Friday, 22 February 2019

Best Online Stock Trading Brokers for 2019

If you’re looking for a way to build more wealth in 2019, getting started with one of the best online brokerage accounts is a solid first step. Doing so will allow you to invest outside your traditional retirement accounts and on your own terms. The best part is, the best online brokerage firms charge little or no fees and offer excellent resources that can help you learn more about investing along the way.

Of course, not all brokerage firms are created equal, and that’s why we took the time to break down each of their details and rank the top options on an array of factors.

If you’re looking for a new way to invest this year and are ready to strike out on your own, the following online brokerage accounts should be at the top of your list.

The Simple Dollar’s Top Picks Best Online Brokerage Accounts in 2019
Optionshouse – Best Discount Broker (also Best Options Broker)
Scottrade – Best Support and Service
E*TRADE – Best Trader Resources
TD Ameritrade – Best For Developing Traders
What Matters When You Trade Stocks on Your Own?
Managing your own money can be a stressful endeavor. To minimize this, and to minimize information overload that tends to come from watching the markets 24/7, there are a few must-haves to look for in an online broker.

Clean interface. When I trade, I want to be able to easily find my order entry ticket. I don’t want it buried under a number of drop downs. This interface should have intuitive access to see your balance, available cash, positions with real time P/L and all be easily navigated.
Quick access to basic charting. A chart tells me where the stock has been recently. I don’t trade minute to minute anymore, so I don’t need complex tools like stochastics or retracement lines. All that’s important is that I have a basic chart on a yearly, monthly, weekly, daily and intra day time period. I use a chart to see current price relative to those time periods, mainly to avoid purchasing at a bad price.
Low fees. One of the biggest roadblocks to building wealth is fees incurred to invest your hard-earned dollars. Because the fees charged by different brokerage firms vary so dramatically, it’s crucial to seek out options that charge low fees (or no fees) for account management and trades.
There are over 50 online brokerages where you can open an account. Beyond the my three rules above, best online brokerage accounts aren’t just for trading stocks. Sure, many of them started as online stock trading accounts, but now they’re full-fledged trading, saving, investing, retirement planning, and banking machines.

This industry is more complex than the average person thinks. You shouldn’t just pick any online broker and sign up for an account. The best online broker for one person is often completely different for the next person. Use this resource as a guide to your decision process. Figure out what features are best for you, and make your selection.

What Makes a Great Online Broker?
I analyzed a number of elements to come to my decision on which brokers are the best. Later in this post, I provide full details on how I selected the best online brokerages.

When you take all the features, resources, trading platforms, and technology into account (while also considering every type of trader), the full-service brokers, like E*TRADE and TD Ameritrade are the best for the largest number of people.

For those simply looking to make cheap trades, I would recommend going with Optionshouse.

If you’re a very advanced trader, high-volume trader, or a professional who manages money, I recommend going with Interactive Brokers. However, I didn’t include Interactive Brokers on my list because they’re best for a very small group of traders and the platform is very complex.

Top Qualities of Standout Online Trading Platforms

Quality trading tools and technology
Multiple trading platforms for all levels of traders
Excellent mobile trading features
Solid navigation that displays the relevant information where you want it
Quality educational resources and research for trader development
There’s more to selecting an online broker than price. You have to consider the resources you’re getting for the cost you pay per trade.

For example, my colleague, who is also an ex-trader, likes to use a combination of stock and options trade in his longer-term trading. He recently switched over to Fidelity because he really liked the cash management features, but was very disappointed by complex order entry, sub-par options execution and frustrating navigation. He’s currently making the switch to one of the brokers I profile here.

Analysis of the Best Online Brokers

Best For:

Options Traders
High-Frequency Traders
Deal Seekers
Get Started

Best Discount Broker

When it comes to getting a deal on a stock or options trade, it’s tough to beat OptionsHouse. Along with the low costs and fees, you’ll also have access to proprietary tools and technology. OptionsHouse isn’t a “full-service” broker like TD Ameritrade, which means you won’t find the same comprehensive financial resources and access to every investment product. OptionsHouse is good at what they do — providing very affordable trading prices, low margin rates, and unique tools for stock and options traders.

NOTE: OptionsHouse was acquired by E*Trade at the end of 2016, but no changes are expected to OptionsHouse pricing or trading platforms.

Costs & Fees

Reasons to Sign Up

Reasons to Avoid

OptionsHouse Costs and Fees
Stock Trade: $4.95 for new traders, $3.95 for current traders>
Options Trade: $4.95
Options Contract: $0.50
Mutual Funds Trade Fee: $20
Futures Contract Cost: $2.00
Margin Rates: 1.5%-5.0%
Minimum Deposit: $0

Best For:

Long-Term Investors
Research-Based Traders
Get Started

TD Ameritrade
Best Support and Service

For years, Scottrade has been known as the best online brokerage for customer service. TD Ameritrade doesn’t just let you open an account and ignore you. They thrive on building relationships with their clients, which is pretty rare these days. Scottrade is behind the times with some of their features, but they also don’t charge as much money per trade as the other full-service brokerages. If you’re a new trader or you just like being taken care of regardless of how much money is in your account, I don’t think you can do better than Scottrade.

Another reason to consider TD Ameritrade: They were recently acquired by TD Ameritrade. The deal closed around the fall of 2017 and a full conversion to TD Amertrade’s systems is expected to be in place this year. You’ll be well-served with Scottrade’s amazing service for beginning traders and TD Ameritrade’s breadth of offerings for traders of all levels.

Costs & Fees

Reasons to Sign Up

Reasons to Avoid

Scottrade Costs and Fees
Stock Trade: $7
Options Trade: $7
Options Contract: $1.25
Mutual Funds Fee (Load): $0 to buy, $17 to sell
Mutual Funds Fee (No-Load): $17
Futures Contract Cost: N/A
Margin Rates: 5.75%-7.5%
Minimum Deposit: $2,500 (recently updated), $0 for retirement account

Best For:

Low-Frequency Traders
Long-Term Investors
Research-Based Traders
Multiple Market Traders
Get Started

Best Trader Resources

E*TRADE is right there with TD Ameritrade and Scottrade if you’re looking for the all-around best online brokerage. What’s interesting about this comparison is that E*TRADE excels in several different areas compared to TD Ameritrade and Scottrade, but also has many similar offerings. E*TRADE’s web-based platform is incredibly advanced and a breeze to use, as is their mobile app. However, you have to pay for these features because E*TRADE is just as pricey as TD Ameritrade and requires a $500 deposit to open an account (TD Ameritrade is free).

Costs & Fees

Reasons to Sign Up

Reasons to Avoid

E*TRADE Costs and Fees
Stock Trade: $6.95
Options Trade: $6.95
Options Contract: $0.75
Mutual Funds Fee (Load): Varies by fund
Mutual Funds Fee (No-Load): $19.99
Futures Contract Cost: $1.50
Margin Rates: 4.14%-8.14%
Minimum Deposit: $500

Best For:

Traders of all levels
Long-term investors
Low-frequency traders
Beginning traders who want to advance
Get Started

TD Ameritrade
Best For Developing Traders

I’ve actually had a TD Ameritrade account for over 15 years now. Back in the day, it was TD Waterhouse and then it merged with Ameritrade to form one company. TD Ameritrade is one of the all-around best online brokers because any level of trader can be satisfied here. While the costs and fees are on the high end of the industry, you get access to comprehensive research materials (both third-party and in-house) as well as education resources that can help you advance as a trader.

Costs & Fees

Reasons to Sign Up

Reasons to Avoid

TD Ameritrade Costs and Fees
Stock Trade: $6.95
Options Trade: $6.95
Options Contract: $0.75
Mutual Funds Fee (Load): $0
Mutual Funds Fee (No-Load): $49.99
Futures Contract Cost: $2.25
Margin Rates: 6.25%-8.75%
Minimum Deposit: $0

Choosing the Best Online Brokerage Accounts
Choosing the best online brokers is no easy task. There’s so much variation in this industry from company to company, and then you have to factor in the type of trader or investor who’s opening the brokerage account.

Here’s how I got started:

I conducted research to compile a list of every online broker.
I narrowed the list down to just under 50 brokers by eliminating those that did not allow U.S. stock trading.
I individually researched each broker, visited their websites, and analyzed rankings and reviews across the web.
I concluded that there were 15 online stock brokers worth digging into.
My next step was to come up with measurable data to compare these brokers.

I had to be aware that comparing a full-service broker to a discount broker or options broker was going to be difficult. I didn’t want to penalize companies for specializing, but I also needed to reward the full-service firms for offering additional resources.