What is paper trading?

Paper trading is trading with a simulated portfolio instead of real money. It allows novices to become comfortable investing real money and helps experienced investors evaluate complex trading strategies before putting money at risk.

Are paper trading and stock simulators the same thing?

Yes. There are several names for practice investing. Whether it’s called virtual investing, a paper trading account, or a stock market simulator, they all refer to accounts allow users to invest fake money using real market data.

Is paper trading good for beginners?

Yes, paper trading helps beginners become familiar with the mechanics of researching, buying and selling investments, and several brokers that offer simulated stock trading made our shortlist of best trading platforms for beginners . But investing fake money (and, especially, losing it) feels far different compared to investing your own money. You will learn more if you start off with paper trading, then invest small amounts of your own money by buying fractional shares.

Can you paper trade for free?

Yes. Paper trading is often bundled with other services in broker accounts. Most U.S. brokers do not charge monthly account fees or require minimum deposits, making paper trading free. You will have to open a standard brokerage account, but you do not need to deposit anything into it. Some brokers may charge for real time data, but delayed data is fine for paper trading.

Can you make money paper trading?

You may make paper profits, but you will not be able to exchange them for real money. You may, however, look for stock picking contests that offer cash prizes.

Can I paper trade with options?

Brokers that allow options trading in live accounts and offer paper trading will likely allow you to trade options in the paper account for practice, a very good idea for new options traders.

Does Fidelity offer simulated/paper trading?

At this time, Fidelity doesn’t offer paper trading, but beginners aren’t left in the cold. Fidelity offers fractional shares of stocks and ETFs, which still allows novices to get started without risking too much money.

Does Robinhood have paper trading?

At this time, Robinhood doesn’t offer paper trading. Beginners can get started by buying fractional shares.

Will paper trading make me a better trader?

Paper trading is a good introduction to investing, and it’s very helpful for learning how to use a broker’s specialized tools. But you will experience investing differently when you have real money at risk. A $10 loss of real money feels vastly different than a $100,000 loss of nonexistent money. Track your trades: Read about the best trading journals on our sister site, investor.com.

Best Paper Trading Platforms of 2024

Written by Sam Levine, CFA, CMT
Edited by Carolyn Kimball
Fact-checked by Steven Hatzakis
Reviewed by Blain Reinkensmeyer

March 25, 2024

Do you want to invest in stocks with no risk? Just open a standard investing account with a broker that permits paper trading. Paper trading, otherwise known as simulated trading or virtual trading, lets beginners experience what it’s like to actually buy and sell stocks, options, and other investments. And novices aren’t the only ones playing with Monopoly money; experienced traders use virtual portfolios to test out new strategies or try out trading platform features.

Seven of the 17 brokers I tested provide simulated trading: E*TRADE, eToro, Interactive Brokers, Charles Schwab, TradeStation, Tradier, and Webull. I researched their minimum deposits and average balances, and I checked for any ongoing fees. I’m happy to report that you can have an account packed with hundreds of thousands, no, even millions of dollars for free. Just don’t try to spend it.

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