Optimising trades with the best online brokers
Trading tools, low fees, and top-tier insights. We compare and contrast the best online brokerage firms so that you can trade at your best straight from the web.
The Increasing Adoption of Online Trading
Not so long ago, stock market trading was exclusive to those with high amounts of wealth and access to a registered broker. Online trading platforms have broken down this barrier and have made trading accessible to retail investors with smaller amounts of capital. The markets have now become possible to trade for anyone with access to a web browser or mobile. However, choosing the right online brokerage account is no easy decision to make. Factors such as trading tools, fees, and requirements to open account are all important considerations for traders to take into account. Balancing these along with comparing and contrasting between different brokers is no easy task. That’s why we have compiled a list of the top online brokers for you to consider before you venture into the world of online trading.
What are the best online brokers and why?
We compared and contrasted the best online brokers available to traders today. After our analysis, the three which made it to the top of our list were Interactive Brokers, Firstrade Securities, and TradeStation. The factors that made these companies the top considerations were the following:
- Regulated by stringent governmental bodies such as FINRA
- Highly competitive on fees
- Provide a wide variety of trading tools
- Provide access to a wide variety of markets
- Provide traders with small amounts of capital a fair opportunity to get involved in the markets
- Focus on educational tools
- Top tier customer service
- Accessible in a large number of countries globally
Interactive Brokers is one of the online trading brokers with the longest history of operating. The company was founded in 1977, far predating the rise in popularity of online trading. The company originated as a group of market makers trading on the American Stock Exchange (AMEX) and gradually developed into the largest electronic brokerage in terms of daily average revenue trades today. The company is now publicly listed after completing its IPO in 2007. The company complies with the rules of numerous regulatory bodies including the SEC, CFTC, and FINRA. The brokerage services are available in 31 countries globally. Interactive Brokers offers a wide variety of markets to clients which are typically expected from a high-quality online brokerage. This includes access to stocks, options, futures, forex, metals, bonds, ETFs, mutual funds, and CFDs. Interactive Brokers also facilitates access to markets which are not traditionally accessible through online brokerages. This includes both hedge fund investing for accredited investors and asset management portfolios with a mix of both passive and active options. In terms of fees, Interactive Brokers prides itself in competing with major brokerages such as E-Trade, Charles Schwab, and TD Ameritrade by charging significantly lower commissions. The trading platforms provided by Interactive Brokers are available on the web, desktop, and mobile. The trading tools provided include technical analysis software, an order book, and an interface which makes it easy for traders to speculate in several markets at once. News flow can also be integrated with the platform so that traders can monitor ongoing developments that may affect their positions or provide opportunities. As well as provide trading tools across a wide variety of markets, Interactive Brokers has a big emphasis on providing educational resources to traders. There is a wide variety of webinars and courses that traders can access on the platform. Interactive Brokers is considered the top online broker by a variety of traders and professionals. It ticks a lot of the important considerations for traders including competitive fees, a trading platform with a wide variety of tools, and accessibility on a number of platforms.
Firstrade Securities is a private online brokerage founded in 1986. The brokerage is FINRA-approved and is registered with the SEC. Firstrade is similar to Interactive Brokers in the manner that it prides itself in competing with large brokerages in terms of fees. Firstrade is considered a discount broker. There are numerous different types of accounts that Firstrade offer. Some examples of accounts include accounts for businesses, accounts for retirement, and custodial accounts for children where the funds are locked until the child reaches a certain age. Firstrade also offers all of its services in Chinese in both Cantonese and Mandarin. Firstrade facilitates trading in all of the major markets that would be expected to be provided for by online brokers. This includes stocks, ETFs, options, mutual funds, and bonds. Trading is supported on the web and also on iPhone and Android. Firstrade also provides a deeper suite of analytical tools for professional traders. Firstrade also has a section on their website dedicated to educating the user. This includes resources delving into concepts related to each of the markets Firstrade offers such as ETFs, stocks, and bonds. There are also resources to help users understand concepts which can often cause confusion such as margin and there is a glossary to help break down some of the jargon which can circulate in the world of trading.
TradeStation is another online broker competing intensely in terms of fees. The company was initially founded in 1982 and has been trading publicly since completing its IPO in 1997. The company is also regulated by FINRA. TradeStation provides access to the main markets including stocks, bonds, mutual funds, ETFs, options, and futures. The company is also setting up to provide instruments related to cryptocurrencies. There are a number of different accounts available to users to set up. Some of these include individual accounts, joint accounts, and custodial accounts. It is also possible for institutions to set up accounts with TradeStation. The TradeStation trading platforms are accessible on desktop, mobile, and web-browser. If users do not have access to their desktop, they can easily access their account via the web version. The trading tools available include technical analysis charts and tools, real-time quotes, and an easy interface to place orders and make trades. Similar to both Interactive Brokers and Firstrade Securities, TradeStation also has educational resources available to users. This includes analysts covering the market and guides on how to use the different tools and technology provided by TradeStation. TradeStation also has an API available for developers who wish to build trading applications on top of the trading platforms.
Opting for Online Trading?
The proliferation of services transitioning online has democratized trading. Discount brokers now make trading accessible to even investors with small amounts of money to invest and trade with. However, this capability also comes with responsibility. By investing recklessly or choosing a subpar online brokerage, traders are putting themselves at huge risk. The services reviewed in this article are considered among the best online brokers because they help traders succeed in multiple ways. They provide important tools as well as educational resources on how to use these tools. The online brokerages covered also do not take advantage of the user in terms of fees. They are highly competitive with the average market fees and position the traders to have the highest chance of succeeding with their platform.