Whether you’re an active investor or just looking to get started, it’s important to have a stockbroker who can help you act fast and make trades. The stock market is a volatile place, so even the best investors can benefit from the knowledge of an experienced broker. If you’re looking for the best brokerage firms so you can work with a knowledgeable broker, take a look at our comprehensive list of the top options.
How to Find the Best Stock Broker
As you search for the best stock broker, it’s important to understand that whatever features make one better for you may not be as good for other investors. Certain factors, such as your investment interests, goals, and tolerance for risk, will impact who the best stock broker is for you. However, there are some common aspects that make certain stock firms more appealing and trustworthy than others.
As you research options, look at factors like what the firm charges for trades, whether you have to start with a minimum balance in your account, commissions, and margin rates. These will all impact what you receive from a successful trade. You should also assess the brokers who work at these firms to determine who might be a good fit, based on your goals. If you want to invest in a specific industry, working with a broker who specializes in that industry will likely be more helpful to you.
Take a look at the 7 best online brokerage firms to find your ideal broker.
- TD Ameritrade
- Interactive Brokers
- Charles Schwab
- Merrill Edge
TD Ameritrade is one of the largest online brokerage firms and offers several platforms. You can start with the basic website, which is fairly straightforward and allows you access to the trading resources right away. If you’re a more active investor, consider upgrading to the thinkorswim platform, which is designed for those who make a lot of trades. The company acquired Scottrade recently, bringing more than three million new customers onboard, and has been making considerable effort to streamline the platforms and content available.
Some of the aspects of TD Ameritrade that make it one of the best investment brokers include a recent elimination of base trading commissions for U.S.-based customers on ETFs, options, and equities, as well as education offerings that provide insights into trading for newcomers to the market. Additionally, the company has expanded its support to make reps available via Twitter, Facebook Messaging, WeChat, and other social platforms. You can research stock options, talk to a broker, or review the latest news about a specific company, all in one place. TD Ameritrade also has a $0 account minimum.
For more sophisticated and experienced investors, Interactive Brokers is an excellent option. This brokerage firm can connect to global electronic exchanges, allowing users to trade futures, options, and equities that are sold around the world. Take advantage of round-the-clock trading opportunities on 120 different markets in 31 countries. The platform is accessible via a mobile app and the web, ensuring that you can stay connected to your trades from anywhere.
Interactive Brokers has also invested into its platform to increase the available assets and features in order to appeal to newer investors. One of these is a robo-advisory, where you can ask questions and get answers. It also offers IBKR Lite, a smaller version of the platform that provides commission-free U.S.-based equity trades. The pricing structure with this firm is reasonable and seasoned investors love the portfolio analysis features. In most cases, Interactive Brokers is best for those who have more experience, although the company has been making strides in offering resources to those who are just starting out.
E*Trade provides access to a robust analysis and trading software platform, which was launched in December of 2018. This platform is called Power E*TRADE and combines educational tools with options trading, providing new value to those who want to trade both options and stocks. In early October 2019, the company also eliminated all base trading commissions on U.S.-based options, ETF, and equities trades, although the margin interest rates are higher than you’ll see with other online brokerage firms.
If you want the more advanced tools, you will have to upgrade to the Power E*TRADE app rather than using the standard app. This app also has a built-in mobile futures ladder for those who enjoy trading futures. The features of this ladder will also become available for other asset classes in the next year. Integrated performance risk tools also allow you to perform a stress test on your whole portfolio, a single asset, or a trade you are considering.
Although Fidelity customers experienced some issues in 2018, the company has taken major steps to improve its reliability and infrastructure, making it another of the best stock brokerage firms. The offerings include services and tools that deliver great value. The Active Trader Pro platform is now available to all customers, rather than only being available to more active traders, and Fidelity modified some of the aspects of the interface for order entry to minimize commonly made errors.
As of October 2019, Fidelity also eliminated commissions on ETFs and stocks for customers in the U.S., as well as the base per-leg charge that was previously incurred on options trades. Under the new pricing structure, options trades are available for $0.65 per contract. The revised fee schedule is also easier to understand. A built-in ETF research center provides insights into which stocks compose the fund, so you can learn more about trading within the platform. Fidelity also has a $0 account minimum.
Charles Schwab is an investment firm offering both technology and services for people on all sides of the trading spectrum. The company has a wide array of platforms that range from simple to complex, as well as a staff of experienced financial advisors and brokers who are available to assist with any questions. In the recent past, Charles Schwab has transformed its web-based platforms to make them easier to use and has eliminated base commissions for ETF and stock transactions. The per-leg fee for options trades has also been eliminated.
One of the unique aspects of this online brokerage firm is its Schwab Satisfaction Guarantee, which allows any client who isn’t happy with a fee-based service to receive a full refund. The StreetSmart Edge platform also includes advanced trading tips and tools for options traders. If you like to stay connected and trade on the go, you’ll appreciate the fact that the web-based and mobile platforms include the same functionality. The account minimum with Charles Schwab is $0.
Merrill Edge, formerly known as Merrill Lynch, is an appealing brokerage firm for more casual traders who want to start out in the market without investing too much. It has a number of research tools built into its platform, allowing you to search for information about a specific company or investment before you take the plunge. The recent acquisition of Merrill Lynch by Bank of America has resulted in the forming of Merrill Edge, giving customers access to the 2,500 Bank of America locations around the country.
Although there are small commission fees charged on most trades, Preferred Rewards customers can take advantage of commission-free ETF trades. In order to become a Preferred Rewards customer, you will need a three-month average combined balance of at least $20,0000 in your account. Available securities on the platform include options, bonds, stocks, mutual funds, and ETFs, and the account minimum is $0.
Although Ally does charge a minimum of around $4 per trade, it is still an appealing online brokerage firm offering a variety of research and data tools. You can take advantage of the integrated account automation, which allows the company to make responsible and researched investments for you, for an annual fee that costs 0.3% of your balance. Ally is one of the best online brokerage account options that does require a minimum for a managed portfolio, which is $2,500. To open your own account, the minimum is $0.
In order to get started, you will also need to invest in the starting broker-assisted trading fee, which is $24.95. Once you’re in and have an account set up, you can use the free tools that will help you research different assets and start making trades.
As you compare the various online brokerage options, you can always consult with a trading expert who can provide more insights into the pros and cons of each. At Raging Bull, we have a team of trading insiders who offer free 1:1 training sessions and online webinars to help you learn more about trading and become a more experienced investor. Take advantage of the resources available to decide which brokerage firm will be the best fit for you and your investment goals.