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7 Best Online Stock Trading Platforms
By James F. Trumm MONEY RESEARCH COLLECTIVE
$0 for all self-directed trading / $30 per broker-assisted trade
$0
Stocks, ETFs, Crypto
$0 for online U.S.-listed stocks, ETFs, and options + plus $0.65 per contract on options
$0
Stocks, options, ETFs, bonds, CDs, funds, FOREX
No trading fees; annual 0.25% account fee
$10 to open
N/A
$0 for online U.S.-listed stocks, ETFs, and options + plus $0.65 per contract on options
$0
Stocks, ETFs, funds, options, bonds, CDs, UITs, futures, FOREX
$0 for online U.S.-listed stocks, ETFs, and options + plus $0.65 per contract on options
$0
Stocks, options, ETFs, bonds, futures, funds, margin rates, FOREX
Online stock trading platforms are powerful tools for both novice and experienced investors. They can help you build wealth by making it easy to invest in stocks, bonds, mutual funds and currencies. They also use the latest technology to provide investment education, research, portfolio evaluation and trading analytics to help investors at every level.
Over the past decade, new entrants into the industry have created a crowded and diverse group of online trading platform options. This abundance of choices makes it challenging to decide which one is right for you. But with the help of our extensive research, you’ll have the information you need to find the right platform for your investment needs. With that in mind, here are our picks for the best online stock trading platforms of 2022.
Our Picks for Best Online Stock Trading Platforms
- Fidelity – Best Overall
- E*Trade – Best for Beginners
- Betterment – Best for Hands-Off Investors
- TD Ameritrade – Best Web Platform
- Charles Schwab – Best for ETFs
- Webull – Best for Mobile
- Vanguard – Best for Low-Cost Funds
Best Online Trading Platforms Reviews
Best Overall Platform: Fidelity
Why we chose it: Fidelity’s outstanding research, no-fee investment and fund management, and its selection of mutual funds are the reasons it beat out Ameritrade and other online stock brokers as the best overall stock trading platform.
Along with low-cost order execution, Fidelity provides an extensive suite of tradable assets on an easy-to-use investing platform. Investors can also take advantage of mobile trading, margin trading, excellent wealth management tools and simulated trading on the Active Pro platform. If you aren’t comfortable managing your portfolio, you can use the Fidelity Go robo-advisor to develop your strategy.
Fidelity’s online trading platform accommodates novice and advanced investors who need tools for large portfolios and intricate investment strategies. In addition, Fidelity offers personal wealth management guidance.
Best for Beginners: E*Trade
Why we chose it: E*Trade has the best trading platform for beginners because it makes getting started in investing easy by providing an automated portfolio builder, easy-to-use tools and 24/7 customer service.
Although E*Trade separates itself from the competition with its basic investment options, it does not compromise service to advanced traders. The platform offers a wide selection of investment choices with commission-free stocks, ETFs, and options trades. E*Trade’s low-fee portfolio-management service is great for passive investors. Its full-service mobile app, extensive research capacity and in-depth stock screening encourages new investors to stay with the platform as they learn how to buy stocks, and gain more experience and investment savvy.
Best for Hands-Off Investors: Betterment
Why we chose it: Among the platforms we evaluated, Betterment is the most suitable online trading platform for hands-off investors because of its exceptional robo-advisor, expert financial advisors and cash management services.
Betterment’s automated investing services allow you to pick your investing strategy by account type. Your account choices include a taxable brokerage account, a Simplified Employee Pension IRA (SEP-IRA), or the standard Roth IRA. Also, Betterment offers portfolio balancing, tax saving strategies and dividend reinvestment.
Best Web Platform: TD Ameritrade
Why we chose it: Of all the best online stock trading platforms, TD Ameritrade continues to offer the best web platform because of its wide range of securities, massive research section, streaming news and stellar analytical tools.
This comprehensive platform also allows you to purchase free Forex currencies, futures and other investment products that are unavailable on many other online platforms. Besides offering commission-free security trading, TD Ameritrade offers securities like Initial Public Offerings (IPOs). In addition, TD Ameritrade provides free research and educational resources, webinars, calculators, good customer support, and the advanced Thinkorswim web and mobile app.
Best for ETF Trades: Charles Schwab
Why we chose it: We selected Charles Schwab is the best online trading platform for ETFs because it doesn’t have an account minimum and it offers free online stock and ETF trades. It also features a full-service brokerage within a digital environment.
After signing up and establishing your account, you can manage your trading activity, use Charles Schwab’s automated trading feature, or get help with your investing strategy for free. Also, you can purchase fractional shares or invest in Forex and gain exposure to cryptocurrencies through relevant trusts and funds. Schwab’s large-scale asset inventory allows you to invest in traditional, Roth and Rollover IRAs without fees.
Best for Mobile: Webull
Why we chose it: With an app that features advanced charting, investment strategies and high-performance trading tools, Webull edges out the competition in this crowded field and earns our nod as the best mobile trading service.
Webull excels in every aspect of trading on a mobile app, including an impressive trading simulator. It also provides tutorials for beginners who intend to become active traders. As a practice incentive, Webull conducts competitions with cash prizes. In addition, the company gives away free tradeable stock for opening an account with at least a three-dollar balance, your initial deposit and referrals.
Best for Low-Cost Funds: Vanguard
Why we chose it: Vanguard has the unique distinction of being a shareholder-owned institution. As a result, the company uses its profits to keep the fees on its funds low.
Vanguard stands out due to its owner-shareholder structure, which allows it to charge investors lower fees than its competitors. But the online broker’s extensive investment inventory of index mutual funds and ETFs are equally impressive, allowing you to trade stocks, CDs, mutual funds and other investment instruments. In addition, Vanguard offers a financial advisory service that connects you with qualified professionals who can help you adjust your portfolio.
Other Online Stock Trading Platforms We Considered
We evaluated the following online brokerages. However, they didn’t make the best online trading platforms list for various reasons.
Robinhood
Robinhood strives to attract young people who usually wouldn’t be investors without the company’s approachable and easy-to-understand platforms.
Robinhood seeks to democratize personal finance with easily boardable apps. As a result, 70% of its users are Gen Y and Gen Z, and Robinhood has a higher percentage of minority users than other major online trading brokerages. However, its lack of educational and training features makes its platforms more compatible with experienced traders. In addition, Robinhood’s tendency to attract controversy has put it on the radar of politicians, regulators and market influencers.
Cash App
Cash App is a popular hybrid financial product that is one part peer-to-peer payment app and one part investing app. Along with trading stocks, you can use Cash App to conduct cash transactions, bank activities and debit card spending against your account.
Pro
- Easy access to trading
- Offers fractional shares
- Free Tax filing
Cons
- Sparse investment instruments and account types
- Inconsistent customer service
Despite its versatility, Cash App may eventually fall short of your expectations. As you grow and mature as an investor, you will probably want to trade on a dedicated online stock trading platform with a wider variety of stocks to trade.
Online Stock Trading Platforms Guide
Online trading platform users can buy and sell investment assets, manage their portfolios, monitor current stock market trends, research securities and other investment-related activity. In addition, some online brokerages offer investment counseling from financial advisors and financial planners.
What is an online stock trading platform?
Unlike traditional stock brokerages, online trading platforms allow you to use your computer, smart tablet or smartphone as a means to trade securities or conduct other financial-related tasks. Financial institutions design their online brokerage accounts to feature specific asset classes, such as mutual funds, options, ETFs and stocks.
Traditional brokerages typically require you to communicate directly with a human broker to execute a trade. Online trading platforms don’t require human interaction. Some brokerages only offer online trading, while others bridge the gap between the two business models with traditional financial advisors.
How do online stock trading platforms work?
After completing the sign-up process, you can start preparing your new brokerage account for trading. This stage requires you to fund your account by linking your bank checking or savings account to your brokerage account.
When your funds clear in your brokerage account balance, you are free to trade any of the securities your online trading platform offers. First, you can locate an asset by its name or ticker in the platform’s search bars. When you find an asset worthy of your investment, you can place a buy order by typing in the number of shares and the amount you want to invest into the order dialog box, selecting the order type and clicking the buy button.
You will discover that trading tools on most online stock trading platforms are handy for analyzing and evaluating your investment choices. One of those trading aids is a stock screener. With this set of tools, you can sift through thousands of available stocks until you form a list of stocks that meet your criteria. Stock screeners are usually available for free on most online platforms, but some investment software providers offer them independently by subscription.
Types of brokers
Trading platforms can vary in many ways. But in general, brokers can be classified as discount brokers or full-service brokers.
- Discount brokers provide self-directed portfolios for self-serve investors who take the responsibility of doing research, picking their securities, managing their portfolios and performing other investment-related tasks. If you choose a discount broker, you oversee all your investment holdings and trade decisions. Online trading platforms like Robinhood and Webull are examples of discount brokers. These brokerage firms entice self-serve investors with low or no account minimums, discounted execution fees and other money-saving incentives that promote active trading.
- Full-service brokers blend traditional and contemporary services to offer you online access to the trading markets and provide connections to financial advisors upon request. With this arrangement, you can get expert advice about stock choices and portfolio management without giving up control of your trade activity. In addition, a full-service broker may offer other services such as wealth management, retirement and estate planning, tax planning and other financial services. Since they provide premium services, full-service brokers set higher account minimums and charge steeper account fees than discount brokers.
Types of orders
When investors decide to buy or sell a security, they send instructions to their brokerage in the form of an order. To help you define your trade terms, you can choose between three types of orders: market orders, limit orders, and stop-loss orders.
- Market orders instruct brokerages to buy or sell at the optimal price available under current market conditions. As a result, these trades happen almost instantaneously at a low cost. However, you have no protection against price fluctuations at the time of the trade execution. Market orders generally have low commissions.
- Limited orders provide volatility protection by restricting trades to a set price chosen by you. However, your trade might not happen if the security’s underlying price doesn’t meet your target price. Plus, you pay higher commissions for limited orders.
- Stop-loss orders authorize a best-available-price trade after the security’s underlying price matches your set price. This order condition allows you to take advantage of trade opportunities while curbing your chances of loss.
How To Choose The Best Online Trading Platform For You
When searching for the best online stock brokers for your needs, you should consider these three factors: your trading experience, your trading requirements and your financial goals.
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Trading experience
Your level of trading experience should heavily influence your decision on the type of online stock trading platform you select. For example, robo-advisors are helpful for beginners because they automatically maintain a diversified portfolio. Also, more online stock trading platforms offer paper trading, a service that permits investors to simulate trades without risking money. On the other hand, advanced traders may profit from using a platform that allows specific types of trades and provides powerful analytic tools.
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Trading requirements
If you plan to be a day trader and make numerous trades within 24 hours, your platform choice must be speedy and low cost. On the other hand, long-term investors may need more premium services like wealth management, retirement planning and help from financial advisors.
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Investment Goals
Your investment strategy will be more effective when combined with your goals. Some goals you may be considering are wealth building, funding your retirement account, generating passive income, or investing as a hobby. Once you determine your overall goals, you will have a better chance of finding the best online stock trading platform to meet them.
Online trading platforms vs. robo-advisors
By using your personal information, a robo-advisor automatically creates and manages your diversified portfolio with the aid of computer algorithms. It uses your income, age, trading goals and other personal data to help you become a passive investor.
Robo-advisor portfolios usually hold exchange-traded funds (ETFs) containing bundles of stocks and bonds. These apps automatically keep your portfolio balanced by trading assets according to your predetermined asset allocation. For more information about automated investing, read our list of the 7 best robo-investors.
What is the difference between Trading and Investing?
People often use the terms investing and trading interchangeably. However, from a technical standpoint, investing describes the practice of buying and selling securities to optimize long-term returns. Conversely, trading defines buying and selling securities for hefty short-term gain.
But this is a general definition of the two terms. It doesn’t imply that a person who primarily invests doesn’t engage in trading or vice versa. Instead, it describes two investment approaches.
What Do You Need to Start Trading Online?
The U.S. Securities and Exchange Commission (SEC) requires all online trading platforms to abide by its rules and regulations. To comply, online brokers will ask you to supply certain personal information before you open a trading account. Most brokerage account sign-up forms will ask for the following details.
- Personal and contact information like your legal name, address, phone number, email address and birthdate
- Driver’s license, other forms of government-issued ID, social security number
- Place of work, work location, position title
- Optional bank account details for transferring funds
- Optional brokerage account details for transferring purposes
How We Picked the Best Online Trading Platforms
We regard these aspects of online trading platforms as major priorities to consumers.
- Online Access: The highest-ranked companies provide ease of access, intuitive navigation, and multiple trading options.
- Low fees: Cost can be a crucial determining factor for many consumers.
- Investment Research and Tools Availability: Consumers prefer platforms with charts, educational material and tutors over bare-bones platforms.
- Superior Technology: Platforms with automated tools rated higher.
Summary of the Best Online Stock Trading Platforms of 2022
- Fidelity – Best Overall
- E*Trade – Best for Beginners
- Betterment – Best for Hands-Off Investors
- TD Ameritrade – Best Web Platform
- Charles Schwab – Best for ETFs
- Webull – Best for Mobile
- Vanguard – Best for Low-Cost Funds
