Four Key Factors to Choosing an Online Brokerage

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The number of retail investors, and thus the number of online brokerage accounts, has grown tremendously over the past decade. That competition helps drive down costs and also fosters innovation. If your commission rates seem higher than average, you might be able to negotiate a better rate. Here are some important items to consider when selecting a broker: Stocks and options can almost always be traded from the same account, while futures and currencies ForEx often require separate accounts even if the trades can be placed via a common platform.

Account Types Every online broker will allow you to open standard single-owner or joint accounts, and most also allow you to open IRA accounts, although they may limit your trading privileges in the latter.

However, if you need a less common account type like a beneficiary IRA, a k rollover, a custodial account, or an account owned by an LLC for an investment club, then determine early on whether the broker is able to accommodate your needs. Be prepared to file some additional paperwork for these account types.

Commissions and Fees Most brokers options when choosing an online brokerage volume discounts; the more you trade, the lower the commission rates you qualify for. Check whether your broker can supply the data that you typically use, and if so, whether there are any costs associated with gaining access to that data. Platform Tools Every trading platform offers its own unique set of functionality. Release notes can be especially helpful in pointing you to useful new functionality, but are also a good gauge of how much effort the development team is putting into adding new features versus fixing bugs from previous releases.

Shares Available to Borrow You can only short stocks if your broker options when choosing an online brokerage shares available to borrow. At any given time, one broker may have shares available for a particular stock, while another broker does not. Over time, however, patterns emerge regarding which brokers most consistently have shares available for borrowing.

If short strategies are particularly important to your trading plan, you may want to consider having accounts with multiple brokers simply to increase the odds that you will be able to open short positions for most or all of your short trade signals. Mobile Support There has been huge growth in the area of mobile trading over the past months.

Brokers are building out their platform capabilities on iPad and Options when choosing an online brokerage tablets, and often have separate applications optimized for smart phones as well. If you often find yourself trading on the go, check out these supplemental tools. Integration with Tax Options when choosing an online brokerage One of the most burdensome aspects of trading frequently is dealing with the tax consequences.

If you prepare your own taxes using a package such as TurboTax, then you can save an enormous amount of time if your platform is able to export all of your trading activity as a CSV or TXF file that can be imported into the tax package. At Connors Research, we are using it as an overlay to many of our best strategies to make them even better -- now you can, too. Radtke graduated magna cum laude from Michigan State University with a degree in computer science. He has 25 years of software development experience in companies large and small, including Hewlett-Packard and Bell Northern Research.

Radtke has been actively trading stocks, ETFs, and options since options when choosing an online brokerage The Connors Group, Inc.

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Investors should know the best online brokers to trade with. Some online stock brokers are known for their award-winning customer service while others are known for inexpensive stock trades or powerful trading tools.

This guide will highlight some of the best brokers available today with tips and advice for choosing a broker. Its platforms thinkorswim was 1 desktop platform , tools, mobile apps including Alexa Skill and Facebook Messenger bot , research, customer service 1 for phone support , and education 1 are all award winning.

Get up to free trades for 2 years. Fidelity is best known for its value driven customer experience. Beyond cost and ease of use, Fidelity also finished 1 for research tools. OptionsHouse has been rated the 1 platform for Options Trading the past seven years. Merrill Edge is the online broker of Bank of America and is available to all investors, regardless if they are a current BofA customer. Like TD Ameritrade and ETRADE, Merrill Edge is well-rounded; however, it has a huge advantage over all other brokers thanks to its Preferred Rewards program where customers can earn free trades, credit cards bonus cash back, priority customer service, and more.

I have personally been using the program since it launched in With its competitive commission rates for stocks and options trading, investors who have previous market experience will find themselves right at home. However, unless you are already an Ally customer, you will find that there are better offerings available. Having the best stock broker to serve individual needs is very important for any investor. For example, cheap trades most often come at the expense of less research tools and a more simplified trade platform.

Consider these 12 key factors to help compare all stock brokers and ultimately find the best broker to suite your needs. Trade Commissions What does it cost to buy shares of stock? Does the fee change based on the type of order or size of order? To keep it simple, look for brokers that offer flat-fee trades, ie charging a flat rate regardless of the type, price of the stock, or size of the order.

Customer Service When picking up the phone or emailing a broker, is a well trained customer service representative ready to assist? How any investor is treated as a client is more important to some than others. Trading Tools Trading successfully is a lot easier when investors have great tools at their disposal.

A top stock broker should offer access to a wide variety of trade tools to help make the most of each and every trade. From real-time streaming quotes to last sale tickers, quality stock scanners, mobile trading apps, and level II quotes to name a few.

Strong tools are essential for active investors. Account Minimums Some brokers allow you to open an account with no minimum deposit while others may require several thousand dollars.

Also know that some brokers require higher minimums to gain access to premium platforms, functionality, and personalized support. Market Research A good online broker will provide a variety of market research tools. The rule of thumb here is simple: Investment Options A online stock broker should offer access to not only trading stocks, but also a strong selection of no load mutual funds, commission free ETFs, and complex options.

Other unique investment offerings to look for could include direct market routing, conditional orders, futures trading, and forex trading. Other Fees Fees beyond trade commissions include inactivity fees common with active trading brokers such as Interactive Brokers, Lightspeed, and TradeStation and IRA fees for having a retirement account. Just like a bank account, stock brokers also make a portion of their profits off miscellaneous fees. There is no reason why you should pay an annual fee to have an retirement account.

If managing your own portfolio is not of interest, all full-service brokers offer optional advisory services as well. Furthermore, robo-advisors such as Betterment are growing in popularity. Once again, the experience at larger established brokers is going to be superior to smaller brokers. Banking Larger online brokers offer banking and other financial services. This goes beyond money market accounts and CDs.

Checking accounts, mortgages, debit cards, and credit cards can also be offered. The leader in this space is, hands down, Bank of America Merrill Edge. Account Security Because of the web today, all online brokers invest heavily into account security. Just like shopping online and choosing a trustworthy website to purchase from, the best bet is to choose a well-known, established broker for your portfolio.

To understand Order Execution, read this guide. International Trading For investors in the United States this is not a problem but for investors living outside the US, when comparing brokers it is important to make sure they offer service in your country. If you need help deciding which broker to choose or have a broker specific question please feel free to email me and I will be happy to help.

To view star ratings, summaries, screenshots, and more for these brokers, see our stock broker comparison tool. This took many dozens of hours to put together so I appreciate your support! Enter your email address.