Best options trading account 2014

5 Best Online Broker Platforms For Options Traders. Options trading can be simple, but can quickly get complicated. Online brokers provide customers tools to handle the tons of quotes, statistics and underlying-securities tracking they might need to succeed in trading puts and calls. IBD's 2013 Best Online Brokers Survey found the five options trading platforms that clients rated highest. They were OptionsXpress , TD Ameritrade ( AMTD ), Interactive Brokers, Charles Schwab ( SCHW ) and TradeStation . "Options can be used by a wide variety of investors to target a wide variety of objectives," said Jim Bittman, director of program development and a senior instructor for the Options Institute at the Chicago Board Options Exchange. Brokerage firms have developed platforms to help options traders of all levels, from novices who buy a call or put to advanced folks who put on multilegged positions. While some platforms are bare-bones, others have a barrage of features such as streaming data, sophisticated analytics and pricing tools. Investors can choose a platform that's Web-based or downloaded as a separate program. A Web-based trading platform is accessed from your broker's website. These are generally less fancy and less customizable. Downloaded platforms tend to use flashier charts and tools. They also tend to give users the ability to customize screens and layouts.

OptionsXpress, owned by Schwab, has offerings for clients ranging from beginners to more sophisticated traders. The broker's Web-based platform is not flashy, but is laid out well. It has easy-to-use order-entry interfaces under secondary navigations for single-option orders as well as spreads and covered calls. The company also has an all-in-one trade ticket that makes entering orders with multiple options faster and easier. Just select the method you want to put on, and the different legs of the trade will be set up for you. OptionsXpress also has tools to help find trade ideas, as well as volatility charts and price calculators. TD Ameritrade also offers a basic, Web-based platform that has something for every level of investor. Order entries for single options, covered calls, spreads and strangles can easily be accessed under a secondary navigation. For single options orders, you can choose an exchange to handle the order or you can have it done automatically. Whether you're putting on a spread, strangle or straddle, you easily get quotes for those trades as a package rather than viewing them in individual legs. For traders who want more advanced features, TD Ameritrade offers the Trade Architect and Thinkorswim platforms.

Trade Architect is a Web-based platform catering to active investors, who can select a method and get profit-and-loss graphs to see how the trade can play out. Thinkorswim, which requires a download, is TD Ameritrade's platform for advanced traders. Packed with sophisticated features, investors can monitor the market and place trades in one screen. Complex strategies can be easily placed, and investors can switch layout views to see implied volatilities and probabilities. Interactive Brokers has two platforms for customers. One is its Web Trader platform, which has just the basics for viewing option chains and entering orders. The company also offers a much more advanced tool for options traders. Interactive Broker's OptionTrader, which is within its Trader Workstation platform, lets users view options chains, including key statistics such as implied volatilities and greeks -- a term that refers to delta, gamma and other measures of options' sensitivity to various factors. Orders for single options or combination orders can easily be entered. Buttons are conveniently placed to reverse a position or hedge it from price risk. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of NASDAQ, Inc. Best Options Trading Brokers and Platforms. NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent.

We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers. Who is the best options broker today? The answer depends on whom you ask and what they value. For some investors, the best broker for trading options is the one with the cheapest commissions. Others prioritize trading tools, platform design, research, customer service or all of the above. While most of the brokers on our best-of list below would be a good, all-encompassing choice for many investors, we’ve also highlighted the standout candidates in specific areas that matter most to options traders. Unsure what you’re looking for? See how to choose an options broker for more on what can make or break an options trading experience. Summary: Best online stock brokers for options trading. Best for low-cost. Best options trading platform. Best for research and education. Best overall for options trading.

Our top picks cover all the option trader needs — access to high-quality research, analytical tools, a user-friendly platform — at reasonable prices. TD Ameritrade and Interactive Brokers earn high marks for options investors for their advanced trading platforms, deep bench of research and tools, plus their high-caliber options trading capabilities. TD Ameritrade handily serves option traders no matter where they are on the learning curve. The broker’s thinkorswim platform offers a robust options trading experience for active investors seeking professional-grade tools to identify trading opportunities, analyze potential risks and rewards, test trade strategies and quickly place even the most complex options trades. The broker’s web-based Trade Architect platform is for investors just getting into options or those who don’t require a high-octane platform. Its stripped-down, easy-to-use interface won’t overwhelm newbies. And although Trade Architect isn’t as fully stocked with tools and data as thinkorswim, it’s no slouch, either. Intermediate investors will find advanced features like a marketoptions heat map, screening and tradefinder tools, and streaming news. Get details in our TD Ameritrade review. For cost-conscious, active options traders looking for low costs and a platform with a lot more meat on its bones, Interactive Brokers may be more your style. Interactive Brokers charges just 70 cents per contract with no base fee ($1 minimum order), plus discounts for larger volumes, if you can manage the $10,000 account minimum.

Its Trader Workstation platform (with an options method lab) is considered one of the best and most sophisticated around. But watch other fees to ensure that the lower commissions pay off. Both brokers allow prospective clients to test-drive the goods without putting any real money on the line. TD Ameritrade offers a paperMoney virtual trading account to test out the thinkorswim platform. At Interactive Brokers, once customers open a real account (which has a $10,000 minimum funding requirement), they can set up a paper trading account that offers them hands-on practice using IB’s Trader Workstation platform and tools. Best brokers for low-cost options trading. These brokers offer competitively priced options trading commissions and have eliminated or dramatically capped minimum trading fees. In early 2017 most of the mainstream online brokers slashed commissions to levels once reserved for their deep-discount peers. That doesn’t mean that they’re the best deal in town for every investor. For active options traders, eOption earns five stars from NerdWallet for its low options trade commissions. The company charges a fixed $3 base plus 15 cents per contract.

Another plus: eOption is known for having some of the lowest margin rates available. Although eOption charges a $50 annual inactivity fee on accounts that have placed fewer than two trades in the past 12 months or have less than $10,000 in credit or debit balances, the minimum trade workaround isn’t onerous, even for infrequent traders. Charles Schwab’s trade commission of $4.95 base rate plus 65 cents per contract puts it within spitting distance of deep-discount peers. Schwab recently fully took over the old OptionsXpress and incorporated that broker’s options experience into its own platform, with both web-based and mobile functionality. Commissions aren’t the only costs associated with trading options. Platform, data and other fees can quickly cancel out what you save on commissions. See our full reviews of Charles Schwab and eOption for details on what they offer. For those simply looking for a cheap way to execute options trades, Charles Schwab and eOption get the job done. Best options trading platforms. These brokers offer some of the most powerful trading platforms available for a reasonable price. Judging a broker’s trading platform by the number of features it offers is like buying a car based solely on what you read in the dealer brochure.

While all investors have their must-have features, what’s more important is how the platform feels when it’s in their hands. The trading platforms at Ally Invest and TradeStation offer a wide variety of analytical tools, provide stable and speedy trade execution, and allow investors to customize the tools and design to best suit their needs. Unlike TradeStation, Ally Invest (formerly TradeKing) is technically a deep discount broker as reflected in its commissions (options traders pay a $4.95 base plus 65 cents per contract with only one base charge per spread), $0 account minimum and free access to research and data. Frequent traders (those who place 30 or more trades per quarter or who carry a balance of $100,000 or more) pay a discounted $3.95 base and 50 cents per contract. But don’t be fooled by the lower prices: Customers get a lot of platform power for free. Ally is suitable for newer options investors. The browser-based platform resembles the offerings of its pricier competitors and comes with free options trading tools for screening and advanced charting. Navigation is easy and streamlined. Customers can create a custom dashboard with movable modules with the data and features they want to use. The setup extends to what users see across all devices, including mobile and tablet. TradeStation is best left to more experienced, tech-savvy investors who want to experience options trading using the same tools as pro traders. The broker provides all the tools needed to design, test-drive, monitor, automate and speedily execute the most complex trades via direct-market access (no pesky middleman to slow down the process). Its OptionsStation Pro platform is fully integrated into TradeStation’s regular trading platform. An added bonus is the broker’s active investor forums, where traders discuss ideas, ask questions and get help.

Access to all of TradeStation’s bells and whistles used to come at a steep $99.95 monthly platform fee for those who didn’t meet account balance or trading activity minimums. But in March 2017 TradeStation eliminated the service fee, lowered its trade commissions for stocks and options and tossed in free real-time market data and free access to its market-monitoring and portfolio-level back-testing tools. Educational tools and platform tutorials are plentiful, which is a plus: Because of the sophisticated nature of the platform, it may require some time to become familiar with all that it offers. See more in our TradeStation review. Best research and options trading education. Both offer extensive research and data for free, as well as live classes and webinars for beginning and advanced options traders. If you’re new to options trading or want to expand your trading strategies, a broker that devotes its resources to research and customer education is a must. Because Schwab and Fidelity each have offices across the country in addition to their online options education libraries, they’re able to offer in-person guidance and free seminars on how to trade options, as well as one-on-one guidance on using the tools each platform offers. Fidelity’s constantly refreshed library draws from more than 20 providers, including Recognia, Ned Davis, S&P Capital IQ and McLean Capital Management. The full suite is available to customers when they sign into the broker’s web-based platform. And you don’t have to stop digging when you’re away from your computer: Fidelity has a strong mobile app that lets customers access the company’s full suite of research through a mobile browser.

Charles Schwab’s options trading capabilities and lineup of trading data and research got a big boost as the company integrated its purchase of OptionsXpress. In October Schwab re-launched its online platform under the StreetSmart name, with both web-based and mobile functionality, though for now only former OptionsXpress clients have access to the new platform. In the first quarter of 2018, Schwab will begin rolling out the new platform to all clients. While the platform name is changing, Schwab still provides a fully realized suite of offerings for options traders, including trade assessment tools, customizable screeners, access to Schwab analyst options-market commentary, live online webinars and pre-recorded seminars. Best brokers for beginner options investors. These brokers provide ideal conditions (educational resources, user-friendly platforms, customer support and low minimums) for investors just learning the options trading ropes. TD Ameritrade — one of our top overall brokers — ranked highest in this category, too. But since there are many types of beginners with many different preferences, instead of highlighting the category champions we’ve focused on brokers that are excellent candidates in three key areas: Low minimum opening balance requirements. Ally Invest, TD Ameritrade, Merrill Edge: If you’re not yet ready to devote a lot of your capital to options trading, you don’t want to tie up much in an account to meet the minimum. Many of the brokers on our list require no money to open an account. However, industry regulations require that traders maintain a $2,000 minimum to trade options. Strong customer support. Scottrade and TD Ameritrade: On-call help is particularly handy when starting out. One way to test a broker’s level of service is to contact the company with any questions you have about its option trading offerings before you even open an account.

Scottrade is known for its standout customer service and huge physical presence of 500 branches. So is TD Ameritrade, with around-the-clock phone and email support and 100 branches where clients can attend seminars and meet with investment associates. At the end of 2017, TD’s acquisition of Scottrade will be complete, increasing each broker’s ability to serve clients. User-friendly platforms. Ally, Charles Schwab and TD Ameritrade: There’s nothing better than test-driving a broker’s platform before you commit. Check to see if the broker you’re considering offers paper trading (virtual trading on a platform that mimics the real deal) or contact customer service to see if they will set you up with a demo account. As for brokers discussed in this review, Ally Invest’s browser-based platform is intuitive and easy to customize. And both Charles Schwab and TD Ameritrade have multiple platforms customers can use to start learning the ropes, then graduate to more sophisticated tools and trades if desired. Best options trading brokers: summary. Updated June 30, 2017. Disclaimer: NerdWallet has entered into referral and advertising arrangements with certain broker-dealers under which we receive compensation (in the form of flat fees per qualifying action) when you click on links to our partner broker-dealers andor submit an application or get approved for a brokerage account.

At times, we may receive incentives (such as an increase in the flat fee) depending on how many users click on links to the broker-dealer and complete a qualifying action. Best Online Stock Trading Brokers for 2017. Finding the right broker for you is not as simple as it seems. I’ve had an online stock trading account since I was 13 years old. I’ve used at least a dozen of the best online stock trading platforms in real practice and in testing over the past 4 years. I’ve gained a few “learning experiences” from managing my own account and working as a day trader for a firm in Chicago for several years. Using my knowledge of the platforms and experience as a trader, I worked to uncover the top picks and identify who or what each product is best for. The Simple Dollar’s Top Picks Best Online Brokerage Accounts in 2017. 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 247, there are a few must haves that I 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 PL 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. Self explanatory. 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. 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, according to this statement released by its CEO. Reasons to Sign Up. Reasons to Avoid. OptionsHouse Costs and Fees. Stock Trade: $4.95 for new traders, $3.95 for current traders> 4 Reasons to Sign Up for OptionsHouse. Very Low Costs and Fees. If you compare OptionsHouse to the other best online stock trading firms, the cost to make a trade with TD Ameritrade and E*TRADE will be about double . Simply put, if you’re looking for the best discount broker, Optionshouse is your choice. The only other broker that’s cheaper is Interactive Brokers, but they require a $10,000 minimum deposit and their software is built for advanced traders. Customizable Web-Based Trading Platform. The OptionsHouse web-based platform is completely customizable, meaning you can remove or add different components, minimize sections, and adjust the entire home screen to your preferences. One cool feature is that you can click on any of the components on your home screen and detach it so it shows up in a separate window.

For example, if you have two monitors, or just want their charts opened separately, you can have your trade execution tools in one spot and your charts in another location. Advanced Options Trading Tools. OptionsHouse is one of the three best options brokers (the others are optionsXpress and tradeMONSTER). Not only is OptionsHouse the cheapest for trading options, but they also provide you with an account view that enables you to look at an options calendar, options chains, and all kinds of option spreads. There are several proprietary tools that help you gain insight into your risk or exposure in addition to the quality options trading tools. For options traders and, more specifically, high-frequency traders, OptionsHouse is a solid choice because you can fire off trades with the quick-order entry ticket. If you simply type in a quote, you can instantly add a stock or option leg to a trade. Navigation is simple and everything is laid out to ensure you can move around your account efficiently while making options trades with ease. 2 Reasons to Avoid OptionsHouse. Lacking Access to Several Investment Products. If you’re someone who’s interested in trading a variety of markets or growing your trading knowledge, you probably shouldn’t open an account with OptionsHouse. As the name implies, this online brokerage is best for options traders and people who want to make cheap trades. You won’t be able to trade futures, forex, or international markets.

This isn’t a big deal if you’re just looking to trade options or trade stocks for low prices. Not a Full-Service Broker. Unlike TD Ameritrade, E*TRADE, Scottrade, and other major brokers, OptionsHouse is built mostly for trading and not much else. You won’t have access to banking or comprehensive financial services, so expect to have your money split between multiple accounts versus keeping it all in one place. For years, Scottrade has been known as the best online brokerage for customer service. Scottrade 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 Scottrade: They were recently acquired by TD Ameritrade. The deal is expected to close by fall of 2017 and a full conversion to TD Amertrade’s systems by 2018. 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.

Reasons to Sign Up. Reasons to Avoid. Scottrade Costs and Fees. Mutual Funds Fee (Load): $0 to buy, $17 to sell. Minimum Deposit: $2,500 (recently updated), $0 for retirement account. 4 Reasons to Sign Up for Scottrade. Industry-Leading Customer Service. Year after year, Scottrade is on Fortune magazine’s list of 100 best companies to work for. In fact, Scottrade has been on that list for six straight years. So what does that have to do with customer service? When a company treats their employees the right way, those employees treat customers the right way. In a J. D. Power and Associates self-directed investor study, Scottrade also ranked number one for interaction, account information, trading charges and fees, and overall satisfaction. (This study only included larger, full-service brokers that offer other services beyond trading.

) Scottrade has over 500 local branches where you can walk in and talk to someone face-to-face. There’s a live chat feature on their website and you can even reach out to them via social media, where they are very active. Access to Long-Term Investment Vehicles. The only markets you can’t trade with Scottrade are forex and futures markets. So beyond the basics, Scottrade is another full-service broker that offers banking services, retirement planning, savings plans, and more. It’s not strictly about making trades but, if it was, Scottrade’s prices are affordable in comparison to other full-service brokers. Intuitive Web-Based Platform. The web-based platform has a fully customizable home page that enables you to drag, drop, and rearrange the various components of the page to your preferences. At the the bottom of every page, there’s an intuitive “Quick Trade Bar” that enables you to conduct research and make trades quickly. The bar even detaches from its location so you can place a quick trade even if you’re not on your account home page. This comes in handy if you’re on a third-party website and you read about some news that’s impacting the market — you can quickly get in or out of a position. Affordable for a Full-Service Broker. Compared to TD Ameritrade, Scottrade’s trading commissions and fees are nearly $3 cheaper per trade.

That can certainly add up depending on the volume you plan on trading. For investors who want the amenities of a full-service broker, but don’t want to be paying top dollar to execute trades each week, your money can go further with Scottrade. The Reason to Avoid Scottrade. Not Overly Innovative. Scottrade has the foundation in place to rise above the other top online stock brokers, but they fall short when it comes to innovation. There are a few instances where major improvements can be made. The mobile app looks like it was created five years ago. It’s difficult to navigate, very slow, and hard to trust for mobile trading. The app does include an area where you can research news, statistics, opinions from analysts, and more. The components are there for a solid mobile app, but it just hasn’t come together yet.

If you compare Scottrade to the other brokers, they’re also behind the times in terms of technology. It’s rare for Scottrade to develop any kind of technology before the other best online brokerages. They lead the industry with support and service, and then they follow in terms of technology. Low-Frequency Traders Long-Term Investors Research-Based Traders Multiple Market Traders. 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). Reasons to Sign Up. Reasons to Avoid. E*TRADE Costs and Fees. Mutual Funds Fee (Load): Varies by fund. 5 Reasons to Sign Up for E*TRADE. The Best Mobile Trading App. E*TRADE’s mobile app is a level above the others on the market.

It’s honestly hard to tell the difference between the app and the standard trading platform you would access on a computer. That’s saying a lot because the web-based platform is also one of the best. You get access to CNBC videos, real-time quotes, live market news, and more. You can also conveniently deposit checks directly into your trading account. Online Trader Community. One of the standout features E*TRADE offers is a trader community that enables you to chat with other traders. This is beneficial because you can gauge how others are reacting to the market, see the opinions of other traders, and see how actively traded certain stocks are. It’s a cool element that adds a little something extra, and you won’t find it offered elsewhere. Another quick tip: It’s a good idea to follow market sentiment and do the opposite of what other traders are doing, not follow the crowd. If everyone is doing the same thing, the likelihood of a big group of people caught in the same trading position is high.

That means when the market turns, everyone is trying to get out of their position and you’re the one taking the other side of the trade so you can capitalize on everyone else’s mistake. Access to Every Investment Product. It’s rare for any of the best online stock trading brokers to provide access to every investment opportunity, but E*TRADE has no limitations. In addition to the standard of stocks and options, you’ll have access to bonds, mutual funds, ETFs, forex, futures, pink sheet stocks, and international markets. E*TRADE is a smart choice for people who want to diversify their investment portfolio and for those who have some market experience. Outstanding Financial Tools. With an E*TRADE account, you’ll have access to a debit card and unlimited free ATM refunds at any bank or ATM across the country. E*TRADE used to offer a credit card, but it was discontinued in late 2013. (If you’re looking for a great credit card, check out my post on the best rewards credit cards.) E*TRADE offers a variety of savings plans for all walks of life, including college savings plans, IRAs, retirement planning, and small-business tools. Superb Web-Based Platform.

E*TRADE has something called E*TRADE 360, which enables you to view everything in your account on one page and take action by making trades. It’s one of the few web-based platforms where you have everything you need on one screen. If you don’t like the default layout, you can drag and drop the various components to arrange the home screen to your liking. Page elements can be added and deleted as you wish. The ease and simplicity of making a trade from the same screen where you’re conducting your research can’t be understated. With some brokers, placing a trade takes two to three clicks just to get to the right area. 2 Reasons to Avoid E*TRADE. I think it’s especially important for new traders to be able to practice trading real markets without investing any money. One major downfall of E*TRADE is that they don’t offer virtual trading on their web platform or on their mobile app. So, you can’t test out E*TRADE’s tools prior to opening an account, and you also can’t test your own strategies with fake money even if you have an account. Like TD Ameritrade, E*TRADE will cost you a bit more than the other top online brokerages. Also like TD Ameritrade, you get what you pay for. If you don’t trade frequently, the $6.95 fee per stock or options trade might be worth it for all the resources you have access to. Not that all of us have $10,000 lying around, but if you deposit that much into your new E*TRADE account, they’ll let you trade for free for 60 days.

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. I came up with 10 important categories of features to measure each company. Some of these features included costs and fees, access to investment products, research, education, trading technology, and financial resources. I compared each of the 15 online brokers across these features. Once this comparison was complete, I was left with four of the best online brokers that excelled in specific areas. These four online brokerage firms cover the spectrum for anyone who would sign up for an investment account. I knew I could recommend one of them to a specific group of investors or traders. Here are the final steps I took: I tested out each of the top four brokers (I actually tested several in the top 15) and simulated the trading experience. I analyzed the unmeasurable aspects of each broker that the data could not account for, like usability and functionality, and downloaded all the mobile apps. I looked for additional features unique to each online broker that I also did not capture in the data. Investment Calculator.

To help you determine what to expect from your investment, we’ve created this investment calculator. Simply enter your investment details and our calculator will let you know if your goals are achievable and if it’s not, how far you are from it. A Valuable Lesson at 14. When I was 13, I had about $1,000 worth of stock in a company called Superconductor Technologies, Inc. The company still exists today and trades under the ticker SCON. This was the time of the first technology boom from 1999-2000. By the time I was 14, my $1,000 worth of SCON (I purchased 50 shares at $20share) was sitting at $480share and worth $24,000. The stock eventually went up to nearly double that and then crashed with the rest of the tech market. Being 14 years old and thinking this stock was going to go up forever, I rode the wave up and all the way back down — down to nothing. Check out the chart of SCON below and feel my pain. You can see that the stock took two major spikes up and crashes back down (I was involved in the first one). Today, the company trades for under $3share. I tell this story because I learned three great lessons about stock trading: Stay disciplined Have a plan Entries AND exits matter. Some people liken online stock trading to gambling (this can be true if you have no clue what you’re doing), but it’s really all about risk and reward.

Staying disciplined can keep you from losing money and ensure you lock in your gains. By discipline, I mean picking your prices — where you get in and get out ahead of time — and sticking to them. Always risk less on the downside than you’re willing to make on the upside. The good news about many of the best online brokerage accounts is that you can start by trading virtually before you risk your money. You can practice strategies and track your gains and losses without having to invest a dime using the same software the broker offers for real money. By applying what you learn and maintaining discipline, you have the potential to earn a decent side income if you’re willing to invest the time. Becoming a Day Trader. I’ve been told several times that “trading is the hardest way to make an easy living.” That’s the truth. The best traders in the world are extremely disciplined and always on top of the latest research and trends in the market. I worked with several of these people and witnessed it firsthand on a daily basis. I spent just under three years trading S&P futures, oil markets, foreign currencies, and other markets as an employee of a day-trading firm.

The same principles I learned from making that big $24,000 mistake in my teens carried over to that job. The amount of money I would make on my biggest winning days was significantly more in comparison to the amount I would lose on my worst losing days. I’m telling you all of this because I don’t want you to sign up for one of the online brokers I’m recommending and lose a bunch of your money. If you’re interested in trading, I want you to find a way to build a substantial income on the side and grow your money slowly. I eventually quit trading because it wasn’t my calling. Once I figured out what I wanted to do with my career, enduring the daily stress of watching money come and go just wasn’t worth the massive upside. However, I can say with confidence that trading was the greatest education I’ve ever received. Now, I’m able to leverage my trading experience and knowledge of online trading to thoroughly review each of the best online brokers to help you set up the right account. The experience was well worth it. Recap: Best Online Brokerages. My recommendation to most of you is to open an account with a full-service broker. There are different scenarios in which you should choose each of these brokers I reviewed. You should sign up with Scottrade if you put a high value on getting help, but you don’t want to pay $9.99 per trade.

If you’re a new trader looking to advance up the ranks and absorb knowledge but still want to make trades on one of the best trading platforms around, try TD Ameritrade. If you’re simply looking to make cheap stock and options trades, open an account with Optionshouse. For those of you who want access to every investment product and a great mobile trading platform, go with E*TRADE. I also wrote about the best IRA accounts where I explain the differences between traditional and Roth IRAs so you can see what your best options are. Edited by: Sarah Ban, Michael Gardon, Christine Neilson. Research by: Mike Jelinek, Michael Gardon. Leave a Reply Cancel reply. Just sign up to The Simple Dollar Daily and start saving today. US Options trading from the UK. US Options trading from the UK. This is a discussion on US Options trading from the UK within the Futures & Options forums, part of the Markets category Hi all. I live in the UK and want to start trading Options. I have looked at some brokers. * . My main concern is having to convert my GBP into USD: I have been burnt before when using a GBP currency to buy US shares because of the conversion before and after purchase. Have any of you had this experience and how do you mitigate it? My main concern is having to convert my GBP into USD: I have been burnt before when using a GBP currency to buy US shares because of the conversion before and after purchase. Have any of you had this experience and how do you mitigate it? I use OPTIONSXPRESS.

Remember when trading US options -- you can theoretically be "Called" or "Put" any time during the life of the option although this is rare -- and a contract is for 100 shares not 1000 as in the UK. advert removed by admin. I first opened an account with Charles Schwab, a fairly long winded process, only to find, when the account was open that despite them having many dedicated options traders, they don't trade any options on the CME - ie most of the options that I trade: oil, gold, soft commodities etc. So I had to open an account with the CS subsidiary, OptionsXpress. BUT although owned by CS, they have an entirely different account opening procedure and are not allowed to accept automatic transfer for CS customers. The good news is that CS plans to integrate OX into one trading platform and CS also plan to trade UK based options - hopefully both next year. The Best Online Stock Trading Sites. Latest Update March 15, 2017. The 5 Best Online Stock Trading Sites. Best for Cheap Trading: Ally Invest. Ally Invest leads the industry in low-cost commissions structure for all kinds of investors, from high-net-worth individuals to beginning buy-and-hold traders. Even though a rash of brokers dropped their commissions in 2017 to be competitive with Ally Invest’s $4.95 flat rate, it keeps its edge with a zero account minimum and enticing discount for active investors –– equity trades drop to $3.95 for users with 30+ trades each quarter or a balance of $100,000. While cheaper trades can still be found (Robinhood’s mobile platform boasts totally commission-free stocks and ETFs, for example), Ally Invest’s platform and resources stand out with quality research and tools, including access to its online trader network.

Best for Beginners: E*Trade. If you’re looking for something with an easy learning curve, but endless of room to grow, we recommend E*Trade. Its learning center is filled with educational videos, articles, and webinars to guide your through the basics. From there, you can stay up to date on investing news, reports, and commentary from their team of market analysts. Branch appointments are free to book, and online chat tools and 24-hour hotline are there to guide you from anywhere in the world. If you’re looking to expand your investing over time, E*Trade is equipped to handle everything from entry-level IRAs to aggressive trading of stocks and options. Best Platform: TD Ameritrade. TD Ameritrade offers two best-in-class platforms, designed for two types of investors. Trade Architect is good for beginners, or anyone who prefers a simplified, educational interface that can walk them through the ordering process and explain potential strategies. Thinkorswim, on the other hand, is a powerhouse designed for advanced investors.

This platform regularly racks up praise and awards and offers superior tools and features — including research reports, real-time data, charts, and technical studies. Both platforms are free to use for any investor with a TD Ameritrade account, which for many investors makes the $6.95 commission worth it. Best for Active Traders: OptionsHouse. OptionsHouse is a top platform for investors with an options focus — but it’s the hands-down winner for active traders. Like Ally Invest, it’s been a longtime leader in rock-bottom pricing, with a flat $4.95 trade commission ($4.95 plus $0.50 per options contract) and, unlike many brokerages catering to active investors, no account minimums or inactivity fees. It’s also a standout with a streamlined interface and smart tools. It doesn’t offer currency trading, and has limited commission-free and transaction-free offerings, but its 2016 acquisition by E*Trade should help fill in those gaps as the two brokers continue merge. Best Research & Tools: Fidelity. Fidelity wins for its quantity and quality of trading and investing research — ideal for the DIY investor looking to unleash their potential. Featuring research from more than 20 providers, plus stellar execution, it’s no surprise Fidelity was awarded best overall online stock broker in 2016 by both Barron’s and Kiplinger . And Fidelity shows no signs of slowing down.

In early 2017, Fidelity lowered its commissions from $7.95 to $4.95, a sign that it’s looking to become a bigger player in the discount scene, as opposed to the high net-worth individuals it historically has catered to. It still reserves some of its tools and features for high-volume, active traders, but looking forward, Fidelity is going to get harder and harder to beat. How We Found the Best Online Stock Trading Sites. It’s a tumultuous time for online stock brokers. The players have largely remained the same, but between significant cuts in commissions and a few major acquisitions (E*Trade acquired OptionsHouse TD Ameritrade and Scottrade merged Ally Invest now lives under Ally Bank), the competition is fierce. This is all to say there is no one best online stock broker, but each one has different strengths and weaknesses. Our mission is to spotlight those, and help you find the best one for your investing style. We leveraged the expertise of two stock traders — a former day trader and a financial commentator who has been trading for over 20 years — to dig into 13 of the most popular online stock trading sites. Different investors are going to prioritize different things — a day trader, for example, requires speed and flexibility whereas a beginning trader may value educational resources and customer support. But one thing every trader should care about is cost, so we spent a lot of time balancing price with what each site offered. A few of the fees we analyzed include: Cost per transaction: Commissions are typically an investor’s biggest cost base.

In 2016, a typical unassisted transaction fee averaged about $8, but early 2017 saw a slew of brokers decrease their commission, including Fidelity, E*Trade, and TD Ameritrade. Now, many trade for as low as $4.95, which is where, historically, only a few brokers, like Ally Invest and OptionsHouse, operated. No matter what the price, though, transparency is key. We wanted to see affordable pricing structures that were locked in for the long haul. We also took note of new customer promotions, where brokers give you a chunk of free trades, usually based on how much you deposit. Promotions change regularly, but they can be a good indicator of the type of investor a broker is a good fit for. (Ally Invest, for example, offers incentives for deposits as low as $500, whereas Fidelity Investments has a higher barrier for entry — a $50,000 deposit to get 300 free trades.) Another thing we compared: how many commission-free ETFs a broker offered. Account minimums: Seeing your nest egg shrink due to a tough market or bad method isn’t fun. It’s worse if you’re also getting dinged by your broker’s minimum account balance requirement. Charges for data, research, and tools: All the best online stock trading sites have quality market data like real-time quotes, educational resources, and stock-screening tools built right into their platforms. But some, like Fidelity and TD Ameritrade, stand out for also providing top-shelf resources, totally free of charge. Extra costs: There are lots of brokers that boast having financial experts on-call 24 hours a day to help you make a trade, but don’t tell you those services come with additional fees. (Executing a trade over the phone, for example, can increase an $8 commission fee to $25 or more.

) Some platforms do offer free education on sophisticated strategies like options and futures, but require an upgraded platform with an annual fee. There are plenty of additional fees that may crop up along the way (we discuss some of the more common ones here), but for pretty much every investor, cheaper will always be better. Depending on your method — trading on margin, for example — increased fees might just be the cost of doing business, but we looked to mitigate these costs in our top picks. Alongside cost, we also valued educational resources, reports and tools, and the usability of the platform itself. Our expert users took each broker for a test-drive and weighed in on standout features. We also took ratings from investment publications like Barron’s and Kiplinger into account. Our Picks for the Best Online Stock Trading Sites. Best for Cheap Trading. You’re not going to find lower fees than Ally Invest, especially as an active investor. In a nutshell: It’s the most affordable broker there is, with a rock-bottom commission structure and easy entry point, plus a quality platform that gives you access to the entire universe of stocks and ETFs. Where some discount brokers focus on only one kind of trader — options, for example, or high-net-worth investors — Ally Invest provides an excellent experience for investors of all kinds. It’s the blend of great trading tools with low prices that makes Ally Invest a standout. A focus on discount costs can be a red flag for quality (what is it skimping on?), but Ally Invest truly delivers with sophisticated calculators, profit-loss estimators, and more.

Ally Invest also offers a robust research library that incorporates visual slides and interactive media into its market data. Let’s dig into that discount pricing. At $4.95 a trade, Ally Invest’s fee structure is the lowest out there, matched (but never beat) by other players. Those low fees alone make it one of the best discount brokers, but they also have no inactivity charge and only a $50 full outgoing transfer fee. If you’re an active investor, 30+ trades per quarter or $100,000+ balance, you get a discount that takes equity trades down to $3.95. That significant discount makes Ally Invest the cheapest platform for active investors. We’re not the only ones who think Ally Invest is a remarkable service. Barron’s has rated Ally Invest’s past self, TradeKing, at least 4 out of 5 stars for the past 10 years, and it regularly racked up kudos for its offerings with StockBrokers. com. But in 2017, there was a rash of price slashing from pretty much every top-tier discount broker, and the competition is getting stiffer. Case in point: Fidelity dropped its pricing from $6.95 to match the $4.95 flat rate of Ally Invest, but its perks aren’t quite as accessible for newcomers, and its barrier for entry is higher: You need to fund your account with at least $2,500, and it requires a $50,000 deposit to score the 300 commission-free trades it offers as a sign-up bonus. Vanguard, as another example, charges as much as $20 a transaction if you want to trade stocks or funds by another provider. May 19th 2017 – Previously acquired by Ally Bank, TradeKing has been rebranded into Ally Bank’s own online trading platform, Ally Invest. Much of their interface, low prices, and offerings have remained the same, but some promotions and discounts are no longer offered.

This review has been updated to reflect these changes. *Fidelity requires a $2,500 deposit to open an account. Ally Invest One of the most affordable platforms there is, with rock-bottom pricing and excellent tools. Even better — it's a discount broker that doesn't skimp on research or customer service. Best for Beginners. Promotion: 60 days of commission-free trades with $10,000 deposit. New investors need two things from their online stock trading platform: an easy learning curve and lots of room to grow. E*Trade has both. Their platform boasts a library of educational videos, articles, and webinars for each type of investor. Once you’ve mastered the fundamentals, read up on market news, reports, and commentary from E*Trade analysts. The only real drawback to E*Trade: Commission fees start at $6.95. It’s not until investors make more than 30 trades a quarter that the fees drop down to $4.95 that OptionsHouse and Ally Invest off up-front. While E*Trade can’t match OptionsHouse or Ally Invest’s low flat fees, it racks up points for its transparent pricing model. Take OptionsHouse, which E*Trade actually acquired in 2016. OptionsHouse is known for its super-low fees, but buried in the fine print, OptionsHouse says it actually charges $0.0005 per share on penny stocks.

Let’s compare the two, imagining you execute 500 transactions in the quarter for about 50,000 shares each. That adds up to about a $500 transaction for a stock trading at 1 cent — pretty modest overall. With E*Trade, there are no surcharges for low-priced stocks and no inactivity or other surprise add-on fees. For new investors, we also liked TD Ameritrade's platform, Trade Architect, which walks you through the ordering process as you use the interface. But when it comes to commission fees, TD Ameritrade falls short. Its fees stay at $6.95 per trade, for stocks, ETFs, and options. E*Trade does require an investment minimum for new brokerage accounts ($500), but for most investors, you’ll need at least that much to see real growth. E*Trade Commission Structure. OptionsHouse Commission Structure. Even though the flat rates are the same after 30 trades, the per-share fee can really rack up if you’re trading a high volume of low-priced shares. Beyond the math, though, E*Trade and Charles Schwab are very similar. In 2016, Barron’s rated them within one point of each other, and you can trust both these veteran brokers to have the resources, research, tools, and platforms to accommodate penny stock trading and far beyond.

$6.95, plus $0.75 per contract. *Fees drop from $6.95 to $4.95 at 30 trades per quarter. E*TRADE No surcharges for low-priced stocks, reasonable volume restriction, and a low minimum account balance make E*Trade a solid penny stock trader — especially for over 30 trades per quarter. Promotion: 60 days of commission-free trades with $10,000 deposit. TD Ameritrade Review. Best Trading Platform. Promotion: 60 days of commission-free trades with $3,000 deposit. TD Ameritrade has been a powerful player in the online stock trading ecosystem for years, and even though its pricing structure is more expensive than some of the other discount brokers, there are many traders who think its best-in-class trading platforms, Trade Architect and thinkorswim, are worth it. Trade Architect is often in the shadow of thinkorswim, but the web-based platform is streamlined and easy to use, and particularly appealing to beginning investors. It has a tab-based navigation that lets users flip between trading tools and their account overview, plus charts, stock screeners, heat maps, and more. Its Trade Finder feature is an excellent tool for novices, allowing investors to make some selections (think direction, timing, allocation), and then walking them through the ordering process while spotlighting different strategies that map to their selected guidelines. All-up, Trade Architect achieves a good balance of key information without being overwhelming. Thinkorswim, on the other hand, is designed for advanced investors. It’s a desktop application that gives TD Ameritrade customers free access to tools and features that pretty much any other broker would charge a premium for, including research reports, real-time data, charts, and technical studies.

Customizable workspaces, extensive third-party research, and a thriving trader chat room where investors can share strategies and tips are also included. Where Trade Architect keeps information overload in check, thinkorswim is a firehose. Thinkorswim is a standout especially in options trading, with quick-to-get options-trading tabs (just click “spread” if you want a spread, and “single order” if you want one leg) plus just-in-time links that explain the strategies on the order page. Its method Roller feature lets investors create custom covered calls and then roll those positions from expiration to expiration. There’s also a fully functional mobile app. The flipside to such robust platforms is cost. Even though TD Ameritrade lowered its fees in 2017 from $9.99 to $6.95, pretty much every other major discount broker slashed its prices too — Fidelity, for example, dipped from $7.95 to $4.95. That means TD Ameritrade remains one of the more expensive options out there, even with over 100 commission-free ETFs. That said, it continues to be one of the largest trading platforms in the world, with nearly $740 billion in assets, and has ranked as the best platform for novices by Barron’s five years running. Since it acquired Scottrade, our favorite platform for beginners, in 2016, we can predict it will continue getting better and better over the coming years. TD Ameritrade TD Ameritrade hosts Trade Architect and thinkorswim, two of the best-known platforms in the industry, and available to anyone with an account. Promotion: 60 days of commission-free trades with $3,000 deposit. Best for Active Traders. Promotion: $1,000 commission-free trades with $5,000 deposit. If you already have a firm handle on your investment method and want to maximize your profits, OptionsHouse is excellent.

What it lacks in some of the investor education features that competitors like E*Trade and TD Ameritrade can claim, it makes up for with its low-cost, streamlined trading platform. OptionsHouse’s biggest draw is its pricing structure: $4.95 plus $0.50 per contract, with absolutely no minimum to join or to maintain an account. A single-leg options contract is $5.45 all-in. Even better, the low prices apply to futures and stock trades as well, giving you a cost-effective way to manage your entire portfolio. (Who wants the hassle and cost of multiple brokers for multiple things?) Along with competitive pricing, OptionsHouse has one of the most accessible platforms around: clean design, loads of information, and truly user-friendly tools. Trigger Alerts lets users set up their accounts to automatically purchase an order based on a particular scenario. For example, you can set an alert to buy any number of shares of one stock if its direct competitor falls by a certain percentage. When that’s triggered, you get an alert on any device that lets you confirm the purchase or ignore in one simple reply. Tools like tradeLAB help dissect options spread, with green smiley faces for the statistical probability of making a profit, and red frowns for a loss. OptionsHouse also offers a “dime buyback program” that makes it easy to close any short options without paying commission fees. Barron’s named OptionsHouse “Best for Options Traders” and gave it a 4.5 out of 5 stars overall, and a perfect 5 for its mobile performance. Whether you prefer to trade via desktop, tablet, or mobile, its customizable interface seamlessly transitions between all three — though, admittedly, customers seem to love or hate the app.

Beginners to the more advanced world of options may feel more comfortable with the resources and education that E*Trade and TD Ameritrade excel at, including on-demand videos that show each click of a trade, webinars on method, and in-person tutorials at physical branches. (Since E*Trade acquired OptionsHouse in late 2016, we can anticipate a merger of tools, services, and support that will help OptionsHouse grow here, although it hasn’t happened yet.) OptionsHouse does fall short in mutual funds — it charges $20 per trade, as opposed to Ally Invest’s $9.95 — currency trading, and commission-free ETFs, but for the active trader who know what they’re doing, it’s one of the best platforms available. *Fees drop from $6.95 to $4.95 at 30 trades per quarter. OptionsHouse An options-first broker that leads the competition in both price and platform. It stands out for having no minimum to join or to maintain an account. Promotion: $1,000 commission-free trades with $5,000 deposit. Best Research & Tools. Promotion: 300 commission-free trades with $50,000 deposit. If there’s a way to slice and dice the market, Fidelity has thought about it. Its platform wins for user-friendly design, plus there are tons of educational resources for deeper research. If you’re a do-it-yourselfer who enjoys geeking out over data and analysis, Fidelity’s tools will help take the guesswork out of finding funds and nosing out strategies. We admired Fidelity’s platform that lets you explore your options with a slick and intuitive design, complete with color-coded rankings and charts that call out what’s important. You can sort stocks by size, performance, and even criteria like sales growth or profit growth.

Want to sort ETFs by the sectors they focus on, or their expenses? Done. There’s even a box to check if you want to only explore Fidelity’s commission-free offerings. A few other discount brokers do offer screeners, but none match the depth and user-friendliness of Fidelity’s. When it comes to research, Fidelity is pretty much in a league of its own. The intellectually curious can dive into research from more than 20 providers, including Recognia, Ned Davis, and McLean Capital Management. Fidelity’s Learning Center featured videos are organized by topic – including not just the concept, but also how to apply those concepts to your own investments using the Fidelity platform. It’s a powerful way to learn investing techniques and immediately put them to practice. Fidelity’s accolades keep stacking up. Kiplinger ’s 2016 Online Broker Survey ranked Fidelity best overall against seven other major brokers. Investor’s Business Daily ranked Fidelity among its top five brokers based on site performance, research tools, and customer service. Barron’s 2016 Online Broker Survey compared 16 platforms, and awarded Fidelity with the top overall score of 34.9 out of a possible 40.0, stating, “Fidelity Investments made it to the top this year due to the variety of trading and investing tools, and the quality of its trade execution.” Better yet, Fidelity dropped its commission fees from $7.95 to $4.95 in February 2017, making it competitive with other historically low-cost platforms like Ally Invest and OptionsHouse.

That said, some of Fidelity’s advanced tools are only available to high-volume traders (for example, charting with Recognia requires a significant 120 trades per year to use, and its Active Trader Pro requires 36 trades per year). TD Ameritrade stands out in contrast by offering its premium tools to anyone with an account. With that said, even Fidelity’s basic tools are high-quality enough to make it a top pick. Fidelity Industry-leading research from over 20 providers make this the go-to broker for do-it-yourselfers who want to dig deep into the data. Promotion: 300 commission-free trades with $50,000 deposit. Investments come in multiple shapes and sizes for different levels of expertise. *Offers commission-free or transaction-free trading. Stocks: a portion of a company ownership. The more valuable the company, the more valuable its stock. Unfortunately, the reverse is true as well.

Level: beginner Bonds: a loan you make to a company or government in exchange for interest and the return of principle at some future date. If your city wants a new stadium, for example, it might issue a bond to pay for it. These investments are rated for safety by third-party companies, with AAA being the least risky. Level: beginner ETFs: short for exchange traded fund. These are investment funds that trade like a stock on a stock exchange, but their performance tracks an underlying basket of stocks. They provide diversification within one investment product, so they present lower risk than futures. Level: beginner Options: a contract between a buyer and a seller to buy or sell something at a specified price at a specified time, basically as a way to bet on the future price of an investment. Level: advanced Futures: short for futures contract. This is an agreement to buy or sell assets, such as commodities or shares, at a fixed price to be delivered and paid for at a later date. If you think you can speculate on next year’s price of gold, this fund is for you. Level: advanced Forex: short for foreign exchange. This market is for trading currencies and speculating on what today’s yen, for example, will cost tomorrow.

Level: advanced. Cheaper is always better for investors. Warren Buffett is the best example to hit this point home. In 2008, he bet some hedge fund managers $1 million that they wouldn’t be able to make more money in a decade than a cheap, boring index fund. An index fund has a fixed portfolio of stocks that never change — and therefore don’t accrue a lot of fees – while more complex hedge fund strategies may pivot and rack up big costs along the way. Buffett is so far ahead that he’ll almost certainly come out the winner when the contest ends in 2018. He’s beating his high-priced peers not because he’s scoring bigger gains, but because he reduced costs. Let’s say you put $1,000 in a stock and the investment goes up to $1,200. Broker fees can have a big impact on your net returns — that is, your total investment profits after fees. In order to beat that “two and twenty” fee structure, your investment has to perform really well to offset the additional costs — something that is a lot harder to control in the long term than costs. A Few Other Fees and Costs to be Aware Of. Broker fees are typically where most costs add up, but your investing method can also be a big source of expenses and fees. The capital gains tax rate favors long-term investments. An investor who buys and sells their stocks within a few months will face a higher capital gains tax rate (25 percent) on their profits than an investor who buys and holds their stocks for a full year (15 percent).

If you’re looking at a $10,000 profit, waiting those extra months could make a full $1,000 difference. Granted, there’s a risk to holding an investment, but if you’re close to that one-year cutoff, it might be worth it to sit tight for a few more weeks. Mutual funds and ETFs come with their own set of fees too. Like broker fees, pay attention to the expense ratio (usually a percentage) of any mutual funds or ETFs you purchase in your account, even if you’re buying them commission-free. These extra fees are another big cost to investors, but they aren’t deducted from your account balance. Instead, these fees show up in the price on the ticker tape. That’s why many high-priced mutual funds’ and ETFs’ value per share doesn’t seem to change over time — any growth is offset by fees. Also watch out for mutual funds that charge a front - or back-end load for each purchase or sale. These usually range from 0.5% to 1% and can add up quickly. Play with your own fake money.

Give yourself a few thousand in fake money and play investor for a bit while you get the hang of it. “Just start. Even with just a virtual portfolio. Start and then commit to building over time,” says Barratt. “Don’t expect anything major to happen in a short time — build your money muscles by taking risks in a virtual portfolio.” TD Ameritrade offers paperMoney, its virtual trading platform. If you open an account, OptionsHouse offers its paperTRADE account to test your strategies. Outside of actual trading sites, MarketWatch and Investopedia offer simulators to get you started. Buy what you know. Our experts suggest you begin by looking at your own life. “Buy what you know, where you are. If you can, identify good companies locally,” says Randy Cameron, a portfolio manager and investment advisor with 35 years of experience.

“Look for companies you and your friends are talking about, ones with plans to go national.” As for how much time and money you need, “Start with what you have,” he says. There is literally no minimum to get started. You can buy one share of a company if you like. Don’t check your account too often. The best investors are in it for the long haul. Checking your account too often might make you react to the fluctuations in the market too quickly. Personal finance expert Ramit Sethi has written that you should check your investments, “probably every few months, with a major review every year.” On many sites, you can also set an alert if a stock dives. Other than that, just set a quarterly recurring appointment so you know you’ll handle it at the right time. More Online Stock Trading Site Reviews. We’ve been looking into online stock trading sites for a few years now, and you can check out some of our other reviews. They aren’t consistent with our latest round of research (yet!) so be on the lookout for updates in the coming weeks: We find the best of everything.

How? We start with the world. We narrow down our list with expert insight and cut anything that doesn't meet our standards. We hand-test the finalists. Then, we name our top picks.