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Best Online Stock Brokers for Stock Trading

Blain Reinkensmeyer

Published by Blain Reinkensmeyer


Monday, February 19th, 2018

IMPORTANT: StockBrokers.com's annual review sets the official industry benchmarks. Our data is used by executive teams, and our ratings are referenced on earnings calls, national TV commercials, US Senate hearings, and throughout the web. We spend more than one thousand hours testing online brokerage accounts every year. Industry leaders trust us because our rigorous testing is totally independent and 100% unbiased.

Choosing an online stock broker is one of the most important decisions you will make as an investor. Every trader has a different investment style of stock and options trading, and the variety of services brokers offer allows individual traders to be highly selective in determining which online broker best fits their needs.

To help stock traders, this guide aims to introduce online trading and offer indispensable advice relating to unique and helpful aspects of these online platforms, the way they function, and how they can best be utilized.

As the head of research here at StockBrokers.com, I have been an online stock trader for over 15 years and have placed several thousand buys and sells over that time. To conduct my testing, I have a funded brokerage account with over a dozen different brokers.

Best Online Brokerages for Trading

Here's a breakdown of some of the best online brokers for stock trading.

Fidelity

Fidelity - Best for Investors
Exclusive Offer: Get 300 commission-free trades and 2 years to use them.

Fidelity Investments charges $4.95 per trade and received 5 stars in our 2018 Review, including being awarded Best in Class for 12 different categories. It is our top recommendation for discount trading. The company also took home the #1 awards for Research, Order Execution, and Ease of Use. Finally, Fidelity’s mobile app was rated Best Mobile App for Investors. Read more...

TD Ameritrade

TD Ameritrade - Best for Traders
Exclusive Offer: Trade free for 90 days + get up to $600 cash.

Rated our #1 online broker for traders in 2018, TD Ameritrade charges $6.95 per trade and offers the largest variety of trading tools through its desktop-based thinkorswim and Mobile Trader platforms. It also ranks #1, alongside its Best in Class rating, for numerous other categories including New Investors, Active Trading, Options Trading, and Customer Service, among others. Read more...

Charles Schwab

Charles Schwab - Best for Retirement

Charles Schwab charges $4.95 per trade and was rated 4.5 Stars Overall, alongside its #1 for Retirement Services and 5 stars for Research. Extensive research access along with consistent customer service, ample tools, the largest selection of commission-free funds, and industry-leading market reports combine to present a great full-service brokerage. Read more...

ETRADE

E*TRADE - Best for Options, Mobile
Current Offer: Trade Free for 60 Days & Get Up to $600.

E*TRADE, with its $6.95 stock trades, finished fourth overall with 4.5 stars in 2018. E*TRADE was awarded 5 stars and #1 for Options Trading, thanks to its OptionsHouse by E*TRADE trading platform. The broker also won first place for Mobile Trading, and offers well-rounded access to quality research, trading tools, education, and more. Read more...

Interactive Brokers

Interactive Brokers - Best for Professionals
Exclusive Offer:Open a new account today to borrow at special margin rates.

Designed for professional traders serious about their craft, Interactive Brokers offers only per-share pricing ($.005 per share with a $1 minimum per trade), and charges up to $20 per month between two minimum activity fees. Traders who can meet its $100,000 minimum deposit for margin trading are rewarded with an industry-leading commissions schedule, margin rates, and full support for international trading. Read more...

Merrill Edge

Merrill Edge - Best Rewards Program
Current Offer: Invest in a new account and get up to $600.

Merrill Edge ($6.95 per trade) was awarded #1 for Banking Services, thanks to its parent company, Bank of America. Not limited to just BofA customers, Merrill Edge's Preferred Rewards program is excellent, offering $0 stock trades among other perks such as bonus rewards on credit cards and discounted mortgage rates. Read more...

TradeStation

TradeStation - Best for Platform Technology
Current Offer: Low Fees and Free Market Data. Trade with TradeStation.

TradeStation's advanced trading platform has been awarded Best Platform Technology for the past five years. For active traders, TradeStation was rated 5 stars and comes packed full of tools and functionality. Trades are just $5 and users can even code their own apps using the broker's proprietary EasyLanguage programming language. Read more...

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Ally Invest

Ally Invest - Best for Ally Banking
Current Offer: Up to $3,500 cash bonus + commission free trades for new accounts.

Ally Invest (previously TradeKing) provides $4.95 trades, and is a simple choice for current customers of Ally who are looking to invest in the stock market. Like Merrill Edge and Capital One Investing, customers can easily manage their banking and brokerage accounts under one login. Read more...

Choosing the Best Online Brokerage

When looking for a new online broker, make sure you meet your most important needs as an investor. Are low-cost trade commissions most important? What about customer service, the trade platform, mobile trading, active trading, or a community to trade alongside? With many brokers specializing in different areas, it is vital to evaluate and compare all the possibilities.

Here is a list of the most important factors to remember when selecting an online brokerage:

  • Trading Costs - When trading stocks online, it is important to understand what the costs are to place buy or sell orders. Most online brokers charge a flat rate to buy and sell. That said, other miscellaneous day trading costs can be incurred for direct routing fees or accessing market data. If you are investing in a retirement account, it is important to avoid choosing a broker that charges annual IRA fees.
  • Trading Tools - One of the most common misconceptions newer investors have is that low trading costs are the most important consideration. This couldn't be further from the truth. Having access to a fully featured desktop-based or web-based trading platform can make a big difference, especially when conducting technical analysis.
  • Investment Products - Are you only trading stocks online, or are you interested in ETFs, mutual funds, options, futures, and forex too? In the United States, different regulations are required for brokers who support more complex asset classes. Beyond trading different assets classes, having access to online banking and advanced order types, such as conditional orders, are also considerations.
  • Mobile Trading - Managing a stock brokerage account on the go is certainly important for traders who travel and frequently use their smartphones. While nearly all online brokerages offer mobile trading apps, not all are created equal. Features can vary dramatically.
  • Customer Service - 24/7 support is important to some investors, while others may just want to use online chat during regular market hours or receive an email back within one business day. Having access to quality customer support can really be the cherry on the top of a great client experience, especially during market crises like a flash crash.
  • Stock Analysis - Conducting fundamental research is critical to successful long-term investing. SEC filings, short interest, corporate debt levels, earnings growth, and more are all examples of important criteria to be investigated during fundamental investment research.
  • Regulation - Stock brokers based in the United States and governed by US law will be regulated by the SEC and must be members of FINRA and SIPC. The easiest way to verify whether your online brokerage is regulated is to scroll to the footer of their homepage and read their disclosures. Using the FINRA broker check tool is another easy way to verify proper compliance.
  • Banking Services - Online brokerage accounts are not limited to just stock trading. Instead, customers can take advantage of banking services offered by full-service brokerages (see the list above for three great examples). Some online brokers offer checking accounts, savings accounts, credit cards, and more with deposits of up to $250,000 backed by the FDIC.
  • Account Security - Fortunately, today’s investors don’t have much to worry about when it comes to account security as long they choose a brokerage that is large, well known, and properly regulated. Reference our list above or below for a sampling. Every website should be secured with SSL encryption, and client data should be stored in secure servers. Dual-factor authentication and Touch ID are other security protocols quickly growing in popularity.
  • Order Execution - It is important to understand how your order is routed and executed. Make no mistake, there is a wide variation between quality execution and poor execution. Unfortunately, most online stock traders can't tell the difference.
  • International Trading - The US stock market is the most respected in the world. If you are living in the US and want to trade internationally, or are living abroad and want to trade stocks online with a US-regulated brokerage, you must do your research beforehand and find a broker that supports your requirements.

Best Trading Tools

Based on 59 different variables, here is a summary of the top five brokers for stock trading tools and trade platforms.

  1. TD Ameritrade - Scored 100%
  2. TradeStation - Scored 93%
  3. Fidelity - Scored 93%
  4. Charles Schwab - Scored 91%
  5. Interactive Brokers - Scored 89%

To trade online successfully, some investors rely purely on their trading tools. Today’s trading platforms are not only web based, but also desktop based, and are becoming increasingly mobile based as well. Advanced charting, options tools, screeners, hotkeys, virtual trading, watch lists, ladders, Level II quotes, and back testing are just a sampling of the functionality brokers make available to their customers.

Over the years, I have learned it is not just the trading tools that separate brokers, but the design, depth, speed, and overall execution of delivering the ultimate trading experience.

Over the years, I have learned it is not just the trading tools that separate brokers, but the design, depth, speed, and overall execution of delivering the ultimate trading experience. This is where brokers such as TD Ameritrade’s thinkorswim and TradeStation really excel. After spending hundreds of hours on both desktop platforms, we give thinkorswim the edge, thanks to its modern feel and outstanding trader tools; however, both platforms execute so well that it truly comes down to personal preference. Die-hard fans exist for both, and either one is a great choice for seasoned active traders.

TD Ameritrade thinkorswim platform

Behind thinkorswim and TradeStation, Fidelity’s Active Trader Pro and Schwab’s StreetSmart Edge are two desktop platforms worth looking at closely. Active Trader Pro and StreetSmart Edge have one distinct advantage over thinkorswim and TradeStation, and that is ease of use. While these platforms do not offer the same depth of trading tools, historical data, chart studies, etc., both are very well designed and user-friendly. In some respects, their balance of power and design make them a better fit for certain traders.

TradeStation desktop platform

Unfortunately, not all active trader platforms are free to use or available to all customers. For example, to gain complete access to Fidelity’s Active Trader Pro offering, 36 trades or more must be placed in a rolling 12-month period. Similarly, E*TRADE Pro requires at least 30 trades per quarter or $250,000 in assets. Finally, Lightspeed charges $100 per month for access to its flagship platforms if certain minimums are not met. Platform fees and minimums are set in place to control costs, and while these serve simply as examples, investors should be aware of them if they are considering an online broker based solely on its platform.

Fidelity Active Trader Pro platform

Investors who prefer a web-focused experience have a choice of many great browser-based platforms. Our top pick again this year, OptionsHouse by E*TRADE, combines the best of both worlds: ease of use with fantastic trading tools. The platform is just “ok” for equities trading, but is terrific for options trading. See: Best Brokers for Options Trading.

optionshouse option snapshotanalysis

Ultimately, TD Ameritrade takes the overall No. 1 spot for Platforms and Tools because it offers investors fantastic trading experiences on desktop and on browsers. Trade Architect (browser) appeals to newer and intermediate investors, while thinkorswim (desktop) is built solely for seasoned active traders. The icing on the cake? Both platforms require no minimums or fees for access and use. All customers have access.

TD Ameritrade Trade Architect

Before selecting a broker based on its platforms and tools, take time to read our online broker reviews, narrow your search to two or three brokers, compare their offerings, then make a decision. Start with questions like: What specific trader tools must I have to trade successfully? Will I reach the minimums to maintain fee-less, consistent access throughout the year? Do I prefer a more user-friendly browser-based platform or a more advanced trader-focused desktop platform?

Best for Stock Analysis

Based on 60 different variables, here is a summary of the top five brokers for stock research:

  1. Fidelity - Scored 98%
  2. Charles Schwab - Scored 97%
  3. TD Ameritrade - Scored 97%
  4. E*TRADE - Scored 92%
  5. Merrill Edge - Scored 90%

It is not surprising that the largest, most publicly known online brokers excel, and all vie for the top spot for research. With larger client bases and higher commission costs, high-quality research is expected.

Comparing apples with apples, all five brokers are fairly similar. They all use Morningstar as their primary provider for Exchange Traded Funds (ETF) and mutual fund research, all of them offer a slew of data and graphs for researching stocks, and all offer fixed-income research. Slight differences begin to show only when you assess specifics such as total third-party research reports available for equities, for example Apple (AAPL). In that category, the title goes to Fidelity, with 12 total reports offered, followed by Charles Schwab with eight, and TD Ameritrade with seven.

While any of these brokers will more than satisfy most investors’ appetites, deciding on a winner based on checklists alone is not enough.

While any of these brokers will more than satisfy most investors’ appetites, deciding on a winner based on checklists alone is not enough. Quality and design matter just as much as quantity, not to mention the fact that many brokers will go “above and beyond” to differentiate themselves.

Fidelity, which earned our No. 1 spot again this year, stands out for its 12 equity research reports and fantastic stock comparisons, allowing customers to compare up to five stocks at once with 21 different metrics. Fidelity also distributes high-quality market analysis and personal finance education through its Fidelity Viewpoints weekly distribution. What excites us most about Fidelity is its fully responsive (mobile friendly), carefully laid out research area. Content flow and personalization are at the heart of the experience, which is unlike any other broker in the industry.

Fidelity account stock quote

Charles Schwab, on the other hand, offers customers its own proprietary A – F ratings, called Schwab Equity Ratings, for some 3,000 US stocks. Even more impressive, Schwab boasts a full lineup of 26 in-house experts who provide numerous articles, known as Schwab Insights, on a variety of market topics throughout each week. Some experts, such as Chief Investment Strategist Liz Ann Sonders, can often be seen on TV discussing the market. Schwab also provides the best video experience out of all the brokers, thanks to its market updates and Schwab LIVE events.

Charles Schwab Insights

Not to be outdone, TD Ameritrade won our Best New Tool award in 2017 for the earnings analysis tool offered on its thinkorswim platform. TD Ameritrade also offers what it calls Social Signals analysis for individual equities. Using proprietary algorithms, the Sentiment Score shows what percentage of tweets are positive and displays other relevant metrics. Additionally, in the social realm, TD Ameritrade analyzes data from its six million retail customers to create what it calls the Investor Movement Index (IMX), which displays and analyzes the sentiment of its retail investors’ portfolios.

td ameritrade thinkorswim earnings analysis

All in all, when it comes to researching stocks, ETFs, mutual funds, and fixed income, any top five broker is going to provide an excellent experience for investors. With such similar offerings, it’s the unique experience, features, and functionality that differentiate the brokers.

Best for Investment Products

Based on 40 different variables, here is a summary of the top five brokers for investment products:

  1. Interactive Brokers - Scored 96%
  2. TD Ameritrade - Scored 91%
  3. Charles Schwab - Scored 89%
  4. Fidelity - Scored 88%
  5. E*TRADE - Scored 87%

Investing covers a global spectrum, from investing in international equities to trading forex to purchasing US treasury bonds. To understand the true range of offerings, StockBrokers.com has focused on all the broad investment channels down to the specific order types each broker offers. In the process, we compare 40 different variables.

Starting with the US, services such as complex options trading, fixed income, and direct market routing are all very common. Other services, such as commission-free ETFs, are still growing in the industry. Just 46% of brokers offered commission-free ETFs heading into 2018, with TD Ameritrade leading the way (296). Every broker in the industry supports weekly options, and only four brokers – Capital One Investing, Firstrade, Just2Trade, and Merrill Edge – don’t yet support complex options. On the flip side, only 46% of brokers offer direct market routing for options.

As far as order types go, it is an industry standard to support market orders, limit orders, stop orders, and after-hours trading. Even more advanced order types such as trailing stops, OCO, OTO, OTOCO, and multi-contingent orders are supported by more than half the industry. The least common order type is algo, offered by less than half the industry. The leader overall is Interactive Brokers, which offers customers an arsenal of 63 different order types, some of which are exclusively designed for institutional investors.

Looking at international trading, Fidelity and Interactive Brokers are, by a wide margin, the two best choices.

Looking at international trading, Fidelity and Interactive Brokers are, by a wide margin, the two best choices. Fidelity offers its customers access to trading equities in 25 countries. Interactive Brokers offers less equities support – in “only” 18 different countries; however, all investment types considered, the total comes to 26 countries and over 120 market centers. Both brokers also make it a seamless trading experience, allowing customers to trade from their primary account. Charles Schwab (12 countries in which to access equities) requires a separate account to be opened to place trades.

Plenty of options are available for futures trading, while forex trading is scarcely supported. Just two brokers, TD Ameritrade and Ally Invest, offer forex trading to US customers, and just over half the industry offers futures trading.

All variables considered, Interactive Brokers is the top choice for the largest offering of investments in 2017, earning 96% of the possible points. TD Ameritrade and Charles Schwab follow in second and third places, earning 91% and 89%, respectively.

Best for Banking Services

Based on 13 different variables, here is a summary of the top five brokers for online banking services:

  1. Merrill Edge - Scored 99%
  2. Capital One Investing - Scored 96%
  3. Charles Schwab - Scored 94%
  4. Fidelity - Scored 77%
  5. Ally Invest - Scored 76%

For full-service brokers, the client experience goes beyond just trading. Customers of Merrill Edge, Capital One Investing, Charles Schwab, Ally Invest, and Fidelity all fall under this category, meaning banking services are also offered.

To determine which broker is the best for banking, we dived in head first and explored all the potential services: checking accounts, savings accounts, debit cards, credit cards, and mortgages. We then looked at specialty offerings such as mobile check deposit, debit card ATM fee reimbursement, and no-fee banking. Lastly, the total number of branch offices was factored in, as access to local branch offices is just as important as managing an account online.

It should be no surprise that our #1 choice is Merrill Edge, whose parent company is Bank of America.

It should be no surprise that our #1 choice is Merrill Edge, whose parent company is Bank of America. With a Financial Solutions Advisor (FSA) located in 2,167 out of a total 4,480 locations, Bank of America has, by far, the largest network.

Bank of America really shines with its rewards program, Preferred Rewards, which offers customers with certain account thresholds a range of benefits. The first tier, Gold, requires at least $20,000 in combined assets between Bank of America and Merrill Edge, while the top tier, Platinum Plus, requires at least $100,000 in total assets. Benefits include boosts to money-market savings, credit card cash back bonuses, free trades with Merrill Edge, and more. All in all, there isn’t a better marriage of brokerage and banking than Merrill Edge and Bank of America.

Merrill Edge Preferred Rewards

Alongside Merrill Edge’s parent company, Bank of America, another well-recognized brand is Capital One Investing, whose parent company is Capital One. Next to Bank of America, Capital One is the only other bank to offer every service type: retail locations, checking accounts, savings accounts, debit cards, credit cards, and home mortgages. Capital One is best known for its credit cards, and like Bank of America, its customers enjoy the benefits of universal login for easy access to all their accounts.

Together with our ranking, we present highlights from the rest of the full-service brokers. Fidelity has one of the best cash rewards credit cards on the market, with its 2% Fidelity Investment Rewards Visa Card (Fidelity cut its ties with American Express in early 2016). Of the remaining brokers, Charles Schwab is the only one to offer home mortgages. The list goes on and on.

When it comes to banking and brokers, the great news is that investors have multiple options from which to choose. Full-service brokerages generally do a very good job of catering to the specific needs of their customers, and provide a well-rounded offering. This is especially true for customers who already do their banking with Bank of America, Capital One, or Ally; the move to add investing as an additional service is just a few clicks away.

Best for Customer Service

Based on 260 phone tests over ten weeks, here is a summary of the top five brokers for customer service (view infographic):

  1. TD Ameritrade
  2. Fidelity
  3. Merrill Edge
  4. Charles Schwab
  5. TradeStation

When assessing customer service, one phone call is not enough. To gauge the quality of support properly, multiple tests across every channel must be conducted. Here at StockBrokers.com, we are proud of the fact that our testing is respected as the most rigorous in the industry.

To ensure the highest quality testing data, we partner with professional private shopping group Confero.

To ensure the highest quality testing data, we partner with professional private shopping group Confero. With customers such as Coca Cola and Shell, Confero understands how to read between the lines and identify truly superior customer service. Using our StockBrokers.com industry-specific templates, Confero made 260 phone calls to branch offices and support numbers across the United States.

This year, TD Ameritrade was once again able to take the No. 1 spot overall, edging out Fidelity. Merrill Edge has been an extremely consistent performer, finishing third in 2018, second in 2017, first in 2016, and second again in both 2015 and 2014. The consistency and ability of TD Ameritrade’s support reps to repeatedly deliver an A or A+ experience is truly impressive.

For a full breakdown of our customer service testing this year, view our infographic.

Best Brokers Summary


Online Broker Best For Minimum Deposit Commissions Overall Rating
Fidelity Best for Investors $2,500 $4.95 4.5 Stars
TD Ameritrade Best for Traders $0 $6.95 4.5 Stars
Charles Schwab Best for Retirement $1,000 $4.95 4.5 Stars
E*TRADE Best for Options $500 $6.95 4 Stars
Interactive Brokers Best for Professionals $10,000 $.005 per share 4 Stars
Merrill Edge Best Rewards program $0 $6.95 4 Stars
TradeStation Best Platform Technology $5,000 $5.00 4 Stars
Ally Invest Best for Ally Clients $0 $4.95 4 Stars

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References

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All pricing data was obtained from a published web site as of 02/20/18 and is believed to be accurate, but is not guaranteed. The StockBrokers.com staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page. For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.

TD Ameritrade, Inc. and StockBrokers.com are separate, unaffiliated companies and are not responsible for each other’s services and products. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading privileges subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options. Offer valid for one new Individual, Joint or IRA TD Ameritrade account opened by 9/30/2018 and funded within 60 calendar days of account opening with $3,000 or more. To receive $100 bonus, account must be funded with $25,000-$99,999. To receive $300 bonus, account must be funded with $100,000-$249,999. To receive $600 bonus, account must be funded with $250,000 or more. Offer is not valid on tax-exempt trusts, 401k accounts, Keogh plans, Profit Sharing Plan, or Money Purchase Plan. Offer is not transferable and not valid with internal transfers, accounts managed by TD Ameritrade Investment Management, LLC, TD Ameritrade Institutional accounts, and current TD Ameritrade accounts or with other offers. Qualified commission-free Internet equity, ETF or options orders will be limited to a maximum of 250 and must execute within 90 calendar days of account funding. No credit will be given for unexecuted trades. Contract, exercise, and assignment fees still apply. Limit one offer per client. Account value of the qualifying account must remain equal to, or greater than, the value after the net deposit was made (minus any losses due to trading or market volatility or margin debit balances) for 12 months, or TD Ameritrade may charge the account for the cost of the offer at its sole discretion. TD Ameritrade reserves the right to restrict or revoke this offer at any time. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. Please allow 3-5 business days for any cash deposits to post to account. Taxes related to TD Ameritrade offers are your responsibility. Retail values totaling $600 or more during the calendar year will be included in your consolidated Form 1099. Please consult a legal or tax advisor for the most recent changes to the U.S. tax code and for rollover eligibility rules. (Offer Code 264) TD Ameritrade Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2017 TD Ameritrade.