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.
The days of calling a stock broker to trade stocks, options and other investments are long past. If you wish to be in control of your investments and trading strategies, you can choose an online stock trading site. These sites allows you to research and track stocks and their performance, order trades and monitor your positions. The services we have included on this site offer discount trades for investment vehicles, intuitive platforms with powerful tools and mobile access so you can trade without being wired to a computer.
While all of these services are easy to use, if you are new to the world of stock trading, you can have a look at our Beginning Stock Trading site for services ranked based on the support and education they offer beginners. If your trading preference lies in higher-risk investments than stocks, our Online Options site will lead you in the right direction. If you are into even riskier trading with potentially higher payoffs, our Forex site can help you choose a service. For more information on trading investments, have a look at our articles on stock trading.
Best Online Brokers
The best stock trading sites provide these solid platforms along with low commission and trade fees so you can focus your money on the market and watch your investments grow. Fees vary from service to service, but you can expect to pay a fee for each online stock trade you order. Those fees may be as low as around $5 with some brokers but as high as $10 to $15 with others. While many online brokers have flat rates that do not change, some services decrease this fee as you order more trades in a specific period of time, such as SogoTrade, which offers trades as low as $3 if you order more than 150 trades in a single quarter.
Other trades, such as options, mutual funds or bonds, come with other applicable fees as well. These commissions are based on your ordering trades online using the service's platform. Should you require assistance from a live broker, most companies charge a broker-assisted fee, which replaces the standard fee. While there is a large range for broker assisted-fees among the services on our online stock trading review, optionsXpress does not charge this fee at all.
Discount Brokers: Choose the Right Platform for You
In addition to considering fees, which may be a deciding factor for many investors, you should consider the type of platform you prefer. However, the best online trading platform will likely be subjective depending on your preference. Online platforms tend to be more simplistic and streamlined but less customizable. Many services, such as TradeKing and Scottrade, opt to offer those online platforms with familiar website layouts complete with tabs. These platforms may be better for beginners who are less familiar with stock trading and wish to avoid being overwhelmed by complicated platforms.
Those familiar with the stock market may appreciate the traditional look of desktop platforms, which often give you more control over the information you can view. These platforms, such as the ones offered by TD Ameritrade and TradeStation, offer customizable windows with traditional black backgrounds and color-coded indicators and markers on analytic charts and reports within customizable windows. If you are familiar with and enjoy interpreting stock information presented in this format, a desktop platform would be a good choice.
The services on our lineup offer the same basic features, so no matter the platform you choose, you can expect options such as customizable watch lists, streaming quotes and analytic reports, though some services offer more reports than others. Many services offer automated trading, which automatically orders trades based on parameters and rules you establish. Many services have calculators that estimate risk and volatility, among other elements, to help you decide when and what to trade. Our Gold Winner, OptionsHouse, is an online platform that not only offers all of the features we considered important in a platform, but it is also customizable so you get the best of both worlds.
Another benefit of these discount brokers is the option to trade from mobile devices. Every service we reviewed offers a mobile-trading option, whether via apps available for download or through a mobile-optimized version of the service's website. The best online trading sites offer both options. All services on our lineup offer stock trading and most also offer other trading, including options. From your mobile devices, you can perform research and monitor your watch lists, positions and option chains. Some services offer additional features, such as check depositing and barcode-scanning capabilities, including E-Trade, which offers both of those options.
How We Evaluated Stock Trading Services
In evaluating online stock brokers, we consider the above information about rates, fees, commissions and platform features. We also assessed the types of investments that the services offer. All offer stocks and options while many offer ETFs, bonds and futures, among other investment vehicles.
We further evaluated the services on our lineup by exploring the platforms themselves. We researched stocks, created watch lists and option chains, and tested the customization features of each platform. Some services offer virtual trading if you want to try out a platform or even experiment with trading stocks before investing actual money. OptionsXpress offers $25,000 in virtual money, allowing you to trade actual stocks in a simulated market. This means the results are real, but the money is not, giving you a feel for how your investments would have performed.
The sites we have included on our lineup offer more than just stock trading vehicles. While stocks are commonly traded, there is always an inherent risk with investing in the stock market. Thorough research and monitoring of individual stocks before buying or selling and understanding market trends and volatility will help you avoid losses. Some investments are more risky than others. Options present a risk because you are speculating on the future performance of a stock rather than buying and selling at face value as you do with stocks. Forex trading is even riskier. While this site focuses on basic stock trading, if you choose to try your hand at options or forex, our respective sites will be a good resource.
Our Verdict & Recommendation
When choosing the best stock trading service, you should consider your personal preferences and trading strategies. If you are an advanced trader with experience investing, you can choose a more complex platform, providing you with tools and customization to focus on only the aspect that you choose. If you are new to the market, a web-based platform that is simplistic and basic may be a better choice to help you learn the basics without complicated reports and analytics. If the bottom line and your wallet are you primary concerns, you should choose a broker with lower fees. However, while some of the more popular names in the industry have higher fees, they also have established themselves as reputable, which may be a deciding factor for you if cost is less of an issue. Our top services combine solid yet intuitive platforms with low rates and fees, so you can have the best all in one online trading software.