and educational materials for its clients. If you need help planning your retirement or setting up your Fidelity 401k, you can meet face-to-face in one of the Fidelity locations or explore the online resources, which include workshops and research reports. If you have questions about using the online platform, you can view one of the virtual tours or reach out to customer support over the phone, through email or via live chat.
Fidelity is a strong contender in online stock investment providers. This company provides extensive support and a platform that can be customized with an array of features. Support is available both online and in-store for face-to-face advising. For more in-depth information about this service, read our Fidelity review.
Scottrade - Ranked #6 Out of 10
Scottrade is a popular name in online trading. This company has upfront, flat-rate pricing and does not charge exorbitant extra fees for inactivity or maintenance. The online platform is built for both advanced and beginning traders.
This online broker provides four different trade platforms: Scottrade, Scottrader, Scottrade Elite and OptionsFirst. Each platform is designed to meet the needs of different levels of experience in traders. Scottrade best fits the needs of beginning and average traders who do not actively trade. Scottrade Elite is the most advanced platforms and built for active traders. Scottrader falls in the middle of these two platforms. These options give you the ability to upgrade to new platforms as your trading style and skills develop. The OptionsFirst platform is the only platform of the four that is solely dedicated to option trading. In each online platform, you can view Scottrade stock quotes and customize the stock lists and Dow Jones real-time reports you receive.
Scottrade gives you a variety of trading options to diversify and develop your stock portfolio, including IRAs, mutual funds, ETFs, stocks, bonds and international investing. The online trading fees for this service are just below average. Scottrade offers a flat fee, rather than a tiered structure. It does charge for broker-assisted trades and has higher rates than many of the other services we reviewed. This service also includes a minimum deposit of $500 when you open an account.
Buying stocks online can be tricky. Scottrade has a full-fledged knowledgebase complete with tutorials geared to help you learn online trading best practices. This online trading company also hosts educational events that you can attend in person. You can reach help and support through phone, email and live chat support. For more in-depth information about this service, read our Scottrade review.
TD Ameritrade - Ranked #7 Out of 10
TD Ameritrade has flat trade fees and an organized, uncluttered online platform. With this service, you can customize your dashboard and utilize different tools. While pricing and fees for trades are above industry average, TD Ameritrade is a solid online brokerage.
The TD Ameritrade platform, titled thinkorswim, has a functional layout. You can customize which tools and statistics you have on your dock. These tools allow you to view important information all together, rather than in separate screens. You can also tailor tools that help you spot opportunities and execute trades.
If you do not have access to your computer but need to monitor your stocks, you can download an app onto your iPhone, iPad and Android devices. While the mobile apps are not as functional as the desktop platform, you can still access quotes and make trades.
This online stock trading platform gives you access to trades that help you build your online portfolio. These trades are available for a flat fee and are not set up on a tiered structure. Trades through this company are priced slightly higher than the industry average. You can make trades in stocks, options, ETFs, bonds, and even higher-risk investments such as futures and Forex trades.
When you buy stocks online, you need to make sure that you are making sound investments. TD Ameritrade offers support services designed to educate you on basic trading methods and setting specific goals for trading, such as education and retirement investments. Additionally, you can access planning tools and calculators to help you plan your trading strategies.
TD Ameritrade has a solid offering of stock options to help you diversify your portfolio. It has a good trading platform that is organized and user intuitive; you also have the option of accessing your account through mobile platforms when you are on the go. For more detailed information, read about this service in our TD Ameritrade review.
E-Trade - Ranked #8 Out of 10
E-Trade financial is one of the most popular and recognizable names in the online stock trading industry. It offers a wide range of trades to develop your online portfolio and operates on a tiered system rather than a flat-fee structure.
This company provides three different trading platforms: E-Trade 360, E-Trade PRO and its own mobile platforms. Each desktop platform is customizable; you can add new windows with charts and graphs. These graphs display your account's information and allow you to track what is happening with your stocks and investments. You also have the option for mobile trading when you download one of E-Trade's iPhone, Android or Windows phone apps. We are happy to see Windows phone apps included in this as many services do not include it. Though the mobile platform is not as advanced as the desktop application, you can manage your accounts and make trades.
Trades available through this online stock trading platform include stocks, bonds, ETFs, IRAs, mutual funds, bonds and even more risky investments, such as futures, Forex and the international stock exchange. While initial pricing for E-Trade's stock trading is slightly higher than the industry average, these prices go down when you place more than 150 trades per quarter.
When you trade stocks online, having up-to-date information is key. E-Trade provides support through educational resources available on its website. Tools available include long-term planning tools, like a retirement planning guide. Other useful features include the recorded webinars and investment guides, which can help you plan your strategies. For more advanced needs or troubleshooting, you can contact help and support, which is available 24 hours a day on business days.
This full-service online platform has various trading platforms to meet the demands of advanced and beginning traders; no matter what level of trading you are at, you can find a platform that meets your needs. You can read more detailed information about this service in our E-Trade review.
Merrill Lynch - Ranked #9 Out of 10
Merrill Lynch, the online stock brokerage, offers a variety of trading options to help you build and diversify your online trading portfolio. This service has a streamlined platform and flat rates for trades. The trading platform, Merrill Edge, gives you access to your accounts, where you can place trades and find analytic resources that help you place smarter trades.
Tools on the platform include a screen filter, which allows you to filter which stocks you look at based on the criteria you select. You also have the option to add customized charts to your dashboard, which demonstrate how your stocks are performing. While many of the tools Merrill Lynch includes with its services are helpful, it is lacking other useful tools like volatility reports.
When you cannot access your computer but still need to manage your accounts, you can do so through the mobile apps for Apple and Android devices. The Merrill Lynch website has also been optimized for mobile browsers, so if you don't have the app downloaded, you can still check your accounts and make trades. While the mobile apps are not as advanced as the desktop platform, you can trade stocks, conduct market research and set alerts. One feature we especially liked was remote check depositing, which allows you to deposit checks simply by taking a photo with your phone.
The knowledgebase on the Merrill Lynch website provides detailed information about trading stocks. You can search the knowledgebase by category and by your level of experience. If you need additional assistance, you can contact the online broker's customer support through phone, email and live chat.
Merrill Lynch has low, flat fees and a diversified selection of available trades. The online platform is user intuitive and available through an app and on the mobile optimized platform. Merrill Lynch is an established broker and a good choice in online stock trading. For a more complete summary, read our Merrill Lynch review.
SogoTrade - Ranked #10 Out of 10
SogoTrade is a diverse online stock trading choice. This company has multiple trading platforms and low trade fees for the majority of the investments that it offers. The online stock trading platform is mostly focused on options trading, though the program efficiently lets you trade stocks and ETFs as well. The platform is fully customizable and has numerous features enabled, including watch lists, option chains and a real-time ticker. These tools give you important information needed for making the best trades for you.
When you don't have access to a computer, you can check and manage your account through the mobile trading platform. While you can trade stocks and ETFs, you do not have the same functionality that you would have with the desktop platform. While your options for trades are restricted, you can still view your orders, conduct market research and keep an eye on your positions.
This online stock broker has trade fees that are lower than average. Trade associated fees can quickly add up, so low fees benefit active traders. One unique feature with this service is that it does not set a minimum on the amount of trades you have to make. While SogoTrade has low fees to begin with, these rates drop even further when you are an active trader and make a high number of trades in a quarter. This service does charge an additional fee if you request a broker-assisted trade.
When you are buying stocks online, it is important to stay on top of market information and shifts. The online learning center found on the company website offers a good selection of educational articles and materials that cover the basics of trading and choosing a stock. You can also contact customer support for more advanced questions and technical support.
SogoTrade has low prices and a good range of investment opportunities. While its platform and mobile capabilities are limited, it is still a solid choice of an online investor. For a more complete summary, read our SogoTrade review.