Investors should know the best online stock brokers to trade with. The following top online brokers offer investors the most value for their portfolios. Some online stock brokers are known for their award winning customer service while others are known for inexpensive stock trades or powerful trading tools. This guide will highlight some of the best stock brokers available today with tips and advice for selecting a new broker.
1. TD Ameritrade
TD Ameritrade was ranked #1 Online Broker 2013 by StockBrokers.com. Its platforms thinkorswims (desktop) and Trade Architect (web) are not only easy to use, but also loaded with great tools and features. thinkorswim was ranked "#1 Desktop Platform", then add to that TD Ameritrade's education and robust research, and it is a win. Trades are $9.99 like ETRADE below, but simply put, what you pay for is what you get.
TD Ameritrade Offer: Trade free for 60 days + Get up to $600 with any new account.
ETRADE shines for its ease of use, platforms & tools, and its top notch mobile offering. The broker's customizable client dashboard, ETRADE 360, won "Best Client Dashboard" and ETRADE Mobile was rated "#1 Smartphone App" in the StockBrokers.com 2013 Broker Review*. The broker, known for its baby commercials, also offers investment guidance with professional representatives.
ETRADE Offer: Trade free for 60 days (500 free trades max) + Get up to $600 with any new account.
OptionsHouse was rated #1 for Options Trading in the StockBrokers.com 2013 Broker Review*. OptionsHouse offers $3.95 flat fee trades alongside two flexible rates for options trading: up to 5 contracts for $5 or $8.95 + $.15 per contract. Their web based platform is also known for its ease of use which makes for easy trading.
OptionsHouse Offer: Trade free for 60 days with any new account.
TradeKing merged with Zecco in late 2012 and offers investors great customer service, competitive trade commissions, quality research, and is home to the Trader Network with thousands of investors all sharing trade ideas, research, and market analysis.
TradeKing Offer: Switch to TradeKing and get up to $150 in transfer fees reimbursed.
OptionsXpress is not the least expensive for options trading, but is known for its all-in-one trade ticket, variety of tools for options traders, strong mobile trading platform, and quality customer service. In fact, the broker was acquired by Charles Schwab in 2011, so investors can expect positive synergies in the future.
OptionsXpress Offer: Receive $100 Cash with any new account.
Tips for Comparing Brokers
When choosing your online broker, here are some great tips to remember to help you decide:
1. Narrow down a list of what is most important to you - Just like when shopping for a new home, making a focus list of wants will help you separate choices to ultimately make a decision. For an investor that travels often for example, mobile trading will be more important than the cost of placing trades.
2. Choose a broker with high acclaim and that is well known - Larger, established online brokers almost always offer more features, trade tools, better customer service, etc. Some brokers have millions of clients and these are the ones that almost always deliver a high quality experience for clients.
3. Be aware of miscellaneous fees - Be conscious of what fees the broker is charging. I do not recommend any smaller brokers on this site specifically for this reason. There are usually many hidden fees that are only found by digging through the broker website. To see what extra fees brokers charge, I recommend reading through the stock broker reviews on StockBrokers.com: Etrade Review, TD Ameritrade Review, TradeKing Review, OptionsHouse Review, optionsXpress Review.
Stock Broker Comparison Chart
The following chart compares Etrade vs TD Ameritrade vs TradeKing vs OptionsHouse vs Scottrade.
Full Broker Chart
Compare online brokers also with the comparison chart here on StockTradingToGo that includes 9 online brokers. All the online stock brokers and discount stock brokers mentioned above are featured.
There are star ratings, pricing and fees information as well as a features overview section to see every broker's latest promotional offer.
Finding the Best Online Broker
Having the best online broker to serves individual needs is very important for any investor. For example, cheap trades most often come at the expense of less research tools and a more simplified trade platform. Consider these 12 key factors to help compare all stock brokers and ultimately find the best broker to suite your needs.
1. Trade Commissions
What does it cost to buy shares of stock? Does the fee change based on the type of order or size of order? The best any investor can get from a broker are what are known as flat-fee trades, ie charging a flat rate regardless of the type, price of the stock, or size of the order.
2. Customer Service
When picking up the phone or emailing a broker, is a well trained customer service representative ready to assist? How any investor is treated as a client is more important to some than others. But, even for those that don't rely on customer support that often, to know that they have award winning service there when they need it is comforting.
3. Trading Tools
Trading successfully is a lot easier when investors have great tools at their disposal. A top online broker should offer access to a wide variety of trade tools to help make the most of each and every trade. From real time streamers to last sale tickers, live news feeds, mobile trading and for some even level II quotes. Strong trade tools are essential for active investors.
4. Account Minimums
Some brokers allow you to open an account with no minimum deposit while others may require several thousand dollars. Also know that some brokers require higher minimums to gain access to premium platforms, functionality, and personalized support.
5. Other Fees
Fees beyond trade commissions include inactivity fees, transfer fees, and yearly IRA fees for having a retirement account. While over time most brokers have grown to exclude many fees, it is still important to understand as every broker is different. Just like a bank account, stock brokers also make a portion of their profits of extra service fees.
6. Market Research
A good online broker will provide a variety of both free and paid market research tools. More often than not, the more you pay per trade the better the access to market research. Etrade and TD Ameritrade for example provide fantastic access to research.
7. Investment Options
A online stock broker should offer access to not only trading stocks, but also mutual funds, ETFs, and options. Most brokers offer these investment types but some niche brokers do not. This can also expand out to include even forex and futures trading which brokers like OptionsXpress and MB Trading both offer.
8. Retirement Accounts
Funding a 401k, Roth IRA or other retirement account is an extra plus that many online brokers offer. Most brokers will go out of their way to try and market retirement accounts to their clients with convenient features like one click access between accounts. Make sure to watch out though for the yearly fees that some brokers charge, typically around $35 per year, per retirement account.
The emerging trend for the larger online brokers is to offer banking and other financial services. This goes beyond money market accounts and CDs. Checking accounts and even credit cards are also sometimes offered.
10. Account Security
Because of the web, online brokers the best online brokers invest heavily into account security. Security questions, PINs, and the like are used by most brokers. Just like shopping online and choosing a trustworthy website to purchase from, the best bet with your broker is almost always to choose a well known, established broker for your portfolio.
11. Speed & Execution
For the active trader execution speed and fill price are very important. I won't get too in depth here but I have tested many of these brokers and there can be noticeable differences in trade execution times and quality. For the majority of investors this mili seconds of time or saving a penny per share on an order isn't the end of the world, but for active traders it is something to consider.
12. International Trading
For investors in the United States this is not a problem but for investors living outside the US, when comparing brokers it is important to make sure they offer service in your country.
Here is a quick list of online broker offers and promotions currently available for 2013:
- TD Ameritrade Offer: Trade free for 60 days + Get up to $600 with any new account. Redeem now.
- ETRADE Offer: Trade free for 60 days (500 free trades max) + Get up to $600 with any new account. Redeem now.
- OptionsHouse Offer: Trade free for 60 days with any new account. Redeem now.
- TradeKing Offer: Switch to TradeKing and get up to $150 in transfer fees reimbursed. Redeem now.
- OptionsXpress Offer: Receive $100 Cash with any new account. Redeem now.
Questions & Help Choosing a Broker
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This guide was written by 2013-06-14.and was last updated on
* - The StockBrokers.com 2013 brokerage review included 17 brokers with ratings in eight area: commissions & fees, ease of use, platforms & tools, research, customer service, offering of investments, investor education, and mobile trading.
TD Ameritrade, Inc. and Reink Media Group LLC are separate, unaffiliated companies and are not responsible for each other's services and products.