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Best Online Stock Trading Platforms
Updated on: September 2022
Best Customer Care
- Extensive, clear research
- Online and in-person service
- Fractional share buying
Best For Beginners
- 24/7 support
- Online and in-person education
- Wide range of investment options
Best For Hands-Off Investing
- Auto rebalancing
- Socially responsible portfolio option
- Tax-loss harvesting
If you’re looking for new ways to invest and diversify your portfolio, it may be time to give online stock trading a closer look. Today, it’s one of the most popular ways to trade, and for very good reason. Online stock trading platforms bring three key advantages: freedom of choice, low costs, and speed.
Today’s platforms and apps make it easy, which is why it’s a perfect option for first-time traders (and seasoned traders, too). The key, however, is choosing the best online stock trading platform for you, so that your money goes the distance easily and quickly.
There are several excellent, reputable online stock trading platforms in operation today and they all approach trading a little differently, which we outline below.
Top 5 Online Stock Trading Platforms
- Best Customer Care: Fidelity Investments
- Best For Beginners: TD Ameritrade
- Best For Trading Variety: E*Trade
- Best For Hands-Off Investing: Wealthfront
- Best Streamlined Option: SoFi Invest
|Brand||Account Minimum||Mobile App||Fractional Share Trading||FDIC Insured||SPIC||FINRA|
How Does Online Stock Trading Work?
When you trade stocks using a brokerage firm, your broker technically makes the trade since they’re licensed and have direct access to the securities market. When you trade online, however, there’s one major difference: the platform you choose trades on your behalf, rather than a broker. This allows for more autonomy and flexibility as an investor.
Once you place an order on the stock markets, ready to trade, you’ll be matched with several real-time trade options. After you select your option, you’ll make or collect your payment. Once the transaction has cleared, the trade is finalized. All of this takes a matter of minutes, if not seconds.
Not sure you’re ready to start trading stock online? Most platforms offer trade simulators where you can practice until you feel confident that you’re ready to start trading.
What to look for in an online stock trading platform
The list of online stock trading platforms seems to get longer every day. With so many to choose from now, it can be difficult to know which one is the best platform for you, especially if you’re new to online trading. While all platforms vary to some extent, the one you choose should first and foremost value your security above everything else.
Always look for these criteria when choosing an online stock trading platform. They should:
- Be members of SIPC, FINRA or another authorized regulatory body
- Insured and offer protection against fraud
- Include a guarantee to keep your personal information secure by encrypting all data
It’s also a good idea to read reviews on reputable review sites by clients who have traded on the platform you’re interested in. Read all comments carefully and choose a platform with consistent, positive reviews.
You should also look for a platform that’s known for its excellent customer service, and that charges a low commission fee or, even better, offers zero fee trading and transactions.
Best Online Stock Trading Platforms of 2022
- $0 commission trades
- Online and in-person customer service
- Fractional share buying
- Does not offer futures, commodities, or cryptocurrencies
Fidelity was one of the first brokerage firms in the U.S. to offer a robust, comprehensive online stock trading program for new and existing clients. Their services are generally low cost, and they don’t charge for overflow, unlike some other online trading platforms.
Additionally, Fidelity earns high marks for exceptional customer service and features a very easy to navigate app, making it an excellent option for those who are newer to trading. Note, however, that Fidelity’s broker-assisted trade fees are relatively high, which is something to keep in mind if you’re planning to work directly with one of their brokers.
- Commission-free trades
- Wealth of online and in-person education
- Wide range of investment options
- Thinkorswim platform offers advanced tools
- Does not offer fractional shares
If you’ve never traded stocks online before, you’ll want to give TD Ameritrade a closer look. Widely regarded as one of the best online stock trading platforms for beginners, TD Ameritrade offers multiple resources, learning tools, and support for clients. The app is also easy to navigate and features a dashboard so clients can access account information quickly.
TD Ameritrade offers a variety of investment products including stocks, options, ETFs, mutual funds, futures, and more. Consequently, the volume of information and ways to trade can be overwhelming and make it tough to know where to start, particularly for new investors.
- Multiple trading platforms and apps
- Deep history in online trading
- Automated robo-investor option
- Limited access to fractional share purchases
ETrade was one of the first online stock trading platforms; it’s origins date back to the CompuServe network. Novice investors will appreciate ETrade’s easy-to-navigate mobile app and platform that takes the guess work out of trading by offering real-time quotes and up-to-the-minute news about the market. Its Power ETrade platform is excellent for more advanced traders who want to see technical studies and learn more ways to build their portfolio.
ETrade offers commission-free stock and ETF trades. Money transfers are limited to bank transfers, it doesn’t accept credit/debit cards or electronic wallets.
- Tax-loss harvesting
- Robust goal-planning tools
- Access to cryptocurrency funds
- Limited access to live help
Recently acquired by UBS group, Wealthfront is in the category of robo-advisors, where investment management happens via computer algorithms. This makes it a solid choice for hands-off portfolios and diversified investment options.
To begin, Wealthfront will ask you to complete a short questionnaire to identify your risk tolerance, then will present investment options for you to consider. Portfolios can be customized by adding ETF holdings and Wealthfront offers 529 college saving plans. However, since Wealthfront really excels in hands-off trading, it isn’t as customizable as and there is limited access to advisors.
- Simple tools and interface
- Suitable for beginner stock and ETF investors
- Free custom advice from non-commissioned employees
- Minimal track record
Looking for an online stock trading platform that offers extremely fast trading and is completely digital? If so, SoFi (that stands for “social finance”) may be a great option for you. SoFi makes it very easy to get started. In fact, sign up takes a matter for minutes. It also earns high marks for customer service and technical support.
SoFi Invest offers commission-free stock and ETF trading with no withdrawal or inactivity fees, making it a great option for investors who want to stick with simple stock trading. But this is also its downside. The portfolio is limited to stocks, ETFs and cryptocurrencies. It’s also only open for US stock trading and to US residents.
The Benefits of Online Stock Trading
Online trading gives you more freedom to invest how you want to because you won’t be relying on broker. Online stock trading is usually less expensive than traditional trading methods, and it happens faster than a New York Stock Exchange minute.
Technology has made trading more convenient, accessible, and simpler. Now investing is a smart option for more people than ever before, and especially for those who are retired. Beyond having the option to trade stock at your fingertips, 24/7, 365 days a year, here’s four more benefits of online trading.
It’s less expensive. One of the biggest reasons to consider online stock trading is to save money on transaction fees and to avoid the high costs that come with working directly with a traditional brokerage firm. Online stock trading platforms typically charge a very modest fee (between $5-$10) to buy and sell stocks and are transparent about their costs, so you won’t be surprised.
It’s fast. Time plays a huge role in stock trading. With online platforms, you can buy and sell stock at a click of a button. Alternatively, when working with a brick-and-mortar brokerage firm you’ll have to call or email your broker and wait for their response to begin trading. So, if you want to be able to trade stocks at any time of the day or night, you’ll want to give online trading platforms closer look.
You’ll have plenty of guidance. When you sign up with an online trading platform, you’ll gain access to educational tools to help you choose the best stocks to purchase, and guidance on how to invest wisely. Many platforms are operated by leaders in the financial field and feature sound advice, the latest news on investing, and ways to optimize your trading.
There’s less risk of bias. Online trading puts you in control. When you invest with the help of a broker, on the other hand, you may be apt to take their lead, and invest in stocks that appeal to them and that don’t necessarily benefit you. Brokers sometimes convince clients to invest in mutual funds or other products or service so they can earn a commission. Online stock trading eliminates this risk.
Ready to buy and sell stocks online?
The stock market has certainly come a long way from the days of frenzied trading on the floor of the New York Stock Exchange. Wall Street still exists, of course, but today it’s grown beyond brick-and-mortar brokerage firms now that technology lies at the intersection.
Knowing what to look for when choosing an online trading platform, and understanding which platform is best for you is key. Once you decide, you can buy and sell stocks from your kitchen table or while lounging by the pool, with the tap of the mouse or the click of a button, confident that you’re making sound investments for your future.
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