The Best Online Stock Trading Sites
Latest Update March 15, 2017
- Best for Cheap Trading
- Flat $4.95 Trade Commission
- $0 Account Minimum
- Low Barrier for Discounts and Incentives
Other Top Picks
We tapped into the expertise of two investors — one’s a former day trader, the other a financial commentator with 20 years of trading experience — to analyze the pricing structures of 13 of the best online stock trading sites. To find our top picks, we dug into each broker’s research and tools, and took their platforms for a spin to find which one is best for different types of investors and strategies.
The 5 Best Online Stock Trading Sites
Best for Cheap Trading: Ally Invest
Ally Invest leads the industry in low-cost commissions structure for all kinds of investors, from high-net-worth individuals to beginning buy-and-hold traders. Even though a rash of brokers dropped their commissions in 2017 to be competitive with Ally Invest’s $4.95 flat rate, it keeps its edge with a zero account minimum and enticing discount for active investors –– equity trades drop to $3.95 for users with 30+ trades each quarter or a balance of $100,00. While cheaper trades can still be found (Robinhood’s mobile platform boasts totally commission-free stocks and ETFs, for example), Ally Invest’s platform and resources stand out with quality research and tools, including access to its online trader network.
Best for Beginners: E*Trade
If you’re looking for something with an easy learning curve, but endless of room to grow, we recommend E*Trade. Its learning center is filled with educational videos, articles, and webinars to guide your through the basics. From there, you can stay up to date on investing news, reports, and commentary from their team of market analysts. Branch appointments are free to book, and online chat tools and 24-hour hotline are there to guide you from anywhere in the world. If you’re looking to expand your investing over time, E*Trade is equipped to handle everything from entry-level IRAs to aggressive trading of stocks and options.
Best Platform: TD Ameritrade
TD Ameritrade offers two best-in-class platforms, designed for two types of investors. Trade Architect is good for beginners, or anyone who prefers a simplified, educational interface that can walk them through the ordering process and explain potential strategies. Thinkorswim, on the other hand, is a powerhouse designed for advanced investors. This platform regularly racks up praise and awards and offers superior tools and features — including research reports, real-time data, charts, and technical studies. Both platforms are free to use for any investor with a TD Ameritrade account, which for many investors makes the $6.95 commission worth it.
Best for Active Traders: OptionsHouse
OptionsHouse is a top platform for investors with an options focus — but it’s the hands-down winner for active traders. Like Ally Invest, it’s been a longtime leader in rock-bottom pricing, with a flat $4.95 trade commission ($4.95 plus $0.50 per options contract) and, unlike many brokerages catering to active investors, no account minimums or inactivity fees. It’s also a standout with a streamlined interface and smart tools. It doesn’t offer currency trading, and has limited commission-free and transaction-free offerings, but its 2016 acquisition by E*Trade should help fill in those gaps as the two brokers continue merge.
Best Research & Tools: Fidelity
Fidelity wins for its quantity and quality of trading and investing research — ideal for the DIY investor looking to unleash their potential. Featuring research from more than 20 providers, plus stellar execution, it’s no surprise Fidelity was awarded best overall online stock broker in 2016 by both Barron’s and Kiplinger. And Fidelity shows no signs of slowing down. In early 2017, Fidelity lowered its commissions from $7.95 to $4.95, a sign that it’s looking to become a bigger player in the discount scene, as opposed to the high net-worth individuals it historically has catered to. It still reserves some of its tools and features for high-volume, active traders, but looking forward, Fidelity is going to get harder and harder to beat.
How We Found the Best Online Stock Trading Sites
It’s a tumultuous time for online stock brokers. The players have largely remained the same, but between significant cuts in commissions and a few major acquisitions (E*Trade acquired OptionsHouse; TD Ameritrade and Scottrade merged; Ally Invest now lives under Ally Bank), the competition is fierce.
This is all to say there is no one best online stock broker, but each one has different strengths and weaknesses. Our mission is to spotlight those, and help you find the best one for your investing style.
We leveraged the expertise of two stock traders — a former day trader and a financial commentator who has been trading for over 20 years — to dig into 13 of the most popular online stock trading sites.
Different investors are going to prioritize different things — a day trader, for example, requires speed and flexibility; whereas a beginning trader may value educational resources and customer support. But one thing every trader should care about is cost, so we spent a lot of time balancing price with what each site offered. A few of the fees we analyzed include:
Cost per transaction: Commissions are typically an investor’s biggest cost base. In 2016, a typical unassisted transaction fee averaged about $8, but early 2017 saw a slew of brokers decrease their commission, including Fidelity, E*Trade, and TD Ameritrade. Now, many trade for as low as $4.95, which is where, historically, only a few brokers, like Ally Invest and OptionsHouse, operated. No matter what the price, though, transparency is key. We wanted to see affordable pricing structures that were locked in for the long haul.
We also took note of new customer promotions, where brokers give you a chunk of free trades, usually based on how much you deposit. Promotions change regularly, but they can be a good indicator of the type of investor a broker is a good fit for. (Ally Invest, for example, offers incentives for deposits as low as $500, whereas Fidelity Investments has a higher barrier for entry — a $50,000 deposit to get 300 free trades.) Another thing we compared: how many commission-free ETFs a broker offered.
Account minimums: Seeing your nest egg shrink due to a tough market or bad strategy isn’t fun. It’s worse if you’re also getting dinged by your broker’s minimum account balance requirement.
Charges for data, research, and tools: All the best online stock trading sites have quality market data like real-time quotes, educational resources, and stock-screening tools built right into their platforms. But some, like Fidelity and TD Ameritrade, stand out for also providing top-shelf resources, totally free of charge.
Extra costs: There are lots of brokers that boast having financial experts on-call 24 hours a day to help you make a trade, but don’t tell you those services come with additional fees. (Executing a trade over the phone, for example, can increase an $8 commission fee to $25 or more.) Some platforms do offer free education on sophisticated strategies like options and futures, but require an upgraded platform with an annual fee.
There are plenty of additional fees that may crop up along the way (we discuss some of the more common ones here), but for pretty much every investor, cheaper will always be better. Depending on your strategy — trading on margin, for example — increased fees might just be the cost of doing business, but we looked to mitigate these costs in our top picks.
Alongside cost, we also valued educational resources, reports and tools, and the usability of the platform itself. Our expert users took each broker for a test-drive and weighed in on standout features. We also took ratings from investment publications like Barron’s and Kiplinger into account.