Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out on a trading floor. You've probably seen pictures of a trading floor, in which traders are wildly throwing their arms up, waving, yelling, and signaling to each other. The other type of exchange is virtual, composed of a network of computers where trades are made electronically.
There is no single best online broker for stock trading. But among the dozens of financial firms vying for your investing dollars will be one that’s best for you.
Are you just starting out and looking for a friendly place to learn the ropes? Really into trading options and futures? Seeking access to sophisticated investing research? A cost-conscious frequent trader?
Below are the brokers that earned NerdWallet’s highest marks based on the breadth and quality of their offerings in the areas that matter most to individual investors. To find a suitable online broker, read on for highlights (and links to our in-depth reviews on each).
Best Stock Brokers
Having the best stock broker to serve 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? To keep it simple, look for brokers that offer 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 stock broker should offer access to a wide variety of trade tools to help make the most of each and every trade. From real-time streaming quotes to last sale tickers, quality stock scanners, mobile trading apps, and level II quotes to name a few. Strong 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 (not common in 2017 but several brokers do still have them), transfer fees, and yearly IRA fees for having a retirement account. While over time most brokers have evolved to exclude many predatory fees, it’s still important to do your due diligence. Just like a bank account, stock brokers also make a portion of their profits off miscellaneous fees.
6. Market Research
A good online broker will provide a variety of free market research tools. The rule of thumb here is simple: the more you pay per trade, the better the market research (both fundamental and technical) provided.
7. Investment Options
A online stock broker should offer access to not only trading stocks, but also a strong selection of no load mutual funds, ETFs, and complex options. Nearly all of the large brokers offer commission free ETFs as well. Other unique investment offerings to look for could include direct market routing, conditional orders, futures trading and forex trading.
8. Retirement Accounts
Funding a IRA, Roth IRA, or other retirement account with no annual fees is an extra perk many online brokers offer. There is no reason why you should pay an annual fee to have an retirement account. If managing your own portfolio is not of interest, all of the large full-service brokers offer optional advisory services as well. Once again, the experience at larger established brokers is going to be superior to smaller brokers.
Larger online brokers offer banking and other financial services. This goes beyond money market accounts and CDs. Checking accounts, mortgages, debit cards, credit cards, and the like can also be offered. The leader in this space is, hands down, Merrill Edge.
10. Account Security
Because of the web today, all online brokers invest heavily into account security. Security questions, SSL websites, and the like are used by most brokers. Just like shopping online and choosing a trustworthy website to purchase from, the best bet is to choose a well-known, established broker for your portfolio. At the least, make sure they are members of FINRA and SIPC.
11. Speed & Order 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, saving a penny per share on a 100 shares order isn’t the end of the world, but for active traders it is something to look into. To understand Order Execution, read this guide.
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’s a good list of international brokers to start with.
Stock Brokers in United States
29 S LaSalle St, Lobby A
1st Discount Brokerage
8927 Hypoluxo Road
Suite A-5, Lake Worth, FL 33467
One Pickwick Plaza
Phone:+1 (312) 542 6901
American Century Investments
PO Box 419200
Kansas City, MO, 64141
2923 Ameriprise Financial Center H26/2923
Minneapolis, United States
1340 Inverness Corners Birmingham, AL 35242
Birmingham, United States
141 West Jackson Boulevard
Chicago, 60604, United States
Phone:+1 (312) 291-2990
Bank of Oklahoma
BB&T Investment Services, Inc.
200 S. College St., 8th Floor
Charlotte, United States