If you’ve never traded stocks before, you might imagine trading to be like the old cliché: dozens of brokers in suits yelling at clients over the phone. It may be difficult to picture yourself in the chaos, especially if you’re a beginner.
Online stock trading removes you from the scene. You don’t have to deal with phone calls, broken promises and mayhem. Instead, you can trade from the comfort of your own home or on-the-go.
Like many other industries, brokerages anticipated the need for great online experiences and delivery. Firms created desktop platforms and mobile experiences with built-in trading tools, educational resources, and analytics all at your fingertips. Compare the top online brokers to find your platform and open a brokerage account today.
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- securely through Forex.com's websiteBest For:Forex Trading
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- securely through IG Markets's websiteBest For:Forex Execution
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose.
- Disclaimer: 84% of retail CFD accounts lose money.Best For:Market-Leading Spreads
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- securely through Revolut's websiteBest For:Global ConsumersRating:
What is Online Stock Trading?
With online stock trading, you’re able to buy and sell securities over an online platform. It takes the place of the traditional method of making phone calls. There are 3 types of brokerage accounts.
The 1st is a full-service brokerage, which provides comprehensive services, tips, and education. A beginner may want to choose this. The 2nd is a discount brokerage. They provide their services for a lower fee but do not provide advice or research. At times, there are hybrids that might tickle your fancy. eToro offers crypto, stocks and ETFs, zero commissions and a multitude of information. In short, you don’t need to settle for a broker that offers low fees and no information when, clearly, there are better alternatives.
The last is robo advisors. Robo advisors collect client information and make trades based on algorithms. They’re usually inexpensive but will lack the personalized service of other brokers. These brokerages provide services on the web and mobile applications.
Online Broker Reviews
Why Should I Trade Stocks Online?
Whether you’re just starting to trade or thinking of making the switch to an online brokerage, there are a few things you should know.
- Online platforms normally have lower fees than brick-and-mortar brokerages. This is because operating online only saves the brokerage both time and money. These savings are passed on to the traders through low or no fees commissions.
- Access to the latest trading news and trends. So, you won’t have to pay for another news subscription service. Education can come in the form of live news alerts, weekly news roundups, and more intensive trading guides. Brokerage firms also integrate this information into their platforms, providing a seamless trading experience.
- Because all of the trades happen online, they happen instantly instead of taking minutes. Over time, instant trades can make a huge impact on your portfolio, especially when trading volatile stocks.
But, if you have a great relationship with your current brokerage or are new to trading and want a more personal relationship with your broker, it may not be worth it to make the switch.
Who Trades Stocks Online?
Anyone from beginning traders to seasoned investors trades stocks online. With the recent improvements in online brokerage technology and lower fees, making the switch to online trading is easy. It can save money and time.
But online stock trading might not be right for everyone. While it’s true that you can make money trading online, you have to be willing to put in the work. It isn’t a get rich quick scheme; you have complete control of your success. If you’re not willing to put in the research, time, and money, you won’t see a return on your investments.
How to Start Trading Stocks Online
First, you’ll have to choose a brokerage. You’ll have to consider the following:
Self-Managed vs. Advisor-Managed
If you want your account self-managed or managed by an advisor. If you’re confident in trading, a self-managed account is worth the savings. If not, you’ll want an advisor. You will pay more in fees, but it may pay off if you have a great advisor.
Types of Securities You’ll Be Trading
Commissions and Fees
How much are you willing to pay? Many online platforms will have low fees, but you’ll need to do the math before you start trading, especially if you can’t commit a lot of money to stock trading. Consider annual fees, discounts for balances, and fees per share.
Brokerage Account Minimums
Some brokerages offer $0 minimums. Others may have higher account minimums, but more perks. If the brokerage does have account minimums, make sure to look into any penalties.
Market Data Needed
Certain brokerages will offer platforms with market data fully integrated into their user experience. Whether you’re a beginner or advanced trader, this may be crucial to your success.
Platform You See Yourself Trading On
At the minimum, brokerages offer access to a desktop platform. Most offer a mobile application. Some platforms are designed better than others, though. Watch out for reviews of clunky, slow, and hard-to-use platforms.
24/7 live customer support is the gold standard. Look out for supports via email and live chat as well.
Brokerage Account Opening
Once you choose a brokerage, you can usually sign up for an account online. You’ll need to collect a few things 1st:
- Social Security Number
- Taxpayer Identification Number
- Foreign tax ID, passport or visa number if you aren’t a U.S. citizen or permanent resident
- Proof of identity
- Your employer’s information
- Method of funding your account
Now you’re ready to go! You should be able to sign up through the brokerage’s online portal. Depending on the online brokerage, you may even be able to start trading on the same day.
Creating a Wealth Strategy with the Best Stock Brokers
Online stock trading makes investing accessible to the masses. Brokerages provide low-to-no fees, user-friendly online brokerage platforms, and educational content to make trading simple – even for the beginning investor. But you still have to work hard, do your research, spend money, and be willing to put in the time to see a return on your investments.
Frequently Asked Questions
Who are the top 3 investment brokers?
Three of the best investment brokers include Interactive Brokers, Charles Schwab and eToro.
What is the safest online stock broker?
When researching online stock brokers, safety is a top priority. The best and safest online stock broker will depend on the individual investor’s needs. To ensure safety, it is important to research brokers to make sure they have a good track record, a good financial standing, are registered with the appropriate regulatory bodies, and offer safe methods of transferring funds.
Which online broker has lowest fees?
Interactive Brokers, Webull and Fidelity all offer brokerage accounts with low fees.