Who Is a Stock Broker?
A stockbroker is a person or institution with a license to trade stocks and securities in the stock market. Stockbrokers were popular in the past since they were the only people authorized to trade stocks on behalf of investors. However, things have changed and everyone can trade stock in a matter of minutes. Stocks can be traded anywhere since a lot of stock trading goes on online. Trading of stocks is now cheaper and faster compared to the past.
Even though trading of stocks is easier now, you will still need to invest in the right broker to enjoy the profit. You will also need to know about brokerage in order to make the right decisions.
Things to Consider When Choosing A Broker
When you want to choose a brokerage, you should look at the trade commissions of the ones you are considering. You should check the amount that is charged for buying shares of stock. Some brokerages charge based on the type or size of the order. To make it easy for you, look for a brokerage that charges a flat rate for irrespective of the size or type of order.
- Trading Tools
You should also check the tools that the broker is offering. A good stock broker should provide all the necessary tools that you will need to trade. Great tools make the trade easier and successful. Stockbrokers should make available tools such as mobile trading apps, quality stock scanners, and last sale tickers.
- Customers Service
The customer service provided by the broker is also important. Your broker should be available to guide you in processes you are finding difficulty with.
- Investment Options
A good stock broker should provide several other investment options aside from the stock trading. Other investment options that are expected from stockbrokers include direct marketing routing, futures trading, conditional orders, forex trading, and commission-free ETFs.
- Account Minimums
All brokers have requirements with regards to account minimums. Some brokers allow you to open an account without a deposit while others require that you open your account with a huge sum of money. Some brokers request for a high minimum deposit because of the services they offer. If you want to access those premium services, you should consider paying the huge deposit. However, it is prudent to compare the services so that you can get value for money. However, if you cannot afford the high minimum deposit, there are brokers who require less minimum deposit.
Well established online brokers also offer banking services. Most of these brokers offer checking services, credit cards, debit cards, mortgages, and money market accounts. If you want to have an account that provides complete services, you should look for brokers that offer banking services.
- Account Security
Online accounts are vulnerable to scams and fraud. Most online brokers invest in the security of customer accounts. A good online broker will have a secured website and some are even willing to offer two-factor authentication. You should confirm that the website has https instead of http before entering your information into their system.
- Other Fees
Aside from trade commissions, brokers also charge other fees. Some of these fees include inactivity fees. You should check if the broker charges extra fees, and the amount they charge before making a decision.
There are many online stock brokers on the stock market. However, not all of them are recommended. We have made of list of the best brokers. This selection features brokers that offer all the services you will require from a good stockbroker.
- Merrill Edge
This broker is the brokerage company of the Bank of America. Merrill Edge is one broker that is known for its great customer service. They also charge low fees for their services. Bank of America customers get to enjoy free trade. This broker allows Bank of America customers to integrate their broker account into their Bank of America accounts. Merrill Edge charges $6.95 per trade, and they have no account minimum. They also run promotions periodically. Unfortunately, this broker does not offer commission-free ETFs, and they also require a minimum balance for an active trading platform.
E-trade is very popular because of its easy to use tools. This broker is favorable for people who frequently trade due to the tiered commission structure. E-trade offers quality customer support to people who have difficulty in making transactions. They also have an advanced app that makes trading easier. Users will have access to extensive research. The fee per trade is $6.95, however, the account minimum is $500. Investors who qualify for a promotion will be able to trade without paying commissions for 60 days. Unfortunately, people who rarely trade will pay high commissions.
- Ally Invest
Ally Invest is highly recommended for beginners due to its robust trading platform. This broker offers free research, data and analytical tools to its traders. They have no account minimum and the fee per trade is $4.95. There is the promotion where they pay $50 in cash to traders who make qualifying deposits. Unfortunately, Ally Invest does not offer commission-free ETFs. Ally Invest is an excellent option for traders who trade often. They offer discounts to traders who transact at least 30 trades in a quarter and this reduces the commission charged per trade. Traders get access to their up to task online platform either via smartphones or personal computers. You can trade fast, create your dashboard, get different set of trading tools, and get 24-hour quotes using the online platform. There is also the profit and loss calculator which helps you to make trade decisions.
- TD Ameritrade
This broker is worth mentioning because of its large pool of trading tools. The broker offers a lot of trading tools on both of its mobile and desktop-based platforms. Their desktop platform, Thinkorswim as well as the mobile platform, Trade Architect are available to all traders. TD Ameritrade charges $6.95 per trade and they offer 24/7 support to its customers. There is no account minimum when you deal with this broker. They also offer free and extensive research and about 300 commission-free ETFs. There are several tradable securities including mutual funds, forex, futures, options, bonds, and stocks. The downside of trading with TD Ameritrade is that you are expected to hold your commission-free ETFs for at least 30 days. If you decide not to hold it for that long, you will pay $19.99.
Fidelity is well known for its execution quality and this drives down the cost of trade. The regular stocks are traded at $4.95 each and options trades cost $4.95 plus $0.65 per contract. There is no account minimum for regular trading, but mutual funds require $2500. Fidelity also beats all brokers when it comes to third-party research. This broker offers 12 third-party research report to its customers. Traders get 300 commission-free trade when you trade $50,000 or more. There are no annual or inactivity fees, however, there is a $50 account closing fee. Tradable securities include Stocks, Bonds, Mutual Funds, Forex, ETFs, and Options. Customers also enjoy 24/7 customer support through live chat and email. You can also visit any of the 180 local branches to be assisted. However, branch broker assistance costs $32.95. Unfortunately, there are no introductory promotions for trades less than $50,000.
TradeStation has also won its spot on this list due to its unrivaled advanced desktop trading platforms. This broker offers great services at low fees and their wide range of trading tools gives them an edge over several other brokers online. TradeStation allows all types of trades including futures and forex. The broker charges a flat rate of $5 per trade and $5 plus $0.5 for option trade. TradeStation’s new desktop platform called the New TradeStation makes trading simple. Their customer service is always readily available to assist traders.
- Charles Schwab
This broker has something for everyone. Beginners will get the guidance they need to trade efficiently while active traders are also offered the tools they need for successful trades. The broker offers two robust trading platforms and quality customer service to their customers. The mobile app offers top-notch features to increase convenience. There are no charges for mutual fund trading. The charge per trade is $4.95 and the account minimum is $1000. Option trades is $4.95 plus $0.65 per contract. Charles Schwab also offers commission-free ETFs. If you are an investor who is interested in premium research, Charles Schwab is a great option. There are no annual and inactivity fees. Traders also enjoy 4,000 no-transaction-fee mutual funds. Tradable securities include the bond, options, stocks, futures, mutual funds, and ETFs.