If you need a new online broker or are just getting started with stock trading, you may feel overwhelmed with choices. After all, it’s a big decision that can affect your ability to perform sound research and maximize your earnings.
Ready to have your choices narrowed down for you?
Check out our list of 2020’s top online stock trading platforms. You’ll find all the details you need in this accessible guide so you can get right to the good part: starting your trades.
Robinhood is a trading app that provides commission-free options, ETF, and cryptocurrency trades. For a long time, the company stood out as one of the only online brokers offering comission-free trades, but this has become more commonplace in the past year.
But Robinhood is still a great option for anyone looking to get started with investing. And its still one of the few apps that allows you to trade cryptocurrency.
Many people like Robinhood for its simplicity. There is no account minimum to get started and no annual fees. The company offers a web-based and mobile app and customer support options.
However, a common complaint about Robinhood is that the company’s offerings are very light on the research. And while the app is easy to use, there is very little offered in the way of customizations.
Though trade commissions are somewhat high, TD Ameritrade offers investors a ton of perks — including a comprehensive trading platform, great customer support, and mobile app.
While beginning investors can certainly find a lot of value with TD Ameritrade, it’s has a huge amount of resources for advanced traders in particular. You can choose from one of three trading platforms:
Web Platform: This cloud-based tool allows you to manage your investments all from a single location. It comes with alerts, planning tools, and tons of research and education sources.
Trade Architect: A more in-depth tool for online trading, you can monitor potential investments, use custom charting, and view live news streams. Plus, you can get help from former floor traders.
thinkorswim: This macro data hub gives you access to economic indicators from across the globe. If you’re new to trading, you can practice with the paperMoney program.
When you pick TD Ameritrade, you don’t need a minimum amount of money in your account. U.S. exchange-listed stocks, exchange-traded funds (ETFs), and options no have $0 commissions fees and a $0.65 per contract fee applies for options trades, with no exercise or assignment fees.
TD Ameritrade offers over 2,300 commission-free ETFs and almost 4,000 no-transaction-fee mutual funds. And you don’t have to worry about how much you’re trading because there’s no inactivity fee or even an annual fee. However, it’s $75 for an outgoing transfer fee.
If you’re a stock trader with a penchant for research and extensive platforms, TD Ameritrade is a great fit.
Known for their great customer service that’s available 24/7, Ally Invest is another online broker providing low barriers to entry in the trading game. There are no account minimums and low commission fees. Not only are stock and ETF trades just $4.95 each, you can also receive a discount when trading in volume.
The bottom line for getting cheaper trades?
Make either 30+ trades per quarter or keep a minimum of $100,000 in your brokerage account. That drops the commission fee to just $3.95 per equity trade. The standard options trade of $4.95 plus $0.65 per contract drops to $3.95 plus $0.50 per contract for active traders.
In addition to the traditional securities found at most online brokers, Ally Invest also offers forex and futures trading. You can take advantage of free data if you make at least one forex trade within a 90 day period. Instead of paying a trade commission, you’ll instead be charged on your forex trades based on the spread markup.
What kind of platform can you expect from Ally?
There’s just one web-based trading platform so you can log in from any device. Like most other online trading platforms, Ally’s gives you live streaming of quotes and data plus a dashboard you can completely customize. You can also access your brokerage account through their iPhone or Android mobile app.
Ally also shines when it comes to investing tools. Options traders, for example, can utilize the pricing calculator to compare current prices to forecasts. You can also pick your own criteria within the strategy scanner to help identify various options strategies.
Charles Schwab requires you to start off with a bit of skin in the game, with a minimum opening deposit of $1,000. You can, however, check for promotions that often allow you to waive the minimum if you sign up for monthly $100 deposits. It’s an easy entry point for beginning trade enthusiasts.
When you’re ready to start trading with Charles Schwab, you can enjoy lower costs of just $4.95 per trade and $4.95 plus $0.65 per contract for options trading.
ETF lovers will appreciate the 200+ commission-free funds in addition to 3,000+ mutual funds with no transaction fees. You get to skip any kind of annual or inactivity fee on your account, but it’s $50 if you ever decide to close your account.
While you can choose from two different trading platforms, StreetSmart Edge is the more sophisticated version for frequent stock traders.
Don’t let the easy customization fool you. You can perform in-depth research and monitoring of your stocks with features like streaming market data and your account buying power.
Additionally, they provide countless reports, from its own equity ratings to third-party data from industry stalwarts like Morningstar, Market Edge, Capital IQ, and more. And for access to all of this at your fingertips anytime, anywhere, the mobile app carries just about all of the same features as the web version.
Data-centric traders could definitely gain a lot of insights by choosing Schwab for their online stock trading.
Fidelity may require a rather hefty minimum deposit of $2,500 but makes up for it with its attractive commissions.
It’s just $4.95 for each trade and the same amount for options, plus $0.65 per contract. This is a recent drop, so if you previously discounted Fidelity, it’s time to take a second look.
Do you want extensive NTF mutual funds? You’ll find about 3,600 with Fidelity. There are also about 91 commission-free ETFs, which is certainly encouraging but not the most we’ve seen.
One interesting feature with Fidelity is that you can do forex trading along with more standard securities. Like many of the brokerages we’ve reviewed, there are no account fees or inactivity fees.
Looking for a robust trading platform?
Check out Fidelity’s Active Trader Pro. To get access, you will need to make at least 36 trades in a 12-month period. If you fit the bill, you’ll get a fully customizable account with real-time streaming and market updates.
You can also look at historical trends and use the Strategy Ideas tool. It can even help you craft an exit strategy when the time comes.
In terms of additional research, Fidelity actually gets its research from over 20 firms, such as Recognia, McLean Capital Management, and Ned Davis. You can even get an aggregate picture from all the data available through Fidelity’s Equity Summary Score on each stock quote page.
Owned by parent company Bank of America, you can actually access all of your accounts from the same login if you’re a B of A customer. This can be a huge draw for some, but just like any other trading platform, Merrill Edge comes with both pros and cons.
Let’s take a look.
First of all, Merrill Edge has excellent customer service and powerful research and trading tools.
Commissions are somewhat high, coming in at $6.95 for stock trades and plus an extra $0.75 per contract for options. They offer 2,000+ NTF mutual funds, but unfortunately, don’t have any commission-free ETFs. This may be a deal-breaker for some traders.
You can, however, qualify for 30 commission-free trades on individual stocks or ETFs each month by meeting a balance minimum. You can qualify if you have at least $25,000 in either a Merrill Edge self-directed account or in a Bank of America cash deposit account.
You will need at least $500 to open up an E-Trade account, but many traders agree that the volume discounts and easy to use platforms are well worth it.
In fact, each of the two platforms appeals to two types of investors: beginners and more seasoned pros. So it’s a great place to start with a bit of cash, which also allows you to take advantage of more sophisticated tools as needed.
But, there is a catch.
In order to upgrade from the basic E-Trade Web platform to the E-Trade Pro platform, you’ll need either a large account or an active trade history.
So you’ll either need a minimum of $250,000 in your account or make 30 or more trades per quarter. If you do make that amount of quarterly trades, you can still qualify for some other benefits as well — including discounted commissions.
Just how much?
For stock trades, your commission per trades will drop from $6.95 to $4.95. For options trading, it’s typically $6.95 plus $0.75 per contract, but for active traders, your fee drops to $0.50.
And while you’ll enjoy 100+ commission-free ETFs and 2,500 no-transaction-fee mutual funds, any others cost $19.99.
Beginners beware: Interactive Brokers is an advanced online broker with a high account minimum to the tune of $10,000 so don’t jump into this one until you’re ready.
But if you’re 25 or younger, you can open an account with just $3,000. Still, you need to know what you’re doing because Interactive Brokers doesn’t house a huge resource pool for beginners.
Unlike most of the other online brokers on this list, Interactive Brokers charges commissions per share rather than per trade. While you can get a volume discount, the standard stock trade costs are $0.005 per share.
There’s a minimum charge of $1, but also a maximum of 0.5% of your trade value. Options trades also carry a $1 minimum and charge $0.70 per contract.
You may also be charged fees for certain situations. If you have an IRA, for example, you’ll be charged a quarterly fee of $7.50. If you’re inactive in your account, you may be charged a fee between $3 and $20.
They have about 30 ETFs to choose from that you won’t pay commissions on. There are, however, almost 3,000 NTF mutual funds available for trading. They do offer forex trading, but you’ll need at least $10 million in assets to access this feature.
How much do online brokerage firms charge?
For active traders who want to minimize costs, an online broker can save you a lot compared to a traditional brokerage. When you go with a full-service brokerage, you’re usually charged a percentage of the trade amount. With a discount brokerage account, you pay a low commission on every trade.
But with an online brokerage account, you typically get charged a flat fee for each trade, which can save you a lot over the long run. Depending on the type of transaction, you can expect to pay anywhere between $5 and $20 per trade.